[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]




 
                 WASTE, FRAUD, ABUSE, AND MISMANAGEMENT

=======================================================================

                                HEARINGS

                               before the

                    TASK FORCE ON NATURAL RESOURCES
                          AND THE ENVIRONMENT

                                 of the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

 HEARINGS HELD IN WASHINGTON, DC: MAY 24, JULY 12 & 19, AND SEPTEMBER 
                                13, 2000

                               __________

                            Serial No. 10-4


           Printed for the use of the Committee on the Budget

                     U.S. GOVERNMENT PRINTING OFFICE
64-703cc                     WASHINGTON : 2000




                        COMMITTEE ON THE BUDGET

                     JOHN R. KASICH, Ohio, Chairman
SAXBY CHAMBLISS, Georgia,            JOHN M. SPRATT, Jr., South 
  Speaker's Designee                     Carolina,
CHRISTOPHER SHAYS, Connecticut         Ranking Minority Member
WALLY HERGER, California             JIM McDERMOTT, Washington,
BOB FRANKS, New Jersey                 Leadership Designee
NICK SMITH, Michigan                 LYNN N. RIVERS, Michigan
JIM NUSSLE, Iowa                     BENNIE G. THOMPSON, Mississippi
PETER HOEKSTRA, Michigan             DAVID MINGE, Minnesota
GEORGE P. RADANOVICH, California     KEN BENTSEN, Texas
CHARLES F. BASS, New Hampshire       JIM DAVIS, Florida
GIL GUTKNECHT, Minnesota             ROBERT A. WEYGAND, Rhode Island
VAN HILLEARY, Tennessee              EVA M. CLAYTON, North Carolina
JOHN E. SUNUNU, New Hampshire        DAVID E. PRICE, North Carolina
JOSEPH PITTS, Pennsylvania           EDWARD J. MARKEY, Massachusetts
JOE KNOLLENBERG, Michigan            GERALD D. KLECZKA, Wisconsin
MAC THORNBERRY, Texas                BOB CLEMENT, Tennessee
JIM RYUN, Kansas                     JAMES P. MORAN, Virginia
MAC COLLINS, Georgia                 DARLENE HOOLEY, Oregon
ZACH WAMP, Tennessee                 KEN LUCAS, Kentucky
MARK GREEN, Wisconsin                RUSH D. HOLT, New Jersey
ERNIE FLETCHER, Kentucky             JOSEPH M. HOEFFEL III, 
GARY MILLER, California                  Pennsylvania
PAUL RYAN, Wisconsin                 TAMMY BALDWIN, Wisconsin
PAT TOOMEY, Pennsylvania
                                 ------                                

          Task Force on Natural Resources and the Environment

               GEORGE P. RADANOVICH, California, Chairman
PAT TOOMEY, Pennsylvania, Vice       DAVID E. PRICE, North Carolina,
    Chairman                           Ranking Minority Member
WALLY HERGER, California             JOSEPH M. HOEFFEL III, 
GIL GUTKNECHT, Minnesota                 Pennsylvania
                                     EDWARD J. MARKEY, Massachusetts
                                 ------                                

                           Professional Staff

                    Wayne T. Struble, Staff Director
       Thomas S. Kahn, Minority Staff Director and Chief Counsel





                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held in Washington, DC, May 24, 2000: Management Failures 
  at the National Parks..........................................     1
    Statement of:
        Barry T. Hill, Associate Director, Energy, Resources, and 
          Science Issues, the General Accounting Office..........     5
        Kevin R. Garden, Partner, Saltman and Stevens Attorneys 
          at Law (on behalf of Fred Vreeman, President and CEO, 
          Kings Canyon Park Service Co.).........................    10
        Maureen Finnerty, Associate Director for Operations and 
          Education, the National Park Service...................    15
    Prepared statement of:
        Mr. Hill.................................................     7
        Mr. Garden...............................................    13
        Ms. Finnerty.............................................    17
        Earl E. Devaney, Inspector General, U.S. Department of 
          the Interior...........................................    20
                              ----------                              

Hearing held in Washington, DC, July 12, 2000: Department of 
  Energy Management Practices--Uncertainties at Savannah, 
  Paducah, and the National Ignition Facility....................    39
    Statement of:
        Dr. Carolyn L. Huntoon, Assistant Secretary for 
          Environmental Management, Department of Energy.........    41
        Brig. Gen. Thomas F. Gioconda, U.S. Air Force, Acting 
          Deputy Administrator for Defense Programs, National 
          Nuclear Security Administration, Department of Energy..    59
        Gary L. Jones, Associate Director for Energy, Resources, 
          and Science Issues, General Accounting Office..........    71
    Prepared statement of:
        Dr. Huntoon..............................................    44
        William D. Magwood, IV, Director of the Office of Nuclear 
          Energy, Science and Technology, U.S. Department of 
          Energy.................................................    65
        Ms. Jones................................................    74
                              ----------                              

Hearing held in Washington, DC, July 19, 2000: Fire Safety 
  Failures of the Park Service--Caretaker of the Nation's 
  Treasures Ineffective in Addressing Hazards....................    87
    Statement of:
        Jim Wells, Director of Energy, Resources, and Science 
          Issues, Resources, Community, and Economic Development 
          Division, U.S. General Accounting Office...............    89
        Maureen Finnerty, Associate Director for Park Operations 
          and Education, National Park Service, U.S. Department 
          of the Interior........................................    95
    Prepared statement of:
        Hon. George Radanovich, a Representative in Congress From 
          the State of California................................    88
        Mr. Wells................................................    91
        Ms. Finnerty.............................................    97
                              ----------                              

Hearing held in Washington, DC, September 13, 2000: Controlling 
  Wildfires in the Future--What Strategies and Resources Are 
  Needed?........................................................   119
    Statement of:
        Barry T. Hill, Associate Director, Energy, Resources, and 
          Science Issues, the General Accounting Office..........   125
        Randle Phillips, Deputy Chief for Programs and 
          Legislation, United States Forest Service..............   132
        Robert H. Nelson, Senior Fellow in Environmental Studies, 
          the Competitive Enterprise Institute, Professor of 
          Environmental Policy, School of Public Affairs, 
          University of Maryland.................................   138
    Prepared statement of:
        Mr. Radanovich...........................................   120
        Mr. Hill.................................................   127
        Mr. Phillips.............................................   134
        Mr. Nelson...............................................   141
    September 20, 2000, memorandum from the Congressional 
      Research Service to Congressman Herger pertaining to Forest 
      Fires and Forest Management................................   122


               Management Failures at the National Parks

                              ----------                              


                        WEDNESDAY, MAY 24, 2000

                  House of Representatives,
                           Committee on the Budget,
           Task Force on Natural Resources and Environment,
                                                    Washington, DC.
    The Task Force met, pursuant to call, at 2 p.m. in room 
210, Cannon House Office Building, Hon. George Radanovich 
(chairman of the Task Force) presiding.
    Chairman Radanovich. Good afternoon and welcome to the 
Budget Committee Task Force on Natural Resources and the 
Environment.
    I would like to thank everybody for being here today at the 
first hearing of this oversight Task Force on Natural 
Resources. Joining me are Pat Toomey, Wally Herger, and Gil 
Gutknecht; and David Price, Ed Markey, and Joseph Hoeffel.
    I look forward to exploring this Task Force's purview and 
would like to welcome the people testifying today. If you would 
like to go ahead and take your positions, we will do that 
before the opening statement.
    I want to welcome Barry T. Hill, Associate Director, 
Energy, Resources and Science Issues for the General Accounting 
Office; Kevin R. Garden, Partner, Saltman and Stevens Attorneys 
at Law, on behalf of Fred Vreeman who is the President and CEO 
of Kings Canyon Park Service Company; and Maureen Finnerty, 
Associate Director for Operations and Education for the 
National Park Service.
    Welcome, and I am looking forward to your testimony.
    In the next 2 days, tourists from all over the country will 
be making a run on our national parks, particularly the larger 
parks that offer lodging. These properties are known as 
destination properties and have been established in some of the 
Nation's most breathtaking regions. The visitors headed to 
these parks for the Memorial Day weekend will be the first 
among millions of travelers expected this summer. They will be 
among the first this summer to find what the GAO office has 
found: substandard lodging that fails to provide some of the 
most basic comforts. In Sequoia and Kings Canyon National Park, 
set in the towering Sierra Nevada Mountains and covered by 
groves of giant Sequoias which have stood for thousands of 
years, this beauty stands in stark contrast to many of the 
facilities provided in the park. The guests who will use these 
public bathrooms will be greeted with eyesores such as mildew, 
ants, stained shower pans, leaky faucets, spit wads, chipped 
paint and graffiti, to name a few. Many rooms at Sequoia and 
Kings Canyon do not meet some of the most basic standards, 
lacking telephones, locks on doors, windows, electric outlets, 
et cetera.
    What the GAO found in Sequoia and Kings Canyon is 
representative of a concessions program within the Department 
of Interior that lacks uniformity, consistency and 
accountability.
    The General Accounting Office looked at several other parks 
in addition to Sequoia and Kings Canyon and released a report 
of their evaluation of the National Park concessions program. 
The GAO questions the Department of Interior's hiring practices 
of the concession staff. It also criticizes the staggering 
backlog of expired contracts, the lack of incentives given to 
concessionaires to offer quality service, and it highlights the 
lack of accountability and direct supervision within the 
concessions program. This report is the focus of our hearing 
today.
    Issues addressed in the GAO report are of particular 
interest to me. I represent an area of three national parks and 
three national forests, which brings Federal land ownership in 
my district up to roughly 65 percent. Consequently, I serve on 
the Resources Subcommittee on National Parks and Public Lands. 
Our subcommittee has jurisdiction over many of the same issues 
that this Task Force will be evaluating, including today's 
issue of concessions within the national parks. The Parks 
Subcommittee held a hearing several weeks ago which broadly 
addressed this issue. I am pleased that we are spending time 
today to look into these matters more intently, and I 
appreciate the cooperation of the Resources Committee in our 
endeavor.
    Nearly two-thirds of my district is federally owned. It is 
difficult enough when such a large segment of my district's tax 
base has been taken out of commission; these difficulties are 
compounded by the struggle to ensure honest stewardship of 
these lands, something that we are not getting from the 
National Park Service. I am sure that my district shares this 
struggle with other regions of the United States.
    I have been a close observer of the Park Service and 
concession issues for many years. Like the GAO, I question 
whether the Park Service is doing what it should to see that 
optimal services are provided to the visitors of our national 
parks. That is why we are holding this hearing, which is one in 
a series to ensure that the Federal Government is operating in 
the best interests of the people.
    The Budget Committee is responsible for providing a 
blueprint for how our Nation spends $1.7 trillion annually. The 
Chairman has therefore created several Task Forces to evaluate 
how Federal money is spent and to ensure that this money is 
spent wisely. Our goal is to make sure that the government 
agencies will eventually operate effectively in the 
administration of the public trust which includes public lands.
    Though concessions operations are businesses, they exist to 
provide needed services to people visiting public lands. The 
quality of the national park visitors' experience hinges 
greatly on the quality of the parks' food, lodging, shopping 
and other facilities provided by the concessionaires, making 
them part of the public trust.
    In an effort to improve concessions, Congress has provided 
several new funding sources for the parks in recent years. We 
have also given more latitude to park superintendents with the 
hope that it would result in needed improvements to 
concessions.
    But what has been done to satisfy the basic needs of 
visitors in our national parks? The evidence that we have seen 
from the GAO, the Inspector General, and the Park Service shows 
that improvements are not happening, and that they have not 
been happening despite repeated notices over the past 10 years.
    I would like to draw your attention to the chart to my 
right. I want to make the statement that the GAO has also 
shared some compelling information about concessions contracts. 
According to the report, there was no training required for 
those who wrote the $765 million in contracts in 1998. 
Furthermore, there was no continuing education requirement for 
those who write the contracts and no experience required for 
writing $1 million contracts. This does not make for good 
administration of the public trust.
    To shed some light on the problems with the concessions 
program, we will be hearing today from Mr. Barry Hill, 
Associate Director of Natural Resources for GAO; Kevin Garden, 
who will be testifying on behalf of Fred Vreeman, President and 
CEO of the Kings Canyon Park Service Company; and Maureen 
Finnerty, Associate Director for Operations and Education for 
the National Park Service.
    We will start with Mr. Hill who will testify on the recent 
GAO report outlining the many deficiencies within the 
concessions program. These deficiencies have been illustrated 
consistently over the last 10 years in reports by the GAO, the 
Inspector General and the Park Service itself.
    Next, Mr. Garden will speak to Mr. Vreeman's experience 
with the National Park Service since entering into a 
concessions contract with them 4 years ago. In that time, Mr. 
Vreeman has witnessed firsthand the inconsistencies within the 
Park Service concessions program. Mr. Garden will tell you that 
had the Park Service adhered to the contract and acted in a 
timely manner, the lodging facilities at Sequoia and Kings 
Canyon National Parks would currently be quite suitable. 
Finally, we will hear from Ms. Finnerty who will share her 
thoughts on the GAO report.
    The Park Service has responded to this report by outlining 
some of the changes to the concessions program they are 
pursuing. These changes include reforms under the 1998 
Concessions Act, the implementation of performance-based 
contracting, and staff changes designed to address problems 
with management. These reforms all sound viable, although we 
have yet to see them enacted. It is safe to conclude from what 
we know of the GAO report, the Park Service's response to the 
report, and the experience of concessionaires, that there are 
major shortcomings in the concessions program. We can further 
conclude that these shortcomings are the result of a lack of 
diligent oversight and a standard of accountability.
    I am looking forward to hearing from each of the witnesses 
on ways they think we can address these problems. The GAO 
report on National Parks' concessions illustrates that the 
program is disjointed and plagued with inconsistency. Whether a 
visitor's experience at a destination park will be an enjoyable 
one or a poor one, particularly as it relates to lodging, is 
the luck of the draw. This is because of the lack of commitment 
and oversight within the concessions program. The concessions 
operation is weighed down by poorly-trained officials and 
suffers from a lack of accountability, and the visitors to 
these parks suffer as a result.
    Destination parks are the crown jewels of our national park 
system. The government has taken the responsibility for this 
land in the interest of ensuring that it will be enjoyed by 
all. It is incumbent upon the government to make sure that 
guest services in the parks are run efficiently, effectively, 
and that is clearly not happening. I hope that this hearing 
will steer us in the direction of improving the concessions 
operation and thereby the visitor's experience at our national 
parks.
    Before we hear from the witnesses, I would certainly like 
to yield to Mr. David Price from North Carolina to make an 
opening statement.
    Mr. Price. Thank you, Mr. Chairman. I don't have a formal 
opening statement, but I would like to add my word of welcome 
to our three witnesses, and I anticipate their testimony with 
great interest. We, of course, want to make certain that our 
National Park Service is operating in a way that is welcoming 
to guests and that reflects good stewardship of Federal 
dollars. There are some elements in this GAO report that I look 
forward to hearing addressed by those who know the report well 
and also those who are attempting to respond to it within the 
Agency.
    We have set up these Task Forces on the Budget Committee 
under the assumption that there is going to be some waste and 
fraud to be identified in various operations of government, and 
I am sure that is true; but I expect also--and today may be one 
of those days--that we will come across some of the problems 
associated with underfunding or inadequate support for various 
services that our agencies render and we need to know about 
that as well. Are the staffing levels adequate? Is the mix 
adequate? Are the contract terms that the Park Service is able 
to offer to concessionaires, are those adequate? In what ways 
can we, through funding and other mechanisms, address these 
problems? To what extent are they already being addressed, and 
what can we do to help?
    I hope that we can approach today's hearing in that kind of 
constructive spirit because these are challenges that we ought 
to be able to address, and I think with sufficient goodwill and 
determination that we can do so.
    Welcome, and I look forward to your testimony.
    Chairman Radanovich. Thank you very much, Mr. Price.
    I would ask unanimous consent that all members be given 5 
days to submit written statements for the record. Without 
objection, so ordered.
    I would like to begin by introducing Mr. Hill. Welcome to 
the committee and please--I think the way that we will do this, 
everybody will be given 5 minutes to make their statement and 
then we will open up for questioning with the panel after Ms. 
Finnerty. Thank you.

    STATEMENT OF BARRY T. HILL, ASSOCIATE DIRECTOR, ENERGY, 
  RESOURCES, AND SCIENCE ISSUES, THE GENERAL ACCOUNTING OFFICE

    Mr. Hill. Thank you, Mr. Chairman and members of the Task 
Force. It is certainly a pleasure to discuss the management of 
the Park Service's concessions program; and if I may, I will 
briefly summarize my prepared statement and submit the full 
text of my statement for the record.
    My comments today are based primarily on two reports. The 
first report, which we issued in August 1998, reviewed the 
condition of lodging facilities in 10 national parks. The 
second report, which we issued in March of this year, addresses 
key management problems in the concessions program. Both these 
efforts found that the condition of these lodging facilities 
varied considerably from park to park and was at times quite 
poor, as illustrated by the pictures that appear to the right 
of me. If you look to the picture to my immediate right, it 
shows exposed wiring in public bathroom and shower facilities 
at the Sequoia-Kings Canyon National Park. And the picture to 
the left of that shows poor conditions of drinking water and 
shower facilities at the Death Valley National Park.
    Before I discuss the problems we found and options for 
correcting them, let me provide some background on the Park 
Service's concession program. Concessionaires play a 
significant role in providing services to many of the over 270 
million visitors who annually visit the Park Service system. In 
1998, the latest year for which data are available, 630 
concessionaires provided visitor services in many of the 379 
park units located across the Nation.
    These concessionaires generated $765 million in revenues of 
which $479 million, almost two-thirds, came from the 73 
concessionaires that provide lodging. Our most recent report 
disclosed shortcomings in the agency's overall approach to 
managing its concessions programs, and these shortcomings 
center on the following three areas: First, the inadequate 
qualifications and training of the agency's concession 
specialists and contracting staff; second, the agency's out-of-
date practices in handling its contracting workload as well as 
its chronic backlog of expired contracts; third, a lack of 
accountability within the concessions program.
    For the most part, these problems are long-standing and, as 
you pointed out in your opening statement, Mr. Chairman, are 
consistent with similar concerns raised by the Department of 
Interior, the Office of the Inspector General, and the Park 
Service concession staff.
    Let me discuss each problem starting with the staff 
qualifications and training issue. Concerns about the 
qualifications and training of the Park Service's concession 
staff have been raised in numerous studies as far back as 1990. 
The chart to my right lists several notable reports and other 
documents that discuss these concerns over the past 10 years.
    Primary concerns disclosed by these documents center on the 
agency's concession staff not normally having the business, 
financial, and contracting backgrounds needed to successfully 
carry out the concessions programs.
    Despite these disclosures, in the last 10 years the Park 
Service has made only limited progress in addressing these 
concerns. Specifically, the agency has made little effort to 
professionalize its work force by hiring staff with education 
or experience in business or hospitality management. Instead, 
it has chosen to fill concessions positions by internally 
transferring staff out of other career fields rather than 
seeking to professionalize the work force. The chief 
concessions official in one regional office said the agency has 
taken the view that ``anyone can do concessions.'' Our work 
indicates that this comment typifies the agency's approach to 
managing its concessions program.
    In addition to problems with the qualifications and 
training of its staff, the Park Service's concessions 
contracting practices are out-of-date, and do not reflect the 
best practices of the Federal Government, the private sector, 
or even other contracting programs within the agency.
    For example, contracting staff in other agencies throughout 
the Federal Government are encouraged to write contracts that 
are performance-based, meaning that the contracts contain 
incentives for good performance and disincentives for 
performance that falls below expectations. However, the 
agency's concessions program is not using performance-based 
contracts and had no plans to do so.
    Furthermore, for about 10 years the agency's has had 
difficulty addressing its contracting workload in a timely 
manner, resulting in chronic backlogs of expired concessions 
contracts.
    The third major management issue affecting the concessions 
program is a lack of accountability. Under the agency's 
organization structure, the head of the program, the chief of 
concessions, has no direct authority over those that implement 
the program in individual park units. Thus, the organizational 
structure of the agency limits the impact that the head of the 
program or other central offices can have on its ultimate 
success. This structure relies on regional directors holding 
park superintendents accountable for the results of their 
parks' concessions programs. However, concessions officials in 
the Park Service's headquarters in the two largest regional 
offices indicated that this is not occurring.
    Further contributing to this lack of accountability is the 
fact that there is no process in place for headquarters or 
regional staff to ensure that park concessionaires are meeting 
the agency's minimum acceptable standards or that the standards 
are being consistently applied, such as using independent 
inspections that are common in the private hotel/motel 
industry.
    We believe that the Park Service has two principal options 
available for dealing with the problems identified in the 
management of its concessions programs: First, using better 
hiring and training practices to professionalize the work force 
and thus obtain better business and contracting expertise; and/
or, second, contracting for the needed business and contracting 
expertise.
    Regardless of which option or combination of these options 
it selects, the Park Service will need to strengthen its 
accountability for and control of the concessions program. 
Unless changes are made to better link the concessions program 
at the park level with the agency's leadership of the 
concessions program, the impact of efforts to improve the 
program through the suggested options will be reduced.
    In closing, Mr. Chairman, while the Park Service's 
concession program continues to affect the experience of 
millions of park visitors each year, the management of the 
program continues to be plagued by some of the same problems it 
faced as many as 10 years ago. Until the agency takes action to 
address these management problems, it will continue to struggle 
in managing the performance of concessionaires to ensure that 
these operators consistently provide high-quality facilities 
and services to park visitors. That concludes my statement and 
I would be happy to answer any questions you may have.
    Chairman Radanovich. Thank you, Mr. Hill.
    [The prepared statement of Barry T. Hill follows:]

   Prepared Statement of Barry T. Hill, Associate Director, Energy, 
   Resources, and Science Issues, Resources, Community, and Economy 
      Development Division, the U.S. Government Accounting Office

    Mr. Chairman and members of the committee, we are pleased to be 
here today to discuss the management of the Park Service's concessions 
program. Our comments are based primarily on two reports. The first 
report, which we issued in August 1998, reviewed the condition of 
lodging facilities in 10 national parks. The condition of these 
facilities varied considerably from park to park and was at times quite 
poor.\1\ The second report, which we issued in March 2000, addresses 
key management problems in the concessions program and options 
available to address them.\2\
---------------------------------------------------------------------------
    \1\ National Park Service: The Condition of Lodging Facilities 
Varies Among Selected Parks (GAO/RCED-98-238, Aug. 6, 1998).
    \2\ Park Service: Need to Address Management Problems That Plague 
the Concessions Program (GAO/RCED-00-70, Mar 31, 2000).
---------------------------------------------------------------------------
    In summary, our most recent work shows the following:
    We found shortcomings in the agency's overall approach to managing 
the concessions program that center on three areas:
    1. The inadequate qualifications and training of the agency's 
concessions specialists and concessions contracting staff;
    2. The agency's out-of-date practices in handling its contracting 
workload as well as its chronic backlog of expired contracts; and
    3. A lack of accountability within the concessions program. For the 
most part, these problems are longstanding and are consistent with 
similar concerns raised by the Department of the Interior, its Office 
of the Inspector General, and Park Service concessions staff.
    The Park Service has two principal options available for dealing 
with the problems identified in the management of the concessions 
program: First, using better hiring and training practices to 
professionalize the workforce and thus obtain better business and 
contracting expertise or second, contracting for the needed business 
and contracting expertise. These two options are not mutually exclusive 
in that the agency could contract for expertise in certain functions 
while developing the expertise in-house for other functions. No matter 
which option--or combination of options--it selects, the agency needs 
to strengthen its accountability for and control of the program. Unless 
this is done, the effectiveness of other changes to the program will 
likely be diminished.

                               Background

    Concessioners play a significant role in providing services to many 
of the over 270 millions visitors who annually visit the national park 
system. Concessioners, which are private businesses operating under 
contracts with the Park Service, provide facilities and visitor 
services such as lodging, food, merchandising, marinas, and various 
guided services. In 1998, the latest year for which data are available, 
630 concessioners provided visitor services in many of the 379 park 
units located across the nation. These concessioners generated about 
$765 million in revenues, of which about $479 million (almost two-
thirds) came from the 73 concessioners that provide lodging.
    For many years, concerns have been raised by the Congress, the Park 
Service, and GAO about the need to reform existing concessions law and 
better manage the agency's concessions program. In November 1998, the 
Congress enacted a new concessions law as part of the National Parks 
Omnibus Management Act of 1998. One of the Congress's intentions was 
that the new concessions law would increase competition in the award of 
new concessions contracts. In addition, the law established an advisory 
board whose mission was to advise the Secretary of the Interior on 
improvements the agency could make in managing park concessioners. The 
problems that we addressed in our report, and are discussing today, are 
management problems which will persist even under the new law unless 
the agency takes actions to make improvements.

   Longstanding Management Problems Affect the Condition of Lodging 
                               Facilities

    Concerns about the qualifications and training of the Park 
Service's concessions staff have been raised several times since 1990 
by the Department of the Interior's Office of the Inspector General and 
the agency's own staff. (App. I lists several notable reports and other 
documents that discuss these concerns.) The primary concern raised was 
that the agency's concessions staff do not normally have the business, 
financial, and contracting backgrounds needed to successfully carry out 
the concessions program. The Park Service has made only limited 
progress in addressing these concerns. The agency has made few efforts 
to professionalize its workforce by hiring staff with education or 
experience in business management or hospitality management. Instead, 
it has filled concessions positions by internally transferring staff 
out of other career fields. Once transferred, the agency's concession 
staff receive only limited training. A more qualified and better-
trained workforce would have a better understanding of industry trends, 
best practices, and the tools needed to effectively manage 
concessioners. Rather than seeking to professionalize the workforce, 
the chief concessions official in one regional office said, the agency 
has taken the view that ``anyone can do concessions.'' Our work 
indicates that this comment typifies the agency's approach to managing 
its concessions program.
    In addition to these problems with the qualifications and training 
of its concessions staff, the Park Service's concessions contracting 
practices are out-of-date and do not reflect the best practices of the 
Federal Government, the private sector, or even other contracting 
programs within the agency. For example, contracting staff in other 
agencies throughout the Federal Government are encouraged to write 
contracts that are performance based--meaning that the contracts 
contain incentives for good performance and disincentives for 
performance that falls below expectations. However, the agency's 
concessions program is not using performance-based contracts, and, 
according to several senior Park Service concessions program officials, 
has no plans to do so. Furthermore, for about 10 years, the agency has 
had difficulty addressing its contracting workload in a timely manner, 
resulting in chronic backlogs of expired concessions contracts. Many 
concessions contracts expired 5 to 10 years ago, and concessioners have 
since been operating on 1- to 3-year contract extensions. These expired 
or extended contracts contribute to the varying condition of lodging 
facilities because concessioners operating under short-term contract 
extensions, or nearing the end of their contracts, are less likely to 
invest in their facilities to make needed capital improvements.
    The third major management issue affecting the concessions program 
is a lack of accountability. While the Park Service, like other Federal 
agencies, is trying to improve accountability and program performance 
in response to the Government Performance and Results Act (GPRA) and 
other related initiatives, the concessions program is an area where 
these efforts need to be improved. Under the agency's organizational 
structure, the head of the program--the Chief of Concessions--has no 
direct authority over those that implement the program in individual 
park units. Thus, the organizational structure of the agency limits the 
impact that the head of the program or other central offices can have 
on its ultimate success. This structure relies on regional directors 
holding park superintendents accountable for the results of their 
parks' concessions programs. However, concessions officials in the Park 
Service's headquarters and two largest regional offices indicated that 
this is not occurring. Specifically, they acknowledged that 
superintendents are not being evaluated on the results of their 
concessions programs. Further contributing to this lack of 
accountability is the fact that there is no process in place for 
headquarters or regional staff to ensure that park concessioners are 
meeting the agency's minimum acceptable standards or that these 
standards are being consistently applied. In the private hotel/motel 
industry and the Department of Defense--which manages similar 
activities--independent inspection teams are used to determine the 
condition of facilities and services being provided to the public. The 
Park Service does not have such teams. As a result, Park Service 
management has no systematic way of determining what, if any, problems 
are occurring throughout the agency; whether corrective actions are 
necessary; or whether new initiatives are warranted.

 Options Are Available to Address Problems in Managing the Concessions 
                                Program

    Two options are available to the agency to deal with the problems 
identified in its management of the concessions program: First, 
professionalize the workforce to obtain better business and contracting 
expertise or second, contract for the needed business and contracting 
expertise.
    The first option focuses on improving the skills and abilities of 
the Park Service's concessions staff by changing the agency's hiring 
practices and upgrading its training. Rather than filling concessions 
positions with staff transferred from other career fields within the 
agency, the Park Service could hire staff with backgrounds or education 
in hospitality and/or business management. By doing so, the agency 
would gradually develop greater in-house expertise in managing 
concessioners in a more businesslike manner. In addition, the agency 
could upgrade the training of its concessions contracting staff so that 
they were as well qualified as other agency contracting staff outside 
the concessions program. As it is now, the Park Service staff 
responsible for administering procurement and acquisition contracts 
receive far more training than their counterparts in the concessions 
program.
    The benefit of pursuing this option would be that the agency could 
develop a more qualified, better-trained, and professionalized 
workforce. However, the agency's past record in taking action to 
address these issues is not encouraging. Many of the concerns we have 
raised in this report about the qualifications of concession staff have 
been raised repeatedly over the past 10 years by the Department of the 
Interior's Inspector General and by several different departmental or 
agency task forces. Several times over this period, the Park Service 
has generally agreed that it needs to professionalize its concessions 
workforce. However, as our work indicates, the agency has not made 
significant progress in this area.
    Alternatively, the Park Service could contract for the expertise it 
needs to operate its concessions program. Contractors could be hired to 
handle a number of financial and business-related tasks, such as 
planning, writing contract prospectuses, performing financial analysis, 
assisting with contracting, and evaluating the performance of 
concessioners.
    Contracting for business-related staff would have several benefits. 
For example, through contracting, the agency could obtain a highly 
qualified workforce in a short period of time. In addition, the agency 
would gain some workforce flexibility because it could adjust the 
number of staff needed to fit the size of its upcoming workload. 
Contracting would allow the agency to bring more staff on to handle its 
backlog of expired and expiring concessions contracts and to reduce the 
number of contractor staff when the workload is diminished.
    Furthermore, contracting for certain functions has the potential to 
improve the program's performance as well as reduce its costs. For 
example, traditionally, one responsibility of park concessions staff 
was to conduct inspections of the concessioners' facilities and 
operations. These inspections can be subjective, and the application of 
standards can vary from park to park. If the agency centralized and 
contracted for this function, it could perhaps perform inspections with 
fewer people and yet achieve greater consistency across the agency.
    While contracting has the potential to reduce some costs in the 
concessions program, it could also increase some costs, particularly in 
areas where the agency would contract for larger numbers of highly 
skilled staff than it currently maintains. However, some of these 
increased costs could be mitigated by centralizing certain functions, 
such as inspections. In addition, the increased costs could be 
mitigated by reducing the number of agency staff in the concession 
program.
    The two options available to the Park Service for dealing with its 
concessions management problems are not mutually exclusive, in that the 
agency could contract for expertise in certain functions while 
developing expertise in-house for other functions. These options are 
principally focused on improving the agency's management of its largest 
concessioners--most of which are lodging concessioners. In our view, 
once the agency has made changes in the concessions program to address 
its largest concessioners, the benefits of additional expertise--
whether acquired through hiring, training, or contracting--are likely 
to cascade down to improve the management of its smaller concessioners.
    Finally, regardless which option or combination of options it 
selects, the Park Service will need to strengthen its accountability 
for and control of the concessions program. Unless changes are made to 
better link the concessions programs at the park level with the 
agency's leadership of the concessions program, the impact of efforts 
to improve the program through the suggested options will be reduced.
    In closing, while the Park Service's concessions program continues 
to affect the experiences of millions of park visitors each year, the 
management of the program continues to be plagued by some of the same 
problems it faced as many as 10 years ago. For the most part, these 
management problems are well documented and well known. In fact, the 
agency generally agreed with the findings and recommendations in our 
report. However, until the agency takes action to address these 
management problems, it will continue to struggle in managing the 
performance of concessioners to ensure that these operators 
consistently provide high-quality facilities and services to park 
visitors. To address these problems, our March 2000 report recommended 
that the agency first, either improve the qualifications of its own 
concessions staff, contract for these services, or engage in some 
combination of the two; and second, improve the accountability of park 
managers by establishing a formal process for performing periodic 
independent inspections of concessioners' lodging operations throughout 
the park system and reporting the findings to the head of the agency 
for corrective action.
    This concludes my statement. I would be happy to answer questions 
from you or other members of the committee.

 APPENDIX I.--NOTABLE REPORTS AND MEMORANDUMS THAT RAISE CONCERNS ABOUT
  THE QUALIFICATIONS AND/OR TRAINING OF PARK SERVICE CONCESSIONS STAFF
------------------------------------------------------------------------
                                            Concerns raised by report/
  Source and date of report/memorandum              memorandum
------------------------------------------------------------------------
Report of the Task Force on National     Concessions staff do not
 Park Service Concessions, U.S.           normally have the business,
 Department of the Interior, Apr. 9,      financial, and contracting
 1990.                                    backgrounds needed to
                                          successfully carry out the
                                          concessions program.
Follow-up Review of Concessions          Agency staff working in
 Management, National Park Service,       concessions do not have
 Report No. 90-62, Office of the          sufficient educational
 Inspector General, U.S. Department of    backgrounds to perform their
 the Interior, April 1990.                work well. The report
                                          recommends improving the
                                          qualifications of staff
                                          working in the concessions
                                          field.
Report of the Concessions Management     This report recommends that all
 Task Force, U.S. Department of the       agencies within the Department
 Interior, Nov. 4, 1991.                  recruit staff for their
                                          concessions programs with a
                                          basic knowledge of business,
                                          including such subjects as
                                          contract law and
                                          administration, hotel/
                                          restaurant management, and
                                          financial management.
Memorandum from the Director of the      The agency needs more
 Park Service on Personnel Staffing for   concessions staff with
 National Park Service Concessions,       education or experience in
 Jan. 12, 1994.                           business, accounting, business
                                          law or the hospitality
                                          industry. To recruit qualified
                                          staff, the Director suggests
                                          that the agency look for
                                          candidates outside the
                                          government.
Park Service concessions work group,     The agency needs to develop a
 June 1994--findings reported in          recruitment program, enhance
 Concession Careers Future Task Force     training and development, and
 Report, National Park Service, Oct.      improve career development.
 97..
Concessions Management Curriculum Task   The concessions management
 Force Report, National Park Service,     program has failed to give its
 Sept. 1995.                              employees the training they
                                          need to manage the complex
                                          concessions program. A
                                          systematic, comprehensive
                                          employment development program
                                          is needed.
Concession Careers Future Task Force     This report outlines a series
 Report, National Park Service, Oct.      of human resource management
 1997.                                    processes and recommendations
                                          to strengthen and
                                          professionalize the staff
                                          needed to effectively manage
                                          concessions.
------------------------------------------------------------------------
Source: GAO's compilation of agency documents.

    Chairman Radanovich. We will hold questions until testimony 
is given by all three witnesses.
    Mr. Garden.

  STATEMENT OF KEVIN R. GARDEN, PARTNER, SALTMAN AND STEVENS 
ATTORNEYS AT LAW (ON BEHALF OF FRED VREEMAN, PRESIDENT AND CEO, 
                 KINGS CANYON PARK SERVICE CO.)

    Mr. Garden. Thank you, Mr. Chairman and members of the 
committee. I appreciate and thank you for the opportunity to 
testify before you today. My name is Kevin Garden. I am an 
attorney with Saltman and Stevens here in Washington, D.C. and 
I am before you representing Fred Vreeman who is the president 
of Kings Canyon Park Services. Mr. Vreeman was unable to make 
the necessary travel arrangements to be here.
    In my testimony I am going to discuss some of the specific 
experiences that Kings Canyon has had in the last 4 years in 
operating a concessions contract it has at Kings Canyon. It is 
my hope in discussing his experiences, I will help you better 
identify the problems with the current administration of the 
Park Service's concession program, as well as the solutions to 
those problems.
    To give you some brief background, Kings Canyon Park 
Service owns and operates various lodging facilities in Kings 
Canyon National Park, as well as Sequoia National Forest which 
is run by the U.S. Forest Service. They signed a contract back 
in October 1996 for a term of 15 years. The contract 
specifically called for a construction phase in the first 5 
years of the contract and an investment by the contractor of 
$3.8 million. This period is very critical to the contract 
because the remaining 10 years are then available to recoup the 
investment that the contractor makes. The economic viability of 
the contract in fact is dependent upon this construction period 
being maintained.
    When Kings Canyon Park Service entered into its contract, 
it intended to complete the construction and remains today 
intending to do so, and has the financial wherewithal to do 
that. However, in the 4 years it has been operating its 
concessions contract, it has been continually frustrated by 
National Park Service delays in completing tasks needed to 
complete this construction, a lack of cooperation on the part 
of the National Park Service, which is critical to performing a 
contract of this nature as well as being a fundamental 
contracting responsibility, and inconsistent evaluations and 
directions from various members of the Park Service.
    The reasons for these problems and frustrations is the NPS' 
lack of a staff knowledgeable with what is specifically going 
on under this contract, and a lack of awareness of the 
financial impact of the Park Service's actions on a 
concessionaire that is trying to maintain a viable operating 
business.
    Kings Canyon believes, as Mr. Hill referred to, that the 
key to solving these problems is holding the Park Service 
accountable for its actions. The GAO report focused on holding 
the various parks accountable to the agency overall. Well, 
Kings Canyon would also suggest that the Park Service be held 
accountable to its contractors.
    As to the delays I mentioned, probably the most significant 
one for Mr. Vreeman at Kings Canyon has been the fact that the 
contract, as I mentioned, called for construction. This was the 
demolition and reconstruction of various facilities in the 
park. This included some bathhouses and cabins which are 
mentioned in the GAO report. In order to do this construction, 
Kings Canyon needed the Park Service's approval. The Park 
Service, once this construction was proposed, informed Kings 
Canyon that an environmental assessment was required under 
NEPA. However, the Park Service also informed Mr. Vreeman that 
the Park Service did not have the staff to complete this EA, 
and if they wanted it done in a timely manner they would have 
to do it themselves, so Mr. Vreeman undertook this 
responsibility, which was not originally set forth in the 
contract.
    Kings Canyon submitted the EA in January 1999 and they 
repeatedly tried to get the--excuse me, the Park Service 
repeatedly tried to get Kings Canyon to include in the EA 
various alternatives which were inconsistent with the specific 
requirements in the contract. Mr. Vreeman did not want to do 
that but he did. He was essentially being asked to write an 
alternative contrary to what he had contracted for back in 
1996.
    He did not get a final response on the proposed alternative 
that was consistent with his contract until April of 2000, 18 
months later. When that response came, it was a denial of the 
EA. However, the frustration he felt was that the basis for the 
denial was based on facts that were known to the Park Service 
back in January 1999 when he originally submitted the EA. Had 
the Park Service operated in an efficient and prompt manner, 
they could have told him of their decision sooner, thus making 
sure that he could do a better job of maintaining that 5-year 
construction window.
    I referred earlier to a lack of cooperation, and probably 
the most significant example of this involves an incident with 
the State Preservation Historic Office of California, also 
known as SHPO.
    When the contract was first obtained by Kings Canyon, the 
SHPO office had reviewed the various facilities on the park and 
indicated that they were not eligible for historic status. In 
fact, they did this twice. However, after performance began, 
apparently the Park Service, from Mr. Vreeman's understanding, 
had destroyed some historic structures elsewhere in the park 
without consulting with SHPO, and also wanted to take down some 
additional historic structures. Therefore, they were looking to 
curry favor with the SHPO office.
    As a result, they affirmatively went to the SHPO office and 
identified for them certain facilities that were intended to be 
demolished and reconstructed under the contract and asked that 
those be found eligible for historic status. The critical fact 
was now an environmental assessment was required to do the 
construction. This was not anticipated originally in the 
contract and was brought about solely by the Park Service's 
affirmative actions.
    I believe this shows a fundamental misunderstanding of 
their contractual obligations; i.e., the obligation to 
cooperate. To take this kind of affirmative action which 
frustrates the contractor is inconsistent with that obligation. 
I believe that ties in with the GAO comments on the lack of 
training in contract matters that the Park Service personnel 
have. This is a fundamental contracting responsibility that any 
contracting officer in the Department of Defense would be aware 
of. But from all respects and all evidence we have, the Park 
Service has no understanding of this responsibility.
    I just want to give you some examples of some of the 
inconsistent evaluations that Kings Canyon has endured. For 
example, they recently painted some of the rooms in one of 
their lodges and remodeled the rooms. A Park Service inspector 
stated that the paint job in the rooms was unacceptable and had 
to be redone. Kings Canyon didn't agree with that and contacted 
the superintendent's office and a second inspector came along 
and stated that the paint job was great.
    Another example is that they have an employee housing unit 
in the park built in the 1930's. The wiring, of course, in that 
unit is quite out of date. An inspector came along one day and 
informed Mr. Vreeman he had to rewire the building to make it 
consistent with the current UL Code. This made no sense to him. 
He has a construction background and he contacted the 
superintendent's office and a second inspector came out and 
informed Mr. Vreeman that in fact he was correct; the wiring 
did not have to be redone because the building had been built 
prior to that code coming into effect.
    I have a few more examples, but they run along the same 
strain so I don't want to take any further time. Again, thank 
you for your time and I am happy to take any questions that the 
committee members may have later.
    Chairman Radanovich. Thank you, Mr. Garden.
    [The prepared statement of Kevin R. Garden follows:]

  Prepared Statement of Kevin R. Garden, Partner, Saltman and Stevens 
 Attorneys at Law, on Behalf of Fred Vreeman, President and CEO, Kings 
                        Canyon Park Service Co.

    It is an honor to appear before this task force. I hereby submitt 
this written testimony on behalf of Fred Vreeman, President of Kings 
Canyon Park Services (KCPS). KCPS is currently a concessioner with the 
National Park Service and operates lodging and other facilities in 
Kings Canyon National Park and Sequoia National Forest.
    I am Kevin Garden and am appearing on behalf of Mr. Vreeman. Mr. 
Vreeman is disappointed that he could not make the necessary travel 
arrangements to be here in person.

                               Background

    KCPS is a small family-owned business. In 1996, it was awarded its 
current contract with the NPS and took over the facilities in Kings 
Canyon National Park which were run-down and long overdue for 
replacement. KCPS also agreed to help the NPS complete services to the 
public for 2 years in the Giant Forest in Sequoia National Park. This 
area was scheduled for upcoming demolition when KCPS assumed its 
responsibilities. Because of the run-down nature of the Giant Forest 
facilities and their pending demolition, completion of these services 
resulted in significant financial loss to KCPS. Notwithstanding this 
loss, NPS acquired a Government Improvement Fund of nearly one million 
dollars as a result of KCPS's efforts. The enticement was placed in 
front of this family business that it would be able to recoup its 
losses incurred in operating the Giant Forest facilities under its 
operation of the concessions contract in Kings Canyon National Park.
    However, since competing for and obtaining its current contract to 
provide lodging and other services in Kings Canyon National Park, KCPS 
has not been able to operate profitably. This unprofitable status is 
the direct result of NPS actions which have delayed the construction of 
new and improved facilities which were identified in the contract at 
the time KCPS bid for and obtained it. Moreover, the construction phase 
of the contract has to be completed within the first 5 years (i.e., by 
2001) in order for the contract to be profitable. As of the present 
date some three and one-half years after contract award, significant 
construction has not taken place contrary to KCPS's intentions and many 
of the old, deteriorated facilities, some of which are highlighted in 
GAO's report, still remain despite the efforts of KCPS to demolish them 
and replace them with new, attractive buildings. In addition, KCPS has 
incurred unnecessary expenses due to the NPS's inconsistent 
administration of the Kings Canyon concessions contract. These delays 
and expenses are the direct result of the NPS's improper management of 
KCPS's contract.

                    Unexpected Development Expenses

    When KCPS and the NPS signed the long-term contract for concessions 
services at Kings Canyon National Park, the contract authorized 
construction of 58 additional rooms and the replacement of dilapidated 
and worn out facilities. In the Request for Proposal (RFP), NPS 
represented to KCPS that, based on the information it was aware of at 
the time of award, compliance with the National Environmental Policy 
Act (NEPA) for purposes of this new construction was complete. NPS made 
these assurances because it was aware, as is any contractor, that 
compliance with NEPA's requirements is time-consuming and expensive. 
The construction work called for under the contract was consistent with 
the Park's Development Concept Plan, which was finalized in 1987. 
However, now that the contract has been awarded and notwithstanding its 
prior representations, the NPS is imposing new requirements for NEPA 
compliance which were not assumed by KCPS under the contract and are 
not due to any new environmental information.
    The NPS has suspended construction activities while it reviews 
environmental studies which were completed pursuant to NEPA and 
relevant to the actions which had been clearly set forth under the 
original contract. As to these actions, NPS had represented that all 
NEPA compliance had been accomplished. However, no new significant 
information or changed circumstances related to the environment have 
occurred since the contract was awarded. Rather, the delay is due to 
admitted lack of staffing needed to promptly review the completed 
environmental analysis.
    In addition to this action significantly delaying the critical 
construction phase under the contract, the NPS also informed KCPS that 
it wanted KCPS to prepare the environmental analyses, at its own 
expense. KCPS has been told that this is necessary because the NPS does 
not have the funds or personnel available to accomplish this task. 
Pursuant to NPS's request, KCPS drafted extensive portions of the 
environmental compliance documents. However, the NPS refused to edit or 
review them in a timely manner and continues to insist that KCPS 
include additional new development alternatives that are not 
economically viable or consistent with the terms of the contract.
    The resulting delays have created unexpected loss of revenue that 
was not anticipated when the contract was awarded. Additionally, the 
added expense of preparing the environmental analyses was not 
anticipated or planned for in KCPS's economic assessment at the time it 
bid for the contract. The true cause of these delays is not any 
substantive new environmental issue, but rather an inability by the NPS 
to efficiently complete the necessary environmental reviews.

                 Construction inspection and approvals

    After development plans are approved, but before KCPS or any 
contractor can proceed with construction in the National Parks, it must 
obtain NPS approval. Simply put, the necessary approvals at each stage 
of the construction process are slow, inconsistent and expensive. KCPS 
has found it difficult or impossible to work with the NPS in a manner 
consistent with its needs to operate a viable business. Based on KCPS's 
experience, the main reasons for this difficulty are lack of 
knowledgeable construction inspectors and the inability of the NPS 
bureaucracy to provide consistent direction.
    In an effort to do more than simply criticize, KCPS offers a 
suggestion for a solution on this particular point. NPS could contract 
with an entity or agency (whether it be private, county or state) in 
each park area that has qualified engineers who are licensed to review 
and approve construction projects. NPS would therefore obtain knowledge 
of the specific local codes and ordinances which may be applicable to 
local construction only when specific projects were being reviewed, 
thus not requiring it to incur the expense of a full-time inspector.

                          Facility inspections

    Once a facility is completed, it is subject to inspection to ensure 
that it is being sufficiently maintained and meets the necessary 
criteria. However, KCPS's experience has been that these inspections 
are inconsistent and often conducted by untrained NPS personnel. For 
example, different inspectors reviewing the same facility may rate it 
differently. In other situations, the same NPS inspector may grade a 
facility at one level 1 day and, although the same conditions exist 
upon a later visit, give the facility another grade the very next time.
    However, this type of inconsistency, which can produce havoc for a 
business trying to maintain itself as a viable entity, can be 
eliminated. As those in the private recreation business are aware, 
professional inspection agencies are available (e.g., AAA, Best 
Western, Mobile Travel Service) which would produce consistent reviews. 
Another option is that the NPS can contract for independent contractors 
which it then can use in several parks.

                               GAO Report

    The recent GAO report entitled ``Park Service: Need to Address 
Management Problems That Plague the Concessions Program'' and issued in 
March 2000 found deficiencies in the operations of the facilities at 
Kings Canyon National Park. While GAO visited Kings Canyon National 
Park when many of the facilities were being prepared for the upcoming 
season and had been dormant for many months, GAO's report highlights 
the problems that KCPS and the Park itself are left with when planned 
and needed construction of new facilities is delayed. (The items noted 
by GAO were fixed when GAO subsequently visited the facilities after 
they had been opened for the season. These were run-down facilities 
that KCPS had been trying to replace for 3 years.)
    The facilities identified in GAO's report were constructed in the 
1920's and 30's. When KCPS became the operator of the facilities in 
1996, the facilities were long-overdue for significant renovation or 
removal. Although KCPS agreed to renovate or remove and replace these 
tired facilities and the contract specifically identified this goal, 
the NPS has delayed approvals for the necessary replacement. As 
discussed above, the approval process is extremely lengthy with 
inconsistent requests for information and slow reviews. It is and has 
been KCPS's desire to complete building improvements that are 
identified in its contract, appropriate for the park, approved by the 
NPS, meet all NEPA standards and are financially sound. But for the 
NPS's actions, these efforts would not have been delayed.

                                Summary

    As demonstrated by KCPS's experience, the NPS is not managing the 
concession program efficiently. KCPS is a contractor able and willing 
to produce a first-class recreation experience for visitors to Kings 
Canyon National Park. In fact, it is in KCPS's own interest to do so as 
it will obtain the financial benefits from attractive lodging 
facilities. KCPS did not compete for the concessions contract at Kings 
Canyon National Park under the intention or belief that the facilities 
present when it obtained that contract would still largely be in place 
today. In fact, in 1997 KCPS completed the construction of the John 
Muir Lodge pursuant to its intentions and the contract's 
specifications. (This facility was not inspected by GAO because it was 
not yet completed at the time of GAO's visit.) The timely completion of 
this beautiful and tasteful facility has proven to be the exception 
and, when compared to the facilities identified in GAO's report, in 
large part highlights the contrast between proper and improper contract 
administration.
    KCPS is appreciative of the efforts made by Congress to instruct 
the NPS as to its administration of its concession contracts. However, 
despite this instruction, concessionaires are still faced with 
inconsistent contract administration. The arbitrary changes in contract 
administration effect the economic viability of KCPS's as well as 
others contracts. KCPS prays that the result this task force will 
accomplish is to hold the NPS accountable in the proper administration 
of its contracts. Only upon the imposition of accountability, which 
does not currently exist, will on-the-ground changes be made and 
improvements realized.
    Thank you for the opportunity to present these positions.

    Chairman Radanovich. Ms. Finnerty, welcome. We look forward 
to your testimony.

     STATEMENT OF MAUREEN FINNERTY, ASSOCIATE DIRECTOR FOR 
      OPERATIONS AND EDUCATION, THE NATIONAL PARK SERVICE

    Ms. Finnerty. Thank you, Mr. Chairman. I request that my 
full statement be incorporated into the record and I will 
briefly summarize some of the high points.
    Chairman Radanovich. Without objection.
    Ms. Finnerty. The National Park Service does substantially 
agree with the GAO report. We believe that it will provide a 
basis for strengthening our program, and working along with the 
new Concessions Management Improvement Act of 1998, it will 
allow us to truly implement concessions reform in the National 
Park Service. The GAO report also deals with many issues that 
are also being dealt with and looked at by the legislatively 
established Concessions Advisory Board, particularly issues 
relating to outsourcing and the professionalization of the work 
force.
    GAO makes recommendations in three major areas. Here in 
summation is what the National Park Service is doing to respond 
to those recommendations. On work force professionalization and 
training, 60 percent of our 125 permanent personnel who work in 
concessions have either relevant education or experience in 
business or the hospitality industry. We know we need to do 
better. We are aware that we need to increase the 
professionalization of our work force.
    We are committed to aggressively recruiting from all 
sources, from outside sources, again to improve the 
professionalization of the work force. We have recently hired 
two individuals with MBAs and we have a key position vacant in 
Denver, the head of our concessions program center, and it is 
our full intention to recruit and fill that job from the 
outside, from the business sector, to help increase the 
professionalization and oversight of that program.
    We do have a Concession Careers Future Report which was 
completed a couple of years ago. We are moving forward to 
implement various pieces of that report, particularly as it 
pertains to training and professionalizationof the work force. 
We have already developed competencies for concession employees 
and looked at strategies for improving the competency of our 
concessions work force.
    We also are actively engaged in agreements and arrangements 
with Northern Arizona University to work with us on the 
hospitality end and increasing expertise on the hospitality 
side of concessions management.
    We are working with Cornell to strengthen our financial 
capability, in-house financial capability, and we are working 
with the Army to strengthen and improve many of our contracting 
procedures.
    The second major area that GAO made recommendations on is 
our out-of-date contracting practices. We certainly agree that 
this has been the case over a number of years. We now do have a 
new law and we have new concessions regulations which went into 
effect just about a month ago. We are now working with the 
solicitor's office and others to adopt relevant Federal 
acquisition regulations for our programs, for example, 
performance-based contracting, and certifying those who are 
involved in contracting activities in the concessions program.
    We are moving forward with dealing with the backlog of 
contracts that have expired and that are on short-term 
extensions. We have plans in place to essentially redo over 200 
concessions contracts this year through the end of the calendar 
year, and another 165 are planned for next year. We essentially 
will do this through the use of teams made up of senior 
concessions personnel and also through outsourcing various 
components of the program to help us get the work done.
    On the issue of outsourcing or contracting out, in 1990 
essentially we didn't contract out any portions of the 
concessions program and over the last year we have moved to 
contracting out almost $1 million of work primarily in the 
areas of financial analysis, appraisals and arbitration. The 
advisory board has also been asked to come up with some 
recommendations for the secretary and the director on other 
areas that we can contract out and other ways that we can tap 
into the private sector to help us to professionalize our 
contracting capabilities.
    The GAO report recommended the outsourcing and 
centralization of inspections, particularly of large 
operations. We agree with that. We like that idea and we are 
moving forward to try to implement that over the next year or 
so.
    On the question of accountability, last fall regional 
directors were told to put accountability and oversight of 
concessions in the performance standards for those 132 parks 
which have concessions programs. A critical element will be 
added to the performance standards of all of the SES 
individuals, namely the regional directors who have oversight 
of superintendents. This will take place on July 1.
    We are critically looking at the phasing out over a period 
of time of collateral duty personnel. This has been one of the 
issues which has been raised, folks trying to do 3 or 4 or 5 
different tasks. It is particularly an issue in those parks 
which have big concessions programs and have only part-time 
individuals that may not be adequately trained and may not have 
the experience.
    We have put together a budget request for the 2002 budget 
which is the next cycle that we can influence, specifically 
requesting additional resources again to help beef up our 
professional staff both in parks and regional offices. We have 
contracted with PricewaterhouseCoopers. They have started to 
look at our entire concessions program. They are doing an 
analysis of ways that we can improve it, what are our 
shortcomings and deficiencies, and hopefully we will come up 
with some recommendations that will be helpful to us in the 
years ahead.
    Also the Service as a whole is looking at reinstituting an 
operations evaluation program which we used to have that 
essentially looks at all operational programs in the field and 
is another method and practice that really helps improve 
accountability. We have not done that in a number of years, and 
I think the director is committed to reinstituting that and 
putting that in place so we can improve accountability not only 
in the oversight of this program but also in others where we 
have had some challenges.
    That completes my remarks, Mr. Chairman, and I will be 
happy to answer questions.
    [The prepared statement of Maureen Finnerty follows:]

    Prepared Statement of Maureen Finnerty, Associate Director for 
          Operations and Education, the National Park Service

    Thank you for the opportunity to discuss with you the recently 
issued report by the General Accounting Office (GAO) on the management 
of the National Park Service concessions program. This report, entitled 
``Park Service: Need to Address Management Problems That Have Plagued 
The Concessions Program'' (GAO/RCED-00-70), highlights issues and 
factors that impact the National Park Service (NPS) concession program.
    As Don Barry, Assistant Secretary for Fish and Wildlife and Parks, 
indicated in a letter to GAO dated March 16, 2000, overall, we agree 
with many of the report's findings. This report offers us an 
opportunity to strengthen our program and begin true concessions 
reform, while supplementing our ongoing efforts to implement the 
Concessions Management Improvement Act of 1998. One such effort 
includes a proposal in the President's 2001 Budget to establish a new 
Senior Executive Service position in the National Park Service for an 
Associate Director for Partnerships and Business Practices, which will 
enforce our commitment to improving the concessions program. Another 
effort involves the increased consideration of performance-based 
contracting measures. Though the report focuses on the condition and 
management of lodging facilities operated by concessioners, it appears 
that many of the factors that were examined could apply equally to 
other aspects of the NPS concession management program. The 
implementation of these recommendations will benefit park visitors and 
the program in general.
    The report covers issues that are very similar to those that are 
being dealt with by the National Park Service Management Advisory 
Board. This body, created by Congress in the Concessions Management 
Improvement Act of 1998, is tasked with advising the Secretary on ways 
to improve the concessions program. The Board consists of members from 
the hospitality, tourism, accounting, outfitting, and crafts 
industries, as well as a member from a nonprofit conservation group, 
and a member from a state government agency. The Board is in the 
process of preparing a report to Congress pursuant to this act, and it 
will deal with many of the issues covered by this GAO report, such as 
outsourcing, and the professionalization of the NPS concessions 
workforce.

               Workforce Professionalization and Training
    The GAO report recommends that NPS recruit workers with business 
and hospitality backgrounds, and train its employees in these 
disciplines. It notes that our program lacks employees with 
professional education and experience in business, finance, and 
accounting. We agree that NPS must enhance its concessions management 
expertise by improving training for current employees, recruiting new 
employees with a background in the hospitality industry, and 
contracting out when it is more efficient to do so. The NPS previously 
identified professionalization of the work force and succession 
planning as a priority and identified them as elements in the 
Concession Careers Future Report approved by the Associate Director, 
Park Operations and Education in 1997. The report outlines a series of 
human resource management processes that will allow us to 
professionally manage the concessions program into the next century. 
The Concessions Management Improvement Act of 1998 could potentially 
provide us with some additional fiscal resources, especially to address 
immediate needs for appraisals and financial analysis of contracts that 
have built up over the past few years.
    We understand the need for more concessions staff with a background 
in the hospitality industry. We believe, however, that the GAO report 
may understate the value of concession managers and staff having broad 
experience in other park programs. It is common practice in business to 
rotate key staff through different programs within a company to gain a 
breadth of experience in company operations. We believe the most 
effective team for NPS concession management consists of a good mix of 
those with experience in other park programs, teamed up with 
specialists from the business community and hospitality industry. In 
fact, employees who have a stronger NPS background and insignificant 
hospitality experience, administer the outstanding program at Zion and 
Bryce Canyon National Parks that was highlighted in this report.
    In the same vein, we believe that GAO may have over-emphasized the 
importance of specialists from the hotel industry. The majority of 
businesses in national parks are not part of the hospitality industry, 
which is generally thought to include lodging, food service, marinas, 
and merchandising. More than half of all park concession contracts 
involve traditional park activities, such as livery operations, river 
running, hiking, and climbing, all of which have very little or no 
relation to the standard hospitality industry activities and 
businesses. Less than 25 percent would be recognized as traditional 
industry operations. Alaska, for example, has 400 companies providing 
commercial visitor services in 15 national parks. Only three of these 
are primarily in the lodging business. The majority is in guide and 
outfitting, with the largest revenues and franchise fees generated by 
cruise and tour operators. Of course, the majority of concessions 
revenue is earned from businesses in the hospitality industry, and our 
emphasis should be on improving the oversight and management of these 
contracts.
    Another area of emphasis is the increased use of performance-based 
contracting. People with financial skills, coupled with current 
facility assessments and adequate planning documents are necessary for 
development of contract requirements, while people with contracting 
backgrounds are needed for the actual mechanics of contracting and 
contract administration (amendments, extensions, sales/transfers). More 
contracting challenges could also arise as competition for new 
contracts increases as a result of Public Law 105-391 and sales and 
transfers become more complex. Concessioner support of the NPS visitor 
service and education mission depends on the traditional agency 
abilities and knowledge that park employees bring to the table when 
working with concessioners. Yet, we also need contract specialists that 
can introduce some of the advances that other agencies and businesses 
have made in using performance-based contracts to encourage more 
responsive contractors and concessioners.
    The National Park Service Organic Act, as well as the new 
concessions law, provides for visitor use and enjoyment of an area when 
necessary and appropriate and when consistent with the protection of 
park resource values. The use component is not an independent or 
unconnected arm without any ties to our agency preservation 
responsibilities. There must be a coordinated effort that blends 
together the use and preservation components seamlessly when providing 
a park visitation experience.
    The National Park Service will aggressively recruit from the 
private business sector when specific positions require that type of 
knowledge and expertise. The NPS will also implement the previously 
discussed Concession Careers Future Report to ensure NPS employees with 
concession responsibilities have mastered program competencies. 
Furthermore, the NPS will contract out for expertise when it is 
appropriate to do so. In the interim, we are developing a concession 
contracting certification program modeled after the Department of the 
Interior's contracting officer's warrant certification program, and are 
having discussions with Cornell University and the Department of 
Defense in the development of an advanced finance course. We have also 
discussed with the Department of Defense Training Academy the cross 
training of NPS concession personnel and the possibility of developing 
specialized training specifically to meet NPS contracting needs. We are 
also working with Northern Arizona University to develop a hospitality 
curriculum for concessions employees.
    We have recommended that $90,000 be dedicated for concession 
training in the FY 2001 servicewide program. Additional training funds 
may be needed, depending on the mix of training, new hires, and 
contracting out.
                   Out-of-date Contracting Practices
    The GAO Report also stated that NPS has outdated contracting 
practices. We agree with GAO that concession contracting can benefit 
from the best practices of the Federal Acquisition Regulations. There 
is, however, a significant difference between concession contracting 
and the procurement function. Concessions contracting must have as its 
primary goal the protection of park resources. FAR contracting, on the 
other hand, is often (but not always) focused on the lowest cost 
bidder. Both, however, are intended to obtain the most appropriate 
return to the government, so there are issues that apply to both.
    We concur with GAO that contract extensions hamper the 
effectiveness of the program and affect the quality of visitor services 
and facilities. Public Law 105-391 and new concession regulations will 
allow us to move forward and address this important issue.
    The National Park Service will review the concession program and 
update its practices where appropriate. We will also continue to 
investigate mechanisms, such as performance-based contracting, for 
providing financial incentives to concessioners for exceptional 
performance and disincentives for mediocre performance. The development 
of certifications and specialized training for our personnel, as noted 
above, will help us update our contracting practices.
                              Outsourcing
    The GAO report also recommends that NPS outsource certain aspects 
of the concessions program. We agree with GAO and are, in fact, 
presently outsourcing significant components of the concession 
contracting process. Financial analysis, appraisals, and arbitration 
are contracted with the private sector on a regular basis. There are, 
however, other significant components of the contracting process, such 
as planning, that occur at the park level and cannot be contracted out. 
Park planning documents based on General Management Plans, Development 
Concept Plans, Commercial Services Plans, and cultural and natural 
resource compliance documents relate to the fundamental mission of the 
Park Service to preserve park resources, and thus should not be 
contracted out.
    The National Park Service will continue to contract out portions of 
the concessions contracting program. We will also explore the 
possibility of contracting out other functions, such as intermittent 
inspections of larger, more complex concession facilities with 
centralized teams to augment existing park concession management 
programs.
                         Lack of Accountability
    We concur with GAO that the NPS must improve accountability of park 
managers. A number of factors contribute to this weakness. One factor 
is the use of the collateral duty concession manager in parks with 
major, complex concession programs. Collateral duty personnel 
administer approximately 20 percent of the 90 contracts that gross over 
one million dollars. The use of collateral duty personnel contributes 
to a lack of understanding of the details of the program, an 
inconsistent approach on how the program is managed and a lack of focus 
and consideration for the complexity and importance of the concession 
management program. Technical assistance to some of these parks could 
remove the need for most collateral duty operations. Coupled with a 
policy that would place full-time concession specialists in parks that 
presently have collateral duty personnel administering the concessions 
program, this would ensure a more consistent approach to concession 
management servicewide.
    We agree with GAO that successful completion of concession 
management responsibilities and oversight should be considered during 
annual performance reviews. This is a review that must be applied 
servicewide.
    NPS will ensure successful completion of concession management 
responsibilities during annual performance reviews conducted by the 
Director for each regional director, and by the appropriate regional 
director for each park superintendent with concession responsibilities.
    This concludes my testimony. I would be happy to answer any of your 
questions.

    Chairman Radanovich. Also for the record, we are allowing 
the written testimony from the Department of Interior's 
Inspector General for the record, and I ask unanimous consent 
that the full testimony of each witness be in its full text in 
the record. Without objection, so ordered.
    [The prepared statement of Earl E. Devaney follows:]

    Prepared Statement of Earl E. Devaney, Inspector General, U.S. 
                       Department of the Interior

    As the Inspector General of the Department of the Interior, I want 
to thank you for this opportunity to provide a statement to the 
Committee about the National Park Service's (NPS) management of 
concessioners at our nation's parks.
    The Office of Inspector General (OIG) has provided extensive audit 
coverage of NPS's concessions management, contracting, and fee 
collection activities over the past decade. Repeatedly, we have issued 
audit reports that describe ineffective, inefficient, and 
disadvantageous NPS concessions management practices; inadequate 
oversight of concessioners' operations; and concessioners' 
noncompliance with Federal law and internal NPS policy. Our audits 
reveal three general shortcomings in NPS's concessions management:
    1. NPS has not obtained a fair return from concessioners that 
operated in the national parks, particularly on franchise fees, which 
are revenue-based fees that concessioners pay the Government, and on 
fees for the use of park buildings and facilities;
    2. NPS has not received full reimbursements for utility and 
maintenance services provided to concessioners; and
    3. NPS has not employed businesslike practices, such as competitive 
procurement practices and unrestricted offerings of concessions 
opportunities, in contracting for concessions operators.
    Legislation governing Federal concessions policy explains some of 
NPS's failures to follow businesslike practices in its management of 
concessions. Prior to November 1998, the controlling legislation was 
the Concessions Policy Act of 1965, which had few incentives for NPS to 
manage its concession program in a more businesslike fashion. For 
example, until 1998, all franchise fees were deposited into and 
retained by the U.S. Treasury. Thus NPS reaped no financial benefit 
from aggressive efforts to obtain higher concession fees. Also, until 
1998, concessioners were given preferential rights in contract 
renewals--a condition that discouraged competition in concession 
contracting.
    With passage of the National Park Service Concessions Management 
Improvement Act of 1998, NPS was granted the right to retain concession 
fees and existing concessioners' preferential rights (with few 
exceptions) were no longer authorized by law. Since the Improvement 
Act's passage, NPS has not resumed concession contracting. As such, NPS 
has not been able to benefit fully from the potentially more 
advantageous terms and conditions that might be provided in new or 
reissued concessions contracts.
    The OIG continues to have concerns about NPS's commitment to 
improving its concessions program. Time and again, we have issued audit 
reports making recommendations for improving concessions management, 
and time and again NPS has not effectively or fully implemented these 
agreed-upon recommendations. For example, in 1990, we issued a follow-
up audit report on concessions management, in 1994 we issued another 
concessions management report, and in 1999 we issued an audit about 
concession contracting procedures, all of which stated that NPS failed 
to ensure that concessioners paid fees that adequately compensated the 
Government for the privilege of doing business in the national parks 
and for use of park property. Despite NPS's representations that it had 
implemented our recommendations on charging concessioners fully for 
fees and for their use of park utility and maintenance services, our 
follow-up audits have shown that our recommendations have not, in fact, 
been fully implemented.
    Although the Improvement Act should encourage NPS to adopt a more 
businesslike approach to concessions management, we do not believe that 
the Act's passage has or will, standing alone, result in effective 
management of the concessions program. The deficiencies in NPS's 
concessions program that we have identified in our audit reports--the 
absence of an accountable management structure, insufficient staff 
training and expertise, and insufficient policy and controls to monitor 
policy implementation--appear to be ongoing. For instance, in March 
2000, GAO issued an audit report, ``Park Service: Need to Address 
Management Problems That Plague the Concessions Program.'' That report 
reaffirmed our previous findings, such as NPS's having ``out-of-date'' 
methods for handling its contracting workload and a ``chronic backlog 
of expired contracts, lacking accountability in its concessions 
management program, and having inadequate qualifications and training 
for its concessions staff.
    In summary, these recent GAO findings, coupled with OIG's findings 
over the past decade, suggest that more is needed to bring NPS's 
concessions management in line with responsible businesslike practices.
   summary of oig audit reports relating to national park service's 
             concessions management over the past 10 years
    1. In April 1990, the OIG issued ``Follow-up Review of Concessions 
Management, National Park Service,'' (No. 90-62). The audit, requested 
by the Secretary of the Interior, evaluated NPS's effectiveness in 
managing major concessioners' operations. The audit was a follow-up of 
an OIG March 1986 report ``Audit of Concession Management, National 
Park Service.'' The audit concluded that NPS did not have an adequate 
method for computing franchise fees and did not encourage competitive 
offers for concessions operations. Specifically, the audit found that:
     NPS did not receive adequate fees from large 
concessioners. OIG attributed this deficiency to factors such as NPS 
not charging fees recommended by NPS rate-setting officials, mutual 
agreement clauses in contracts that prevented NPS from establishing 
revised fees unilaterally, and concessioner resistence to higher fees. 
OIG stated that NPS ``generally opted to obtain capital improvements in 
lieu of higher fees'' and that these improvements ``tended to enhance 
the concessioners' facilities.'' OIG also said that NPS's concessions 
program personnel did not have appropriate or adequate educational 
backgrounds to set concession fees. It further referenced an NPS 
Concession Funding Task Force's 1988 draft report that found that 
``additional training for park managers and other personnel involved in 
concession programs was needed.''
     NPS generally did not charge concessioners fair rental 
value for their use of Government buildings. OIG found that NPS did not 
consistently obtain building appraisals and, even when appraisals were 
done, NPS did not charge market rates because concessioners made 
building improvements and/or resisted the charges.
     NPS reduced franchise fees in recognition of 
concessioners' agreements to pay for capital improvements. These 
improvements, however, generally benefitted the concessioners 
exclusively. Also, NPS did not have adequate procedures for ensuring 
that concessioners' planned capital improvements were properly financed 
and completed in accordance with contract provisions.
     NPS did not solicit competition in concession contracting 
and provided insufficient information for interested parties to 
evaluate offered concession opportunities.
    The 1990 audit contained 16 recommendations to correct these 
deficiencies in the concessions program.
    2. In September 1994, OIG issued ``Concessions Management, National 
Park Service,'' (No. 94-I-1211). The audit evaluated whether NPS 
received a fair return from concessioners and effectively managed the 
collection of and accounting for franchise fees. The audit found that:
     NPS did not consistently obtain a fair return from 
concessioners because first, NPS had not implemented recommended fees, 
second, NPS undercharged for the use of Government buildings, third, 
NPS overcompensated concessioners for their park investments, and 
fourth, NPS allowed concessioners to exclude the sale of Native 
American handicrafts from gross receipts (on which franchise fees are 
based).
     NPS did not adequately monitor special account deposits, 
record as a receivable franchise fees due from concessioners, record 
franchise fees accurately, require monthly payment of franchise fees, 
or enforce the requirement for electronic fund transfers of fee 
payments of $10,000 or more.
    Many of the deficiencies identified in the 1994 audit report were 
previously identified by the OIG 4 years earlier in its 1990 audit 
report. The 1994 report contained 13 recommendations.
    3. In February 1997, OIG issued ``Oversight of Concessions 
Operations and Fee Payments, Guest Services, Inc., and Rock Creek Park 
Horse Centre, Inc.'' (No. 97-I-515). This audit report similarly 
evaluated whether the NPS effectively managed the collection of and 
accounting for franchise fees from concessioners. The report found that 
NPS:
          1. Had not reviewed and revised concessioners' operating and 
        maintenance plans as required by NPS policy;
          2. Did not monitor concessioners' operating hours and 
        seasons;
          3. Did not always approve concessioners' rates and prices;
          4. Allowed concessioners to operate at facilities that were 
        not authorized under a concession contract; and
          5. Allowed a nonprofit organization to operate in a park 
        without contract authorization. Also, NPS did not ensure that 
        concessioners reimbursed the Government for all utility costs 
        and did not ensure that concessioners implemented adequate 
        controls over the revenues on which franchise fees are based.
    The report contained eight recommendations.
    4. In March 1998, OIG issued ``Concessioner Improvement Accounts, 
National Park Service'' (No. 98-I-389). The objective of the audit was 
to determine whether amounts deposited into concessioners' special 
accounts and expenditures from the accounts were appropriate. The 
report found that first, NPS did not provide clear, sufficient, and 
timely guidance on special accounts; and second, two of five 
concessioners made improper deductions from gross receipts in 
determining amounts to be deposited into special accounts.
    The report contained three recommendations.
    5. In March 1998, OIG issued ``Follow-up of Maintenance Activities, 
National Park Service'' (No. 98-I-344). In this follow-up audit, the 
OIG found that NPS had not taken sufficient actions to recover its 
costs of maintaining facilities used by concessioners and other non-
Governmental entities.
    The report contained three recommendations.
    6. In April 1998, OIG issued ``Follow-up of Recommendations 
Concerning Utility Rates Imposed by the National Park Service'' (No. 
98-I-406). This follow-up audit concluded that NPS did not revise 
guidance on the recovery of utility system capital investment costs, 
did not fully recover all utility system operation costs from non-
Governmental users, and failed to ensure that receipts for utility 
services were collected and deposited in compliance with NPS policy.
    The report contained six recommendations.
    7. In June 1999, OIG issued ``Concession Contracting Procedures, 
National Park Service'' (No. 99-I-626). The objective of the audit was 
to determine whether NPS's concessions contracting was conducted in 
compliance with Federal law and in accordance with NPS guidance. The 
OIG found that NPS did not fully comply with Federal law and NPS policy 
in contracting for concession operations, and that NPS did not ensure 
that the Government obtained a fair return from concessions operators. 
Specifically, NPS did not comply with its policies for approving 
concession contracting actions and fee adjustments and for extending 
expired contracts. NPS also did not periodically reconsider fees as 
required by law and by provisions in concessions contracts, did not 
consistently obtain reimbursement for utility services provided to 
concessioners, and did not require all concessioners to assume full 
responsibility for maintaining their facilities. Also, NPS did not 
always implement or fully implement recommended fee adjustments, 
identify the projects for which special account funds were to be used, 
or charge building use fees. All of these deficiencies had been 
identified in prior OIG audit reports. OIG also found that NPS received 
no payments for Government-owned housing used by concessioner 
employees. Furthermore, if the concessioners received rent for the 
housing, they were not required to include the rent in the revenues on 
which their fees were based.
    The report contained nine recommendations.

    Chairman Radanovich. My first question is for you, Mr. 
Hill. And I appreciate Ms. Finnerty addressing each problem and 
it sounds like you are on the right track. There is a problem 
with the poster over here. We have had 7 reports over 10 years. 
One thing that you mentioned that has occurred most recently 
has been the recent concessions contract. Mr. Hill, based on 
the lack of performance as a result of the last 7 reports over 
the last 10 years, in your view will the concessions contract 
that was recently adopted--I think it was what, 1998--will that 
help in a situation like this or is this an issue of funding? 
Is it an issue of lack of response to congressional inquiries?
    Mr. Hill. I think you are referring to the National Parks 
Omnibus Act of 1998, those requirements that put some 
additional or new requirements on the concessions program. 
There were a lot of things contained in that law, perhaps the 
biggest being getting rid of the preferential right of renewal 
provision that the old law provided for. And I think there are 
a lot of things that will help the Park Service improve the 
program. There are a lot of things in that law that are 
consistent with prior findings and recommendations that GAO 
made over the years. But I think the problems that we are 
talking about today are more management problems and I don't 
think that law is really going to address that. I think that 
has got to come from within the Park Service and Department of 
the Interior itself in order to fix those problems. Those 
problems can continue to exist even with the new law.
    Chairman Radanovich. Why, after 7 reports over 10 years 
articulating problems, is there still no change in management?
    Mr. Hill. That is probably a question you should ask the 
Park Service. Our feeling is that it has been a low priority. 
They have not given it sufficient attention and authority and 
come to grips with the problem.
    I am encouraged to hear about the positive response that 
they are planning to do, but I think there is certainly a need 
for the Congress and certainly GAO to continue to provide 
oversight and follow through to make sure that they implement a 
lot of the provisions that Ms. Finnerty just got done 
describing.
    Chairman Radanovich. Mr. Garden, for Mr. Vreeman who has 
been frustrated with his contract that he signed for Kings 
Canyon, is there relief on the horizon? Are you still in the 
middle of the problems? I know that you have recently opened 
one new facility, but there are more to come, I think. What is 
the status? Is this a nightmare that has already happened or a 
nightmare that you are in the middle of?
    Mr. Garden. A little of both. There has been a nightmare 
which put him behind schedule. I do understand that currently 
there are discussions that are underway and they are going 
fairly well. It is Mr. Vreeman's hope that it is not too late 
to get the work done that he needs to get done to make the 
contract viable over the full 15 years, but that is by no means 
a given right now.
    Chairman Radanovich. Ms. Finnerty, your response to--it has 
been 7 reports over 10 years, and listening to GAO it sounds 
more like a management problem than a funding problem. Would 
you care to respond to that? And also perhaps with the results 
of what we see here under the lack of experience and qualified 
personnel dealing with concessions contracts, has that been--
has that been an issue that is considered low priority with the 
Park Service? Does it therefore not get addressed because they 
have given attention to higher priority issues?
    Ms. Finnerty. Well, I think it is obviously--and we have 
had a number of reports, many of which, as GAO pointed out, 
have sort of repeated the same findings and concerns. There 
have been sporadic attempts to try to deal with this, to try to 
issue directives to the field to ask them to start focusing on 
this. I think it is a combination of things. I think it is 
perhaps not enough resources in the program. We only have 125 
permanent people managing a $765 million program. That is down 
from what we had a number of years ago due to downsizing and a 
number of other things. I don't think that we have had the 
resources and been able to put the resources into training and 
professionalization.
    I would agree with GAO that I don't think the new 
concessions law and the procedures that it spells out, 
particularly on contracting and that kind of thing, necessarily 
are going to fix some of the management problems that we agree 
that we have had. But there are two provisions of that law that 
are going to help us address this program and the problems.
    One is the establishment of an advisory board which is an 
external group made up of professionals with a lot of expertise 
in the area of concessions management, accounting, finance, 
tourism, outfitters and those kinds of things. They have met 
twice. They are actively engaged in working with us. At their 
last meeting they had extensive discussions on the GAO report 
and recommendations. They will be coming forward in November 
with a report to the Secretary, which I expect will help us to 
address and deal with a lot of these issues so we have that 
body that is giving us a lot of assistance.
    Secondly, the new law does allow franchise fees to be 
retained by the National Park Service. Eighty percent of them 
are in the parks where there are concessions and 20 percent go 
into a servicewide pot, so we now have a source of funding that 
we are tapping into this year already to help us with some of 
the outsourcing and the contracting and also some of our 
training and professionalization needs.
    So I think those two things are going to help us and give 
us some resources that we haven't had in the past and we are 
very much looking forward to having those things assist us in 
the management of the program.
    On the issue of training for people who do contracting and 
concessions, we obviously agree with those findings. We have 
been pretty deficient in the training requirements that we have 
asked our contracting people to--in concessions, essentially 
they have had almost no training and we now have a 5-year 
training program in place. We estimate if we spend about 
$450,000 over the next 5 years we can substantially increase 
the professionalization of the group. We are also looking at 
requiring certification which they do under other procurement 
regulations. So I think some of those things are well underway 
and I think we will have some real positive influences on the 
program.
    Chairman Radanovich. Thank you. I yield to you, Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Hill, let me discuss some background information about 
the GAO report and some of the conclusions one might draw from 
it about the duration of this problem and the nature of it. How 
many parks have you looked at and how did you determine the 
sampling procedure as to what you would look at?
    Mr. Hill. Over the two audits that we did, the first audit 
looked at 10 parks.
    Mr. Price. When was that done?
    Mr. Hill. It was issued in 1998 and it included the results 
of our investigation at 10 parks. The parks that we chose there 
were a mixture of parks. Obviously we were focusing on parks 
with lodging facilities. We wanted to find some parks that were 
operating under the government-owned, concession-operated types 
of facilities as well as the concession-owned, concession-
operated types of facilities. We wanted a mixture and a 
geographical dispersion. We wanted different concessionaires.
    And that audit was strictly focused at looking at the 
conditions of these facilities. What we basically found was a 
mixed finding. We found all kinds of interesting things. We 
found some parks that the lodging facilities were in very good 
condition, others were in OK condition, and we found a number 
that we thought were in terrible condition.
    The second report was geared more toward why. Why the 
inconsistency in the facilities out there? We took five of the 
same parks that we had originally visited. We took two that 
were in very good condition and three that were not in so good 
condition. In addition, we added two more parks that had 
multiple concessionaires operating it to see what was the 
common thread that would create this inconsistency out there. 
We looked for a pattern where there was a government-owned, 
concession-operated facility or a concession-owned, concession-
operated facility, or maybe it was a seasonal park. We wanted 
to get a feel for what was the root cause that would create 
these inconsistencies. Maybe it was the contract itself.
    The bottom line was that there was no pattern other than 
the common thread we found was the lack of management and 
attention and accountability that we found pervasive in the 
program.
    Mr. Price. So you picked a diversity of park and 
concessionaire and management arrangements in the initial 
sample?
    Mr. Hill. That is correct.
    Mr. Price. Were you focusing on situations where problems 
were reported or suspected? Did that enter into your choice of 
situations to investigate?
    Mr. Hill. Not really. I think we were looking at the larger 
parks. We went to the Park Service and sought their advice in 
terms of getting input from them as to what parks they felt 
would be good parks to look at. We consulted with them in the 
process as well.
    Mr. Price. So you wouldn't have much doubt that the range 
of findings that you reported could be generalized to the 
broader universe?
    Mr. Hill. The 12 parks that we went to are among only 30 
parks with these types of hotel lodging facilities. There are 
an additional 15 parks which have accommodations but they are 
considered more rustic or back-country type things. So 12 out 
of 30 is a fairly representative sample. I don't think that the 
Park Service would question that it was a biased sample and I 
think they would agree that it is fairly representative.
    Mr. Price. I want to get some parameters established here. 
As the Chairman said and you said, this is not the first 
report. They go back 10 years at least. What is the time frame? 
When did we first have a report roughly comparable to the one 
that we are looking at now? Ten years was used; is that 
accurate?
    Mr. Hill. There have been reports issued by the Park 
Service itself, the Inspector General, that have documented 
problems with the concessions program over the past 10 years.
    Mr. Price. That raises a question about what does it mean 
to say that these problems have persisted? One question is, has 
the kind of problem we are talking about here remained the 
same? And then, secondly, are we talking about the same parks 
over time? For example, have Death Valley and Kings Canyon or 
Sequoia consistently had problems? In those earlier reports, 
were problems identified and fixed and are we now looking at 
different parks? Can you put these in perspective? It is not 
very helpful if we don't know what kind of mix of parks we are 
looking at.
    Mr. Hill. That is part of the problem; there is no baseline 
data that anyone keeps. It is hard to go back. There are no 
centralized inspection records where you can go back and see 
inspections done at these parks and the results of those 
inspections. These are all done at the park level. They are 
self-done inspections basically. The parks are supposed to 
maintain the records. But, in some cases they don't. The 
information that they collect is not very good. We generally 
know that when they do these self-inspections, most of the time 
they give satisfactory ratings.
    Mr. Price. You are referring to studies and reports that go 
back 10 years. Those are not all internal self-inspection 
documents. Did GAO not look into the time line on these 
situations that you were examining and look back and see to 
what extent these problems had existed earlier or had been 
dealt with earlier?
    Mr. Hill. The problems that were identified in the earlier 
studies dealt with the problems that we mentioned in terms of 
lack of qualified staff, lack of training, lack of 
accountability. Those problems have been raised for the 10-year 
period, and we certainly found them present in the audit work 
that we did. Our audit was limited to the lodging 
concessionaires and the extent of our work was done in 
basically the past 2 or 3 years.
    Mr. Price. You specifically identified serious problems at 
Death Valley and Sequoia-Kings Canyon. Do you have information 
about how long those problems have persisted?
    Mr. Hill. No, I don't.
    Mr. Price. So the generalization that these problems have 
been around for 10 years and not dealt with, they don't apply 
to individual cases? I don't understand the basis for the 
generalization.
    Mr. Hill. Those studies were done by the Park Service and 
the Inspector General themselves. When we went out and looked 
at these lodging facilities, we found those same problems 
persisting at those facilities. I can't say what the condition 
of those facilities--the lodging facilities were 10 years ago, 
because we did not do that work and those reports explicitly, 
and we don't have that level of detail in them that I'm aware 
of.
    Mr. Price. I see. In your opinion, has the leasehold 
surrender interest provision of the 1998 National Parks 
Management Act improved the efforts of private concessionaires 
to upgrade facilities? First of all, if you can explain how 
those provisions work, what kind of incentives there are for 
and against concessionaire investment in facilities, and what 
is your bottom line assessment?
    Mr. Hill. I do know that the old law provided for a 
possessory interest that the concessionaire would build up in 
facilities. That basically was changed by the most recent law 
and it does provide a leasehold surrender interest basis. I 
don't have much more details than that at this time.
    Mr. Price. It is an interesting question. Does that provide 
stronger or weaker incentives for a concessionaire to upgrade 
facilities? I want to ask the Park Service that question as 
well.
    Mr. Hill. I don't have an answer right now.
    Mr. Price. Let me turn to the Park Service in the second 
round. But first, Mr. Hill, in the GAO report you address and 
then dismiss several potential mitigating factors on 
concessions quality. You say that you don't find significant 
differences between seasonal and year-round use or between 
public and private ownership, et cetera. Is there anything any 
lingering questions here as to the firmness of those findings 
that these factors are not important?
    Mr. Hill. This is what I was referring to earlier where we 
were looking for a pattern in terms of why these conditions 
varied so greatly and we did not see a pattern. In one case of 
the 12 parks that we went to, the same concessionaire was 
operating the lodging facilities at three different parks, and 
we found very different conditions even within the same 
concessionaire. What that shows is that the quality of the 
conditions of the lodging facilities are dependent largely on 
the quality of the concession staff that are operating it and 
the quality of the park staff that are overseeing that 
concessions contract. It has nothing to do with a particular 
concessionaire or arrangement; that is, concession-owned and 
operated versus government-owned and concessionaire-operated. 
We found no pattern in terms of seasonality or anything like 
that.
    Mr. Price. So the pattern that you do find applies to what?
    Mr. Hill. It applies to the degree of management and 
oversight that the Park Service officials are providing at the 
park unit itself and the extent to which they are accountable 
for what they are doing out there.
    Mr. Price. Your conclusion is that it is not uniformly 
defective, but sporadic. It is sporadic and therefore in need 
of systematic attention? Is that a fair statement?
    Mr. Hill. It is very park-specific depending on the people 
involved in this. We think that there is a greater need for 
more centralized oversight and management of the program at the 
headquarters and regional office level and the need to make the 
parks more accountable to make sure that you have consistency 
throughout the entire system.
    Mr. Price. Thank you.
    Chairman Radanovich. Thank you, Mr. Price. Mr. Toomey.
    Mr. Toomey. Thank you, Mr. Chairman.
    I would like to ask Mr. Hill just a couple of questions. 
The March 2000 GAO report dealing with--specifically in the 
section where you refer to the Park Service concessions 
contracting practices, it mentions that these practices are out 
of the date and do not reflect the best practices of the 
Federal Government or the private sector or other contracting 
parties. It talks specifically about performance-based 
contracts being the norm, I think it would be fair to say, is 
my understanding of the way that this is written. Has the GAO 
specifically recommended the use of performance-based 
contracts?
    Mr. Hill. We have not specifically recommended that, but it 
is part of the FAR requirement; but here again, this particular 
program is not required to follow the Federal acquisition 
regulations.
    Mr. Toomey. But it is your belief that performance-based 
contracts are the better way to go; that is the standard for 
this kind of contracting; is that correct?
    Mr. Hill. That is correct. Not only do we believe that, I 
think the Department of Interior believes that in whole, 
because we have statistics that show that 77 percent of the 
contracts that they let over $100,000 use performance-based 
contracts, but not in this program.
    Mr. Toomey. In your research have you found any evidence 
that the Park Service is moving in the direction of 
performance-based contracts in any systematic fashion?
    Mr. Hill. We did not find any evidence of that, although I 
would defer to Ms. Finnerty who made reference to that in her 
remarks earlier.
    Mr. Toomey. One of the things that is referred to in the 
GAO report, it states that there are several senior Park 
Service officials who indicate that the agency's has no plans 
to move in the direction of performance based. Maybe the 
question should be directed to Ms. Finnerty.
    What is the position of the Park Service regarding the use 
of performance-based contracts and what kind of progress has 
been made, if any, in using them?
    Ms. Finnerty. Congressman, we have made and continue to 
make progress in the use of performance-based contracting. Much 
of the information gathered for this GAO report was gathered in 
1998 and 1999, so it is dated. We certainly have moved forward 
in the last several months. Even though we do not believe that 
the concessions contracts are subjected to the Federal 
acquisition regulations as a whole because it is not Federal 
funds that are being used, we do agree that there are aspects 
of the FAR regulations that can and should be applied to 
concession contracting to help us do a better job, and one of 
those is performance-based contracting. And we are working 
closely with individuals in the departments and with our 
solicitor's office to get those procedures in place and 
hopefully have them in place starting in calendar year 2001. So 
it is our full intention to apply performance-based contracting 
as we get into all of the various revisions of contracts that 
we have to get underway in the next couple of years.
    We also intend to use some of the aspects of FAR as far as 
training requirements and certification of individuals that are 
doing this contracting in the concessions field. We feel that 
is important, and part of our proposal is to get those 
individuals trained, to get them warranted, adequate training 
so they can be more effective in the issuance of contracts.
    Mr. Toomey. What you are saying then, beginning next year 
we will start to see greater prevalence of performance-based 
contracts. I wonder how long has it been that performance-based 
contracts have been the norm or widely accepted as the best 
practice for the Federal Government? And assuming that has been 
awhile, why is it that it is just now that the Park Service is 
starting to use these contracts?
    Ms. Finnerty. When this issue came up a number of years 
ago, we sought some legal advice about whether FAR regulations 
should apply to concessions contracting, and we were told no, 
they didn't. So probably we took that answer and went along our 
way. But in looking closely at some aspects of that, we realize 
that we certainly should be looking at pieces of that and 
making that applicable to our program, and we intend to do 
that.
    Mr. Toomey. Thank you.
    Chairman Radanovich. Thank you. Mr. Gutknecht.
    Mr. Gutknecht. Mr. Hill, how long have you been with GAO?
    Mr. Hill. Thirty years next month.
    Mr. Gutknecht. So you have participated in a significant 
number of these kinds of audits?
    Mr. Hill. A significant number, yes.
    Mr. Gutknecht. I must say this is some of the toughest 
language I have ever read. Can you remember ever using language 
like this in an audit before, and can you give us a comparison? 
For example, when you say just reading from some of the 
comments in the audit, that--you say and I will quote, ``Little 
hope for improvement. The agency's past record in taking action 
to change its hiring practices and upgrade its training is not 
encouraging.'' and you go on to say that the Park Service has 
generally agreed that it needs to professionalize its 
concession work force. However, the agency's past performance 
suggests to us that there can be little confidence that the 
agency will address these issues.
    Literally, the more I read this, this is one of the most 
damning reports I think I have ever read. And it is 
particularly troubling because this is a--I mean, perhaps here 
in Washington $765 million doesn't seem like a lot of money, 
but back home a three-quarters of a billion dollar business is 
a big business. And it may well be that to the average consumer 
of these facilities, in other words the people who go to the 
parks, their level of expectation is such that they may say 
well, I guess this is what we expect when we come to Death 
Valley. But at the same time we are charging, it seems to me, 
pretty healthy rates for these rooms. In some respects, 
Americans look at this and say, I am paying for this in my 
taxes, and now I am paying up to $80 or perhaps more a night 
for these facilities. It just seems to me that we have a 
responsibility to treat them like real consumers and that is 
not what is happening.
    I think the most troubling thing to me is that in your 
passages under the headline of Lack of Accountability--and 
frankly I was one who really felt that this committee, the 
Budget Committee, ought to have some subcommittees and we ought 
to have some oversight hearings, because when you look at all 
of the money that we spend on behalf of American taxpayers, I 
don't think that it is too much for those taxpayers to ask that 
we do some effort to make certain that they get their money's 
worth.
    Let me read some of the quotes, and I would like you to 
comment and perhaps Ms. Finnerty would like to comment as well. 
This is very troubling to me. ``the former chief of concessions 
(who retired during the course of our review) told us that he 
did not have information on the condition of the lodging 
facilities in the parks.''
    He didn't have information. In some respects I have to ask 
myself: What is he doing?
    ``He indicated that our review would provide him with 
valuable information about the condition of these facilities. 
He did not have such information, because although the 
condition of the facilities is generally known by the park 
managers, it is not generally known or reported to higher 
levels within the agency.''
    That is astonishing to me, and it should be astonishing to 
every American. Here is a person who is responsible for 
concessions in the Federal park system and he doesn't know what 
the conditions are out there.
    This is not just a simple matter of a little more 
management training. There is a fundamental breakdown here in 
who is responsible and accountable for what.
    I will read another quote. Well, I don't have to read many 
more quotes. Is this one of the toughest audits that you have 
ever written?
    Mr. Hill. I can't say that. It rates right up there. We 
have found similar types of concerns in other Park Service 
programs. There seems to be a pervasive culture out there where 
the park superintendents are given the authority and the 
discretion to basically operate the parks with little oversight 
by the regional or headquarters staff or accountability to 
them. We have found this in numerous areas over the years. This 
is another area that we are adding to it. It seems to be the 
culture of how the Park Service operates.
    We are bothered by it. I can understand a decentralized 
organization. You would want the people to operate the park, 
but that doesn't mean that you divorce yourself from 
headquarters and regional office level in terms of oversight 
and management of the program. You need to have performance 
measures and objectives, goals. You need to have inspections 
and evaluations. You need to know how your program is operating 
at all 379 units because you want the taxpayers and the 
visitors to have the best experience possible when they visit 
these parks.
    Mr. Gutknecht. Mr. Hill, in the private sector--and you 
hate to say that the parks ought to be run by the private 
sector, but they could learn a little bit. It strikes me if you 
had people operating facilities like this, at some point one of 
them might lose their job. Has anybody been terminated as a 
result of some of these things and continual breakdowns in 
management accountability?
    Mr. Hill. No, not to our knowledge.
    Mr. Gutknecht. Ms. Finnerty, do you want to respond to 
that? We are here representing the taxpayers. It is their 
parks, and we owe it to them to give them a good experience at 
a fair price, and it strikes me that is not what is happening 
out there.
    Ms. Finnerty. This accountability issue and dealing with a 
very decentralized organization is something that the Park 
Service is struggling with. We have 379 units, seven regional 
directors that try to provide oversight, enormously complex and 
numerous programs and issues and those kinds of things.
    The director is very well aware that this is an issue not 
just for concessions but other programs. I think he is 
committed to trying to put in place better accountability 
systems and better checks and balances and being able to look 
at what is going on out there and reporting on--and doing 
evaluations and monitoring and those kinds of things.
    The ability to roll information up on a national level is 
something that we have struggled with. You literally have to go 
to the parks to find out what the facts are.
    We have made some good progress in the last year to get 
some systems in place so we can answer basic questions on a 
Service-wide basis. We are just going to keep working on it, 
and the director is committed to that. He is very well aware of 
this GAO audit and several others that we just have to address 
and try to figure out how we are going to become more 
accountable and get the information that we need at the 
national level and then how are we going to individually hold a 
very decentralized organization more accountable than it has 
been in some of these programs.
    Mr. Gutknecht. Please assure us today that we will not have 
a situation 1 year from now where the person who is responsible 
for concessions has no idea what condition these facilities are 
in. It seems to me if they can't go out to some of these 
facilities they can send someone out. Employees from the 
National Park Service, if they would stay in some of these 
facilities, perhaps you can send a report with them and maybe 
give them a discount.
    I have to come back to something that the GAO said, and 
that is, if you read their report, it essentially says money is 
not really the answer. I mean, at some point it really is about 
just managing the facilities that you have.
    Unfortunately, I am afraid what is going to happen is the 
answer to every problem is more money. Well, excuse me, I don't 
think that this is going to take a whole lot of money to 
resolve. I think once the various park superintendents and 
managers understand that they will be held accountable and 
responsible for the facilities in those parks, I will bet that 
this will improve quickly. But until and unless--and this has 
to come from the top level of the Park Service. Until or unless 
people understand that they are going to be held accountable, 
this story is going to go on and on and on.
    We won World War II in less than 4 years. The idea that it 
somehow takes year and years and years to get something done, 
even by the Federal Government, I think is just grossly 
overstated. I am sorry. On behalf of the people that I 
represent and on behalf of the people on the Budget Committee, 
we are going to demand more accountability of every agency. 
Because that is our job, and we are held accountable every 2 
years.
    I want to thank the chairman for holding these hearings. I 
hope that we have more.
    It is not just to cause heartburn for folks like you. I do 
think that when you read through some of the things in this 
report, it is just unbelievable. You are probably--we are all 
fortunate that our constituents out there back in fly-over 
country really won't get a chance to read this, because I 
suspect that people would be very furious if they learned that 
we have a $765 million industry that is basically not 
accountable to anybody.
    I yield back the balance of my time.
    Chairman Radanovich. Thank you, Mr. Gutknecht.
    Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.
    Let me, Ms. Finnerty, turn to you and ask you, first, to 
give us your take on a couple of the questions that I raised 
with Mr. Hill about the report itself; and then I obviously 
want to ask you about your time line and your plans for dealing 
with some of these GAO recommendations.
    Do you have anything to add about the 10-year time frame 
and the persistence of the problem? Are there things that we 
should know about facilities where there have been persistent 
problems for 10 years or are we talking about a range of 
facilities, comparing apples and oranges? What would you say? 
Is it a fair generalization to say these problems have 
persisted over 10 years and really have not been dealt with?
    Ms. Finnerty. Without the baseline information that we have 
admitted and agree that we don't have, it is difficult for me 
to say that this has persisted for 10 years. I would expect, 
though, that we have had some condition problems and facilities 
that have been in various stages of disrepair over a period of 
time.
    I think some of the management issues dealt with in the GAO 
report are things that have contributed to this, and I think 
obviously we need to get a better handle on it, and we need to 
be more accountable and have better baseline information so we 
know what is going on in the field. Beyond that, I could not 
speak whether these particular conditions have existed in the 
parks for 10 years. You would have to go out to the parks and 
look at their inspection reports and those kinds of things to 
get that information.
    Mr. Price. And the GAO conclusion is that it really doesn't 
seem to matter whether you are talking about seasonal or year-
around facilities or whether you are talking about privately 
owned or government property. Do you agree with that? In your 
own assessments, are there mitigating factors that we should 
attend to?
    Ms. Finnerty. I think, as we look at the various concession 
facilities, we see government-owned facilities that are in good 
shape and poor shape. I think there is a real mix. I think 
there is no particular pattern as far as seasonality and 
ownership. I think there are problems throughout. We haven't 
seen anything to indicate that there is more of a trend with 
one kind of ownership or one kind of seasonality than there is 
with something else.
    Mr. Price. Can you just tell us in general terms what the 
Park Service's time line looks like for dealing with these 
recommendations, especially with respect to hiring practices 
and the implementation of a more systematic program of 
oversight and accountability?
    Ms. Finnerty. We have already started to work on a lot of 
these issues.
    Looking at the training and professionalization, we have a 
5-year training strategy which we have started to implement 
this year; and more of it is under development for the next 
several years. It is our intention to put more resources into 
training and professionalization of our personnel. And we do 
now have a source of funding through the 20 percent franchise 
fee accounts that we can put some more money into training and 
professionalization. We do have under way agreements with 
Northern Arizona University, Cornell and the Army to help us 
professionalize certain aspects of the program.
    As far as our hiring practices, certainly as positions 
become vacant it is our intention to try to professionalize 
those and to try to hire from outside and try to strengthen and 
beef up the background and experience and training of these 
people.
    As far as the contracting piece, we are actively involved 
in trying to apply best practices to contracting, and we hope 
at the beginning of 2001 we will be able to start applying some 
of those. Most of our contracts have to be redone. We have been 
on short extensions. We have had a long moratorium on 
contracting that is now over. So we have a good opportunity to 
influence lots of contracts that are coming up now for 
renegotiation and discussion. That is well under way.
    We do have a request in or pending in the 2002 budget to 
get at some of the other staffing and professionalization 
needs. The idea of centralized inspections is one that we like 
a lot, and we are looking at options to try to provide that. We 
will continue to look at opportunities to outsource. We are 
already outsourcing about a million dollars of work, and I 
suspect that we will increase that over the coming years.
    So efforts are under way and will continue. I think once we 
get the advisory board's report in November and some pretty 
strong recommendations from them, that will give us more 
impetus to move forward and hopefully to make improvements in 
the program.
    Mr. Price. Let me ask you about the possible way that you 
might determine consumer satisfaction. We have talked about the 
quality of service being offered to the consumers, to the 
citizens who take advantage of visiting our parks. I assume 
that you have some kind of consumer satisfaction or visitor 
satisfaction surveys already. Let me ask you a couple of things 
about that.
    First of all, have you analyzed those and can you say 
whether they reinforce or somehow contradict the GAO findings?
    Secondly, are there any plans for maybe improving those 
instruments or using them in more systematic ways?
    Ms. Finnerty. I have here, Congressman, actually a customer 
survey report that we do every year in the National Park 
Service, and we have done it for a number of years. We do three 
to five parks a year. We survey the park visitors to see how we 
are doing. Over the last 5-7 years, we have gone to 70 or 80 
parks. And on concession services we ask about lodging, food 
services and about gift shops. This is system-wide. It is not 
targeted--it is targeted at the parks that are surveyed for 
that year.
    Mr. Price. Can you break it down for the individual parks?
    Ms. Finnerty. Yes. The ratings consistently go from 65 to 
85 percent customer satisfied with lodging, food services and 
gift shops. So they are consistently ranging 65 up to 85 
percent, depending on the questions.
    That doesn't mean that we couldn't do better, and it 
doesn't mean that we can't improve facilities and that kind of 
thing. And certainly maybe one of the things that we should 
consider, we do have a sociologist that works with us, and we 
could perhaps look at and think about doing more tailored 
surveying, particularly as it pertains to concession facilities 
to see how we might be doing and whether we are making the 
improvements. These questions are quite general, but we could 
maybe tailor them more specifically and look at some of these 
issues more specifically.
    Mr. Price. Have you included in these surveys the specific 
parks that the GAO looked at and is there anything that you can 
say about the consistency or inconsistency of the findings?
    Ms. Finnerty. I didn't do that prior to this. I don't have 
a list of all of the parks that have been surveyed. We can 
certainly do that and compare if some of those same parks have 
been visited.
    Mr. Price. I would find that of interest.
    Ms. Finnerty. OK.
    Mr. Price. Your contracting arrangements, you say that your 
period of limited contracting is now ending because you have 
your regulations in place and you have longer term contracts. 
What kind of limitations are going to be on the contracts that 
you grant to private concessionaires? What prompts the decision 
in the first place about whether to privatize concessions or to 
maintain park-owned facilities? And how adequate--when you go 
the contracting route, how adequate are your contracting 
provisions in terms of holding those concessionaires 
accountable and getting the kind of service that you want?
    Ms. Finnerty. In response to your first question about 
whether we decide to go with a concession contract or decide to 
privatize, that case is made on a park-by-park basis.
    One, we look at what provides the best service to the 
visitor. Do we need to have these facilities in a park to begin 
with or can these amenities and these services be provided 
outside of the park?
    In some cases, we have moved facilities out of the park or 
we have determined not to have them in a park to begin with. 
This is all part of the planning process where discussions are 
held about can this be done outside of the park and still serve 
the visitor.
    If they are going in a park, there is a lot of planning 
that has to be undertaken. We have got to look at compliance 
issues and those kind of things.
    As far as the contracting is concerned, I think we are 
comfortable with the new contracting provisions in the law and 
in the regulations. We have been able to streamline the 
process. I think there is more provision for competition in the 
new procedures; and, obviously, we haven't done it yet because 
we are just about to launch into renegotiating over 200 
contracts pursuant to the new regulations that have been in 
place for less than a month.
    I think we have procedures in place, and we will see over 
the next year, 12-18 months, when we are looking at many 
contracts. But I think we are confident that the regulations 
and the contracting procedures will serve us well and will 
provide more competition and hopefully a good return to the 
government and all of those kinds of things that we look at.
    Mr. Price. One further question related to that is the 
leasehold surrender provision of the 1998 act. How do you 
assess that in terms of the kinds of incentives that it 
provides to concessionaires?
    Ms. Finnerty. We believe it provides incentives because it 
provides a compensable interest to the concessionaires. We have 
not applied it yet because we are about to launch into redoing 
the contracts.
    One of the major intents behind the Concessions Management 
Act of 1998 was to make the concessions program more 
competitive, to attract more competition for individual 
contracts. The preferential rider renewal was removed; and the 
feeling of the Congress when they wrote the bill was that LSI, 
because it does provide a compensable interest, would put more 
competition into the process. And we believe that will happen, 
and it remains to be seen as we get in depth into the 
contracting procedures whether in fact that is true. We think 
that it will be.
    Mr. Price. Thank you.
    Chairman Radanovich. Mr. Garden, in Mr. Vreeman's contract 
with the National Park Service, is there any right to sue for 
breach of contract or anything?
    Mr. Garden. No, there is no specific clause in the contract 
for that. I do know that National Park Service Manual 48 did at 
one point refer to bringing claims through the Interior Board 
of Contract Appeals. However, that requires a disputes clause 
to be in the contract to do that, and that clause is not in 
Kings Canyon's contract. I also note that National Park Service 
48 is no longer valid. They pulled that recently.
    Chairman Radanovich. Any other questions, Mr. Gutknecht?
    Mr. Gutknecht. Thank you, Mr. Chairman.
    Let me come back to a couple of points. I think it is great 
that you are doing these surveys, but next week I am going to 
go fishing, and I am going to stay in a cabin. I have been 
going to this place since I was 6 months old. When we first 
started going to this particular resort, the cabins were very, 
very basic. They had outdoor plumbing, and they have gradually 
improved them, and now they are too nice, and so we like a 
little bit of the outdoor experience. Your level of 
satisfaction is largely dependent on your level of expectation, 
and as you do this questionnaire you ought to allow the GAO to 
write the survey.
    Here is a question that I want to ask. In terms of the 
facilities that we see here, who originally was responsible for 
building those facilities and who was responsible for 
maintaining them?
    Ms. Finnerty. Again, that may be different in different 
parks. When they enter into a concession contract, part of the 
contract has a maintenance agreement and deals with use and 
occupancy of the buildings.
    Mr. Gutknecht. But, in general, who built the lodging 
facilities at the parks? Were they built by private sector?
    Ms. Finnerty. In general, government.
    Mr. Gutknecht. In general, they were built by the 
taxpayers. There is a difference. If the consumer realized when 
they checked into these facilities that, A, they were built 
with taxpayer money; and, B, this is a big business, somehow if 
there was some disclosure in that questionnaire I think you 
would get a lower level of satisfaction. So I hope when we do 
these questionnaires there is truth in advertising in terms of 
how much we put into it.
    In fact, in fairness, at every one of the facilities if you 
are going to ask people whether they are satisfied you ought to 
tell them the American taxpayers invested $5.3 million building 
this particular facility. We also invest X amount of dollars 
every year in keeping it maintained. Now against that 
backdrop--and you paid $82 a night to stay here; how satisfied 
are you now? I think you would get a much different level.
    More importantly, if you disclose and people are satisfied, 
that is great. That is what we want. We want satisfied 
customers. But I think we have to let people know the truth 
about how much we have already invested in many of these 
facilities. And I think, frankly, my own sense is, and we can 
get to the bottom of this, people would be shocked if they knew 
how much the American taxpayers had already paid for these 
facilities. I also have this instinctive belief that, wherever 
possible, concessionaires try to get the taxpayers to pay for 
the maintenance as well one way or the other.
    Finally, I just hope--and this is just a suggestion because 
in some respects I hope we don't have to have you folks back 
next year, but, if we do, I hope you or Ms. Orlando will not be 
coming forward and saying, I have not seen these facilities. I 
hope there will be an effort by the department to make certain 
that one or both of you get out and visit most of these 
facilities and hold the superintendents more accountable and 
remind them how much we have already invested in the facilities 
and that we owe it to the American taxpayers to take good care 
of them.
    I would hope, as you prepare the questionnaires for next 
year, you give people complete disclosure; B, that there is a 
real commitment by Ms. Orlando and the entire department to 
hold people accountable for these facilities.
    That is my last word. I yield back the balance of my time.
    Chairman Radanovich. Mr. Price, do you have one last 
question?
    Mr. Price. On Mr. Gutknecht's point about how a 
questionnaire might be designed, let me just say I am not a 
professional designer of questionnaires, but it does strike me 
that a questionnaire of the sort you describe would be sending 
a fairly mixed message. We have spent X million dollars and you 
spent the night here, now how do you feel about that? I am not 
sure that you would get a more straightforward answer than if 
you simply said, did you have a good night's stay?
    Anyway, it is, of course, important for people to 
understand where their tax dollars have gone. For us to make 
certain that they are getting good value and asking them how 
they feel about it is surely one way to do that.
    Mr. Hill and Ms. Finnerty, you might both want to respond 
to this. It is a more general kind of question, but I wonder if 
we have really said all there is to be said about the 
centralized versus decentralized model of how all of this ought 
to work.
    I take it that an implication of the GAO study is that Park 
Service operations are decentralized to their detriment, that 
there is a lack of standardization, there is a lack of 
accountability, there is a kind of sporadic quality to the way 
that these operations go, and somehow we would be better served 
if there was a centralized bureaucracy or system that was 
somehow imposing a set of standards across the whole system or 
at least monitoring across the whole system. I don't know if 
that is a fair statement or not, but often there are some 
advantages and disadvantages associated with that kind of 
central management and that kind of top-down structure. And I 
don't know how far you are taking that recommendation, but I 
would appreciate you and Ms. Finnerty reflecting on it.
    Are there advantages to this decentralized structure? 
Obviously, there are some individual facilities that haven't 
had the attention that they should have had. I think everyone 
agrees to that. Is the case for more centralized operations? Or 
are we overlooking some possible benefits of a looser and more 
decentralized and diverse kind of organizational structure?
    Mr. Hill. Mr. Price, if I may respond, we are not 
advocating centralized operations. There are 379 parks. Each of 
them is unique. It has to be done in a decentralized way. The 
park superintendent knows what is going on at the park, knows 
the community and the surrounding area, knows the problems and 
concerns and the issues that need to be dealt with in operating 
that particular park.
    What we are talking about is centralized oversight from the 
agency level in terms of their overall programmatic goal. If a 
programmatic goal is to have a concessions program, facilities 
that meet nationwide standards, programmatic standards, you 
want to have somebody at the central office at headquarters or 
certainly down at the regional office level providing periodic 
inspections and oversight to make sure that the program goals 
and standards are being carried out consistently.
    The one recommendation that we made dealing with a formal 
inspection program I relate back to comparing it to private 
industry. If you have a private motel chain like a Holiday Inn 
or somebody who has franchises across the country, they have 
inspection teams that go out to make sure that each of those 
franchises are meeting certain minimum standards that the 
Holiday Inn or whatever facilities has to meet. If those 
standards are not met, they take their name off of that 
particular facility, and they are not part of that chain any 
more.
    We have a nationwide park system, and we want that park 
system to meet certain standards, and they deal with safety 
standards, health standards--in this particular case, lodging 
conditions standards. Someone at the regional or central office 
I think needs to get on top of it to determine what are the 
conditions of these lodging facilities in our parks. And if 
there are problems, let's deal with them and get these 
facilities up to the standard.
    Mr. Price. Ms. Finnerty, do you have any comment on that 
issue of organizational structure?
    Ms. Finnerty. Yes, I would agree with Mr. Hill's 
assessment. I don't think that the answer is more 
centralization. I actually think it would be very difficult to 
have that work with the system the way that it is structured in 
all of the parks.
    Having said that, I think we in the Service, for this 
program and others, need to do a better job at the top setting 
priorities that are important and goals and objectives to be 
accomplished; and then that needs to be conveyed down to 
regional directors to ensure that the accountability is there.
    I think we do need to standardize our procedures on this 
program so that we are looking at the same things. I think we 
need to continue to work on gathering baseline information and 
baseline data so that we can answer questions about what is 
going on on a system-wide basis. I think those things can be 
done even within a decentralized organization, and we are 
working on it, and the director is committed to trying to 
improve some of these systems that currently are fragmented and 
are not nearly as consistent as they need to be.
    I think that is the challenge that we face. I think it is 
better systems in place, better accountability and agreement on 
objectives and goals and things that are important. All of 
these people have enormous workloads and a lot of issues to 
deal with, and we have to decide which of those are perhaps 
more important than others.
    Mr. Price. Thank you.
    Chairman Radanovich. Thank you, lady and gentlemen, for the 
excellent testimony.
    This concludes this hearing, and I do appreciate your 
participation. Thank you.
    [Whereupon, at 3:39 p.m., the Task Force was adjourned.]


 Department of Energy Management Practices: Uncertainties at Savannah, 
              Paducah, and the National Ignition Facility

                              ----------                              


                        WEDNESDAY, JULY 12, 2000

                  House of Representatives,
                           Committee on the Budget,
           Task Force on Natural Resources and Environment,
                                                    Washington, DC.
    The Task Force met, pursuant to call, at 2 p.m. in room 
210, Cannon House Office Building, Hon. George Radanovich 
(chairman of the Task Force) presiding.
    Mr. Radanovich. Good afternoon and welcome to the Budget 
Committee Task Force on Natural Resources and the Environment. 
Today our hearing is on the Department of Energy management 
practices, and I welcome everybody here, including our guests. 
Our guests today are Dr. Carolyn L. Huntoon--and thank you, 
Carolyn, for coming--who is the Assistant Secretary for 
Environmental Management of the Department of Energy, and 
Brigadier General Thomas Gioconda--welcome, General--United 
States Air Force, Acting Deputy Administrator for Defense 
Programs at the National Nuclear Security Administration of the 
Department of Energy.
    I will go ahead and read my opening statement and then 
please ask you to do the same, and the course of this hearing 
will be that plus questions that I or others who will arrive 
during this time might have of you, and then our second panel 
today will be a representative from the General Accounting 
Office. So welcome and thank you for taking time out of your 
day to come to the Hill and testify.
    Today we will be reviewing reports from the General 
Accounting Office that touch on disturbing trends within the 
Department of Energy. Mismanagement, cost overruns and project 
delays are among the recurring themes throughout these reports. 
We have witnesses with us today from the Department of Energy 
who will speak to these problems and who will hopefully share 
some meaningful plans they have to make improvements.
    In addition to the GAO reports, this review was spurred by 
last year's bipartisan approval of a House Appropriations 
Committee report that characterized the DOE's programs as 
models of mismanagement and waste. DOE's past record and the 
costs associated with some of the Department's projects that we 
will be discussing today suggest that congressional oversight 
of the Department is an appropriate, necessary role of this 
committee. The budget impact of these projects alone is 
significant. There is no way to know what costs await us at 
other DOE projects, making it imperative that we are satisfied 
that the Department is doing everything in its power to make 
meaningful changes to ensure cost controls and accountability.
    Our first witness today will be the Assistant Secretary for 
Environmental Management, Carolyn Huntoon, who will discuss the 
Savannah River Project and the Paducah cleanup plan. The 
Savannah River In-Tank Precipitation, or ITP, Project is 
designed to process high levels of liquid radioactive waste at 
the Savannah River nuclear facility in South Carolina. It was 
abandoned by the DOE last year after years of criticisms that 
ITP would not work. The DOE has gone back to the drawing board 
in search of a replacement.
    The Paducah site cleanup plan lays out the blueprint for 
cleaning up hazardous and nuclear waste at the Paducah, 
Kentucky site. It is projected to cost $1.3 billion and be 
completed by 2010. But the GAO's office say the estimates fail 
to account for numerous factors that would lead to added costs 
and the DOE will have difficulty meeting its 2010 date.
    Then we will hear from Brigadier General Thomas F. 
Gioconda, who is the Acting Deputy Administrator for Defense 
Programs at the National Nuclear Security Administration within 
the DOE. He will discuss the status of corrective actions at 
the National Ignition Facility, or the NIF, a super laser 
project under construction at the Lawrence Livermore Laboratory 
in California. It is intended to simulate nuclear weapons 
explosions. In June 1999 Secretary Richardson declared the 
project on time and on budget. However, the DOE recently 
admitted that the project is more than a billion dollars over 
budget and will be 4 years late in beginning operation.
    On our second panel we will hear from Ms. Gary Jones, 
Associate Director for Energy and Science Issues at the GAO, 
who will testify about her agency's reports on the Savannah 
project and the cleanup plan at Paducah.
    The Department has taken steps to address concerns raised 
by the GAO and others in each of these three projects. 
Nonetheless, many of us on this committee are skeptical when it 
comes to the DOE's explanation of how problems and flaws in 
major projects will be resolved and managed effectively in the 
future. We are skeptical because of the Department's history of 
poor performance in managing projects and overseeing 
contractors.
    Almost since its creation in 1977 the U.S. Department of 
Energy has been plagued by chronic management problems, 
countless reports by the GAO's office and the Inspector General 
and others who have repeatedly identified examples of 
mismanagement in the Department's operations, including poor 
project management, inadequate oversight of contractors, 
inadequately trained employees, and the lack of accountability 
at both the Department and among the contractors.
    Just this past February Ms. Jones of the GAO had this to 
say about DOE's operations: DOE's history of failures in 
managing major projects that are critical to its mission have 
resulted in significant cost overruns, scheduled delays and 
failure to complete and operate those projects. She goes on to 
say that past studies have identified basic flaws at DOE. The 
complicated, dysfunctional organizational structure and unclear 
lines of authority throughout DOE have long resulted in weak 
oversight of contractors and poor accountability for program 
plans. For years DOE has failed to respond to our report that 
has highlighted these weaknesses. Indeed, an internal DOE study 
reflected the concerns about problems at the DOE. In 1997, a 
DOE internal study noted a lack of clarity, inconsistency and 
variability in the relationship between headquarters management 
and field organizations. This is particularly true in 
situations with several headquarters programs fund activities 
at laboratories.
    In addition, the President's own Foreign Intelligence 
Advisory Board, headed by Senator Warren Rudman, expressed 
concerns about the DOE's ability to address such problems. In 
June 1999, in the wake of the Wen Ho Lee spy case, the Board 
said it was extremely skeptical that any reform, no matter how 
well-intentioned, well-designed and effectively applied, will 
gain more than a toehold at the DOE given its labyrinthine 
management structure, fractious and arrogant culture and the 
fast approaching reality of another transition in the DOE 
leadership.
    On that resounding note I will simply say we look forward 
to the testimony of the panels, we are anxious to hear about 
the DOE's efforts to address these problems, and we anticipate 
a future full dialogue. Thank you very much again for joining 
us, and I would like to invite other members, Mr. Price, to 
give opening statements and also like to state too that anybody 
who is not here or anybody who would like to submit a written 
statement I would ask unanimous consent that they be given 5 
days to do so.
    With no objection, Mr. Price.
    Mr. Price. Thank you, Mr. Chairman. I have no formal 
opening statement except to welcome the witnesses and to say 
that we do look forward to their testimony, to getting a 
balanced and objective view of some of these allegations that 
the chairman has referred to, and also an honest account of the 
Department's efforts to address these questions and concerns. I 
am sure you will bring that to us and in that spirit I await 
your testimony.
    Thank you.
    Mr. Radanovich. Thank you, Mr. Price. Ms. Huntoon, again 
welcome and please feel free to give your testimony at this 
time. I see no need to do buttons and whistles, so just please 
be welcome to give your testimony.

 STATEMENTS OF DR. CAROLYN L. HUNTOON, ASSISTANT SECRETARY FOR 
ENVIRONMENTAL MANAGEMENT, DEPARTMENT OF ENERGY; AND BRIG. GEN. 
THOMAS F. GIOCONDA, U.S. AIR FORCE, ACTING DEPUTY ADMINISTRATOR 
FOR DEFENSE PROGRAMS, NATIONAL NUCLEAR SECURITY ADMINISTRATION, 
                      DEPARTMENT OF ENERGY

              STATEMENT OF DR. CAROLYN L. HUNTOON

    Dr. Huntoon. Thank you, Mr. Chairman. I appreciate the 
opportunity to testify before you today. The Department is 
making substantial progress in cleaning up the legacy of 
radioactive and hazardous contamination at over 100 sites 
across the Nation left by nuclear weapon production and energy 
research. We are reducing serious risk, as well as accelerating 
and finishing cleanup at sites across the country. We are 
safely storing and safeguarding excess nuclear materials and 
reducing the long material cost of these programs.
    To protect the health and safety of our workers we have 
established safety as our top priority. To get the most work 
done with our budgetary resources we have incorporated state-
of-the-art private sector contracting and management practices 
into our operations. To make the most use of our unique 
facilities and capabilities we are integrating the use of our 
resources across the DOE complex. To reduce cost and schedules 
we are investing in science and development of new 
technologies. We are working with regulators and stakeholders 
to address their concerns and find mutually acceptable cleanup 
solutions. And, we are working with Congress to secure the 
funding that we need to meet our compliance obligations and our 
closure goals.
    Our programs at Paducah and the Savannah River site provide 
good examples of both of our successes to date and the 
challenges that remain. At each of these sites and other sites 
across the complex we have made a lot of progress. In the past 
several years, we also faced technical, managerial, budgetary 
and regulatory challenges to completing the cleanup task. These 
challenges reflect the complex and extensive nature of the 
hazardous radioactive contamination and materials for which we 
are responsible.
    At the Paducah site in Kentucky, the EM program is 
responsible for addressing serious problems, including soil and 
groundwater contamination and radioactive hazardous chemicals, 
surface water contamination in ditches, creeks, lagoons, 
approximately 65,000 tons of scrap metal stored on-site, 12 
burial grounds containing a variety of radioactive and 
hazardous waste, 52,000 drums of low level and hazardous 
chemicals and two contaminated process plants that have been 
shut down.
    To date we have significantly reduced risks while ensuring 
the safety of workers, the general public and the protection of 
the environment. For example, we have addressed the risk 
proposed by contamination of off-site residential wells from 
contaminated groundwater by supplying municipal water to over 
100 residences and businesses. We have installed pump and 
treatment systems in groundwater plumes to contain the spread 
of contamination. We have eliminated immediate risk and 
contamination hot spots. We began the removal of Drum Mountain 
last month and expect to complete removal by the end of this 
year.
    To accelerate our cleanup at Paducah, we have significantly 
increased the funding for cleanup in fiscal year 2000; our 2001 
request of $78 million is more than twice the funding level for 
fiscal year 1999. We are working with the Commonwealth of 
Kentucky and the Environmental Protection Agency as well as 
with workers and local citizens to accelerate the cleanup. 
These efforts have helped us develop a new baseline with the 
completion date of 2010. The GAO report depicts a very real 
challenge the Department faces at Paducah. The Department 
agrees that these factors could affect our ability to meet the 
cost and schedules we have laid out. However, the Paducah site 
cleanup plan addresses the cleanup that is large in scope, 
technically complex, and spans a 10-year period and therefore 
has inherent uncertainty.
    As recommended by GAO, the Department is preparing an 
integrated plan for the Paducah site that will cover all 
activities at the site, including the EM cleanup and the Office 
of Nuclear Energy materials management responsibilities. The 
plan will provide an integrated life cycle baseline describing 
the cost, scope and schedule for completing all of the work at 
Paducah. We expect to begin implementing the plan in fiscal 
year 2001.
    We do not support the GAO recommendation to consolidate all 
DOE efforts at the site into the EM program. The Office of 
Nuclear Energy has a unique capability to perform its mission 
at the site. We are also concerned that the consolidation will 
lead to reduced funding for the cleanup portion of the DOE 
program. The Department appreciates congressional support for 
the increased funding in fiscal year 2000. We need your 
continued support for the critical funding increases for fiscal 
year 2001 that are now before you.
    The Savannah River site has approximately 34 million 
gallons of high-level waste that requires permanent isolation. 
The highly radioactive portion of this waste will be 
transformed into a more stable glass form using a process 
called vitrification for ultimate disposal. The remaining low 
activity portion will be stabilized and managed as low level 
waste. Separating out the highly radioactive element in the 
waste will significantly reduce the volume of waste that is 
needed to be vitrified and therefore reduces processes in 
disposal costs by billions of dollars.
    In January 1998, after an in-depth technical assessment of 
the problem and expert reviews, the Department determined that 
the In-Tank Precipitation technology being developed to remove 
cesium from the high level waste salt stream could not safely 
meet the safety and production requirements. Since then our 
efforts have been focused on identifying and evaluating 
alternative technologies to replace the ITP process. The 
Department's goal is to ensure the technology selected will be 
successful.
    In response to concerns raised by the GAO and based on our 
own experiences with ITP, the Department has established a 
rigorous research evaluation process to identify and evaluate 
potential technologies. The process that we are now undertaking 
ensures sufficient research and development is completed before 
a selection is made. It brings internal and external expertise 
into the process, including the National Academy of Sciences. 
It provides for effective management and oversight of the 
project and close involvement by headquarters and senior 
management.
    Early in 1999, the Secretary decided to remove the contract 
to Westinghouse from the selection process for the technology 
and to seek a contractor to design and construct the selected 
technology through open competition. Based on our own analysis 
and recommendations from the National Academy of Sciences, the 
Department recently concluded that more research is needed 
before we can select preferred technology. We now anticipate 
identifying that technology in June of 2001. This approach will 
give us the confidence that we are selecting technology that 
will work as expected.
    In the meantime we will continue to make progress in the 
high-level waste program. We continue to produce canisters of 
vitrified waste at the current production rate of 200 canisters 
per year. We will produce sludge-only canisters through 2010 
without increasing the total number of canisters produced. We 
will continue to meet our commitments to close high level waste 
tanks. We have completed the removal and closure of two tanks 
on the Savannah River site and are on track to close another 
two tanks ahead of regulatory commitments.
    The Department has made significant progress in managing 
and cleanup extensive legacy of hazardous and radioactive 
contamination from nuclear weapons production. Nonetheless, 
there is a long way to go. We face unprecedented technical, 
financial, regulatory, and managerial challenges, but we 
believe we have established a firm foundation that will enable 
the Department to tackle these problems as they arise. We will 
continue to work with Congress on this important endeavor.
    Thank you.
    [The prepared statement of Dr. Carolyn Huntoon follows:]

  Prepared Statement of Dr. Carolyn Huntoon, Assistant Secretary for 
          Environmental Management, U.S. Department of Energy

    Mr. Chairman and members of the Task Force, I appreciate the 
opportunity to testify about the Department of Energy's (DOE) 
Environmental Management (EM) program at the Paducah Gaseous Diffusion 
Plant in Kentucky and the Salt Processing Project (SPP) at the Savannah 
River Site in South Carolina.
    Overall, the Department is making substantial progress in cleaning 
up the legacy of radioactive and hazardous contamination at over 100 
sites across the nation left from the nuclear weapons production 
process and nuclear energy research. We are reducing the most serious 
risks posed by this contamination, accelerating and finishing cleanup 
at sites across the country, safely storing and safeguarding excess 
materials that can be used in nuclear weapons, and reducing the long-
term costs of the program.
    To protect the health and safety of our workers, we have 
established safety as our top priority. To get the most work done with 
our budgetary resources, we have incorporated state-of-the-art private 
sector contracting and management practices into our operations. To 
make the most use of our unique facilities and capabilities, we are 
integrating the use of our resources across the DOE complex. To reduce 
costs and schedules, we are investing in science and developing new 
technologies. We are working with regulators and stakeholders to 
address concerns and find acceptable cleanup solutions. And we are 
working with Congress to secure the funding that we need to meet our 
compliance obligations and reach our closure goals.
    Our programs at the Paducah and Savannah River sites provide good 
examples of both our successes to date and the challenges that remain. 
At each of these sites, and others across the complex, we have made a 
lot of progress in the past several years, but also face technical, 
managerial, budgetary, and regulatory challenges to the cleanup and 
completion of our mission. These uncertainties and challenges reflect 
the complex and extensive nature of the hazardous and radioactive 
contamination and materials for which we are responsible. Before 
discussing our approach to cleanup at Paducah and the Salt Processing 
Project, I would like to provide some background on our program and 
these issues.

                  The Environmental Management Program

Mission: Cleanup of the Environmental Legacy of the Cold War

    The EM program is responsible for managing and cleaning up the 
environmental legacy of the nation's nuclear weapons production program 
and government-sponsored nuclear energy research. The scope and 
challenge of this task is enormous, involving managing large volumes of 
nuclear wastes, safeguarding materials that could be used in nuclear 
weapons, and remediating extensive surface and groundwater 
contamination. The EM program is responsible for:
     remediating 1.7 trillion gallons of contaminated ground 
water, an amount equal to approximately four times the daily U.S. water 
consumption;
     remediating 40 million cubic meters of contaminated soil 
and debris, enough to fill approximately 17 professional sports 
stadiums;
     safely storing and guarding more than 18 metric tons of 
weapons-usable plutonium, enough for thousands of nuclear weapons;
     managing over 2,000 tons of radioactive spent nuclear 
fuel, some of which is corroding;
     storing, treating, and disposing of radioactive and 
hazardous waste, including over 160,000 cubic meters currently in 
storage and over 100 million gallons of liquid, high-level radioactive 
waste;
     deactivating and/or decommissioning about 4,000 facilities 
that are no longer needed to support DOE missions;
     implementing critical nuclear non-proliferation programs 
for accepting and safely managing spent nuclear fuel from foreign 
research reactors that contain weapons-usable highly enriched uranium; 
and
     providing long-term care and monitoring, or stewardship, 
for potentially hundreds of years at an estimated 109 sites following 
clean up.

Accomplishments

    Some of the major program accomplishments include:
     Active cleanup is complete at 69 of 113 sites as of the 
start of fiscal year (FY) 2000.
     The Waste Isolation Pilot Plant (WIPP) is open and 
disposing transuranic waste. To date, WIPP has received 61 shipments, 
or 420 cubic meters, of transuranic waste from Los Alamos National 
Laboratory, Rocky Flats, and Idaho National Engineering and 
Environmental Laboratory (INEEL). The first shipment from the Hanford 
site will arrive this week.
     In FY 1999 alone, we disposed of 49,000 cubic meters of 
low-level waste, 14,000 cubic meters of mixed low level waste, and 282 
cubic meters of transuranic waste at disposal facilities at DOE sites 
and at commercial disposal facilities.
     Cleanup of all 22 large uranium mill tailings sites is 
complete, as well as 5,300 ``vicinity properties,'' including 
elementary schools and homes.
     At Rocky Flats, we continue to work toward meeting our 
2006 closure goal, including removing all plutonium pits from the site, 
beginning shipments of highly-enriched uranium to other sites, and 
demolishing a major plutonium research facility.
     At INEEL, we completed the new dry storage facility for 
spent nuclear fuel and began transferring Three Mile Island spent 
nuclear fuel from wet storage to the safer new facility.
     At the Hanford Site, we restarted plutonium stabilization 
activities to reduce the risks posed by unstabilized plutonium 
materials; we have resolved three of the four high-priority safety 
issues for the high-level waste tanks, such as the generation of high 
heat in one tank and a rise in the surface level in another; and we 
have removed liquids from 123 of the 149 old, single-shell tanks.
     At the Savannah River Site, by the end of FY 2001 we will 
have completed approximately one-third of the planned shipments of 
spent nuclear fuel containing uranium originally enriched in the United 
States from foreign research reactors around the world. This program 
reduces the threat of nuclear proliferation by ensuring enriched 
uranium will not be used to make nuclear weapons.
     At the Savannah River Site in South Carolina and West 
Valley site in New York, we are operating the nation's only high-level 
waste vitrification facilities for stabilizing high-level liquid wastes 
stored in underground tanks. We have produced over 890 canisters of 
vitrified glass since the Savannah River facility began operating in 
1996, and we will complete the vitrification of all 600,000 gallons of 
liquid high-level waste at West Valley in FY 2001 and begin 
deactivation of the facility.
     We continue to use new technologies. During FY 1999, DOE 
sites used new technologies 218 times in cleanup activities, 129 of 
which were used for the first time at a site. Since the inception of 
the EM Science and Technology program, we have seen over 450 
deployments at DOE sites of over 200 new cleanup technologies. The 
deployment of these technologies is yielding significant benefits to 
the cleanup of the DOE complex, including: more efficient removal of 
highly-radioactive tank waste; containing and treating subsurface 
contamination; enhancing in situ bioremediation of organic 
contaminants; treatment of mixed low-level waste; and better methods to 
deactivate, decontaminate and dismantle facilities while ensuring 
worker safety and minimizing risk to the surrounding environment.

Program Management: Principles and Practices

    The actual tasks of remediating contamination and storing, 
treating, and disposing of wastes are performed at the sites where the 
contamination and wastes are located. The role of Headquarters is to 
provide program guidance and management as to how this work will be 
conducted. We have established several management principles to guide 
the program:
     Safety first;
     Reduce risks;
     Meet our commitments;
     Accelerate site cleanup and project completion;
     Strengthen project management;
     Integrate nuclear waste and materials management and 
operations across the DOE complex;
     Build public confidence and involve stakeholders in 
cleanup decisions;
     Develop an effective long-term stewardship program for 
post-cleanup protection;
     Apply the best science and technology to solve technical 
problems and reduce costs.
    A brief description of each of these principles is contained in the 
Appendix to this statement.

                           Challenges Remain
    Despite our progress, there is a long way to go. Our larger and 
more complex sites will take decades to clean up. The General 
Accounting Office (GAO) has reported on the uncertainties and 
challenges facing the Department's cleanup of the Paducah site and on 
the difficulties in developing a technology for the processing of 
radioactive salts at the Savannah River Site. We certainly agree that 
we face uncertainties and other challenges at these sites. These 
uncertainties and challenges reflect the nature of our mission. There 
are similar complex, technical, regulatory, financial, and managerial 
challenges at other sites where we also face unique mixtures of 
hazardous and radioactive wastes that must be safely isolated from our 
workers and the human environment for many years. However, we believe 
we are addressing these challenges in a timely manner. I would now like 
to turn to each of these issues.
    cleanup of the gaseous diffusion plant site in paducah, kentucky
Cleanup Scope and Progress

    At Paducah, EM is responsible for the remediation of environmental 
contamination, management and disposal of ``legacy'' waste generated by 
decades of uranium enrichment operations, and disposition of surplus 
materials and facilities no longer needed for the Department's mission. 
Specifically, at Paducah EM has responsibility for:
     groundwater contaminated with radioactive and hazardous 
chemicals, primarily trichloroethene (TCE) and technetium-99, which has 
contaminated private residential wells and continues to migrate off-
site;
     surface water contamination in surrounding ditches, 
creeks, outfalls and lagoons, and about 65,000 tons of scrap metal 
stored on-site that is the main source of the contamination;
     surface soils on- and off-site that have been contaminated 
by water runoff, spills and releases of hazardous and radioactive 
substances, and leakages from buried waste, such as polychlorinated 
biphenyls (PCBs), radionuclides, volatile organic compounds, and 
metals;
     twelve burial grounds containing a variety of radioactive 
and hazardous wastes;
     52,000 drums of low-level and/or hazardous chemical waste 
stored on-site that must be characterized and dispositioned; and
     two contaminated process plants, including ancillary 
buildings associated with the plants, that have been shut down: the C-
410 Feed Materials Plant and the C-340 Metal Reduction Plant.
    Our cleanup strategy for tackling these complex problems is based 
on the risks they present to the public, workers and the environment. 
To date we have reduced risks to workers and the public and developed a 
sound technical foundation for the next stage of cleanup. For example:
     We addressed the risks posed by the contamination of off-
site residential wells from contaminated groundwater. We funded the 
extension of 12 miles of municipal water supply line to over 100 
residences and businesses whose wells were contaminated. We are also 
paying their water bills.
     We identified the areas of the plumes with the highest 
concentrations of contaminants and installed groundwater pump and treat 
systems in each plume to contain the spread and treat the higher 
contaminant concentrations. Monitoring data show that these systems 
have met their objectives. We routinely sample groundwater using a 
monitoring network of some 165 residential and other wells installed to 
track contaminant migration.
     We eliminated immediate risks and contamination ``hot 
spots'' and other suspected sources of off-site contamination. Actions 
range from removing contaminated soil from areas with high 
concentrations of contaminants to reducing potential contamination 
associated with the North-South Diversion Ditch, where the highest 
levels of plutonium and uranium have been found.
    Like any other complex cleanup project, much of our initial work 
involved working with our environmental regulators to characterize the 
nature and extent of the contamination at the site so that we could 
identify and prioritize risk reducing activities and devise sound 
technical cleanup solutions. While less dramatic than on-the-ground 
work that reduces contamination, characterization is a critical step in 
cleanup and is required under an enforceable cleanup agreement. Because 
of the hazardous nature of the contaminants and the processes involved, 
characterization is also a critical step in protecting the workers who 
are doing the cleanup.
    As a result of the health and safety investigation conducted in 
August 1999 by DOE's Office of Environment, Safety and Health (EH), the 
Department also prepared a corrective action plan containing 77 
specific actions to address the findings in the report. More than 60 
percent of these actions have been completed. We have made improvements 
to our radiation protection and workers' safety programs and have 
strengthened DOE oversight of the contractor.
    We have also improved the pace and effectiveness of environmental 
cleanup of the Paducah site, a key area of concern in the EH 
investigation. In brief, we have:
     Sought increased funding. In FY 2000 the Department 
requested and received a $6 million funding increase and transferred 
more than $10 million in additional funds to Paducah. In addition, we 
sought an additional $8 million for the Paducah cleanup in the 
President's supplemental request for FY 2000; Congress recently passed 
legislation that would provide the supplemental funds for Paducah 
cleanup. Our FY 2001 request of $78 million is almost $16 million above 
the current FY 2000 appropriation level, including the $8 million in 
supplemental funds.
     Established a Tri-Party Working Group with State and EPA 
regulators to evaluate the site strategies and priorities and identify 
ways to accelerate cleanup. We have identified early actions to remove 
contamination sources, are making progress in streamlining the formal 
regulatory process, and are continuing to work to resolve issues 
related to PCB cleanup levels and future land use designations.
     Accelerated cleanup activities. With the additional funds 
provided in FY 2000, we have accelerated the removal and disposal of 
``Drum Mountain,'' a large scrap pile containing thousands of drums, 
which is a suspected source of contamination of the Big and Little 
Bayou Creeks from surface run-off. On June 23, 2000, the subcontractor 
began to remove the drums. We are on schedule to remove Drum Mountain 
by the end of this fiscal year and complete disposal of the packaged 
waste in December 2000, a year earlier than previously planned. In 
addition, the Department has developed a life-cycle baseline that 
details the schedule, scope, and estimated cost to accelerate overall 
site completion by 2 years to 2010. The life-cycle estimates associated 
with this baseline range from about $880 million to $1.1 billion 
depending primarily on whether waste generated from the cleanup can be 
disposed of on-site or is required to be disposed of at an off-site 
facility. We will continue working with the Tri-Party Working Group to 
refine this baseline.
     Continued cleanup progress. We began operating the 
``Lasagna'' technology in December 1999 to treat shallow soils 
contaminated with TCE in the former Cylinder Drop Test Area, a major 
source of TCE contamination in groundwater. Named for the layered 
``treatment zones'' in the subsurface soil, the Lasagna process 
generates an electric field and uses chemical means to destroy the TCE. 
We expect to complete TCE removal in the Test Area in FY 2001.
    Once Drum Mountain work is complete, we plan to begin removing 
other scrap metals at the site, starting early in FY 2001. In 
preparation for this, we have replaced silt fences that control surface 
water runoff and repaired bank erosion control measures that retard 
erosion to creeks and ditches. We will soon start construction of the 
pilot-scale unit at the Southwest Plume to test the suitability of 
permeable treatment zone technology for the Paducah site and provide 
data for full-scale operations. We have completed the workplan for the 
treatability study and about 90 percent of the design and technical 
specifications for the pilot facility. We expect to complete 
construction by the end of this fiscal year.

Challenges at Paducah

    The GAO report, ``Nuclear Waste Cleanup: DOE's Paducah Plan Faces 
Uncertainties and Excludes Costly Cleanup Activities,'' depicts the 
very real challenges the Department faces in keeping this complex 
cleanup within the cost and timeframes laid out in the current cleanup 
plan. The report identifies uncertainties and other factors that could 
increase costs and cause delays. These are:
     uncertainties about the nature, extent and sources of 
contamination;
     uncertainties about whether the technologies being pursued 
to address contamination, some of which are new and innovative 
technologies, will be successful;
     the need to reach agreements with regulators and 
stakeholders on aspects of the cleanup, such as land use and cleanup 
levels, that will affect what cleanup approaches are taken;
     future funding levels; and
     other areas at the site, outside of the current scope of 
the cleanup program, that are not included in the cleanup plan, but 
that the Department will need to address.
    The uncertainties that GAO raises are valid. It is clear that the 
Paducah site cleanup plan is large in scope, technically complex, and 
spans a 10-year period. It is also clear that such a plan, by its 
scope, duration and the nature of the complicated site conditions it 
addresses, faces inherent uncertainties.
    It should be emphasized, however, that the same uncertainties faced 
at Paducah exist at many of the technically complex projects EM 
manages--and many private sector cleanups as well. The Department has 
specifically acknowledged this elsewhere, most recently in the ``Status 
Report on Paths to Closure'' (March 2000):

          ``The future costs of many complex environmental management 
        and remediation programs are difficult to quantify with 
        precision, particularly when many projects remain in a planning 
        stage. As project planning progresses, and more is known about 
        what will be required to implement a project, cost estimates, 
        and consequently schedules, may significantly increase or 
        decrease. Management studies have shown that complex 
        environmental programs, along with other first-of-a-kind 
        projects, have some of the greatest variability in life-cycle 
        cost estimates.''

    The question, therefore, is not whether we face uncertainties in 
meeting our goals, but whether we are managing those uncertainties 
wisely and effectively. As previously explained, the EM program seeks 
to manage the uncertainties and minimize their impacts--at Paducah and 
at other sites across the complex--in a number of ways. We have 
invested in science and research to develop new technologies to 
characterize and remediate contamination and to develop more effective 
and cost-efficient technologies than traditional approaches. We are 
working with regulators and stakeholders to address concerns and find 
acceptable cleanup solutions. We are working with Congress to secure 
the funding that we need to meet our compliance obligations and reach 
our closure goals. And we are integrating our cleanup and materials 
management efforts across DOE sites and programs to ensure that the 
Department performs these activities expeditiously and cost-
effectively. Let me address more specifically how we are managing the 
uncertainties the GAO report highlighted at Paducah.

Managing the Technical Challenges

    At all of our sites, we face uncertainties about the size and scope 
of the contamination. As previously noted, much of the early work at 
Paducah involved working with regulators to characterize and assess the 
contamination at the site to support cleanup decisions. From FY 1988 
through FY 1999, about $112 million, or almost 30 percent of the funds 
have supported characterization and assessment activities at Paducah.
    Such characterization work is necessary to devise sound technical 
solutions, prioritize work, and to protect the health and safety of the 
workers doing the cleanup work. The Department is increasingly pursuing 
a strategy that allows us to move forward with cleanup actions when we, 
and the regulatory agencies, believe there is sufficient information to 
take action, building flexibility into the process to help us deal with 
the unexpected. At Paducah, our characterization efforts continue. 
However, the Tri-Party Workgroup involving our regulators also has 
identified a number of early actions to eliminate potential sources and 
reduce contamination, including the removal of Drum Mountain. We will 
continue to work with this group to identify ways in which to 
accelerate the cleanup even more.
    The GAO report also raises legitimate concerns about the need to 
pursue effective technologies and technical strategies to address 
environmental contamination, specifically groundwater contamination and 
its sources. Trichloroethene (TCE), a widely-used degreasing solvent, 
is the most commonly occurring contaminant in groundwater across the 
country, and is notoriously difficult to extract from groundwater with 
conventional pump-and-treat technologies. While there are risks 
associated with the use of new and innovative technologies, we manage 
those risks by applying the best science and expertise to the problem--
and the risks of relying on conventional technologies that cannot 
effectively and efficiently solve the problem are greater. Since early 
1999, the Innovative Technology Remediation Demonstration (ITRD) 
program has been working with the Paducah site office to identify and 
demonstrate innovative technologies that can solve cleanup problems in 
a more efficient and less costly manner. The pilot-scale unit being 
developed to test the permeable treatment zone technology and the 
``Lasagna'' technology now in operation are products of this effort. In 
addition, I sent a Technology Deployment Assistance Team to the site in 
November 1999, which included experts from the Savannah River Site 
Technology Center and the national laboratories, to conduct a technical 
review of the groundwater contamination at Paducah and provide 
recommendations for expediting cleanup of the groundwater plumes. The 
Deployment Assistance Team validated the technologies and approaches 
recommended by the ITRD and supplemented ITRD recommendations for 
treatment of groundwater source terms and increased plume monitoring.
    Groundwater contamination at Paducah is one of the technical 
challenges across the DOE complex that our science and technology 
program is working to address. EM is investing in science and research 
to develop and deploy technologies for environmental problems that need 
new or more effective technological solutions. Our efforts are 
beginning to make real, on-the-ground contributions. Since the 
inception of this program, we have seen over 450 deployments at DOE 
sites of approximately 200 new technologies that were sponsored by EM's 
science and technology program. One of my priorities since becoming 
Assistant Secretary in EM has been, and will continue to be, to bring 
the best science and technology to bear on solving the cleanup 
challenges facing the Department.

Working Cooperatively to Resolve Regulatory Issues

    The Department has worked closely with State and Federal regulatory 
agencies and other stakeholders throughout the cleanup process. DOE 
conducts the cleanup pursuant to a three-party, enforceable agreement 
with the EPA and the Commonwealth of Kentucky under the Comprehensive 
Environmental Response, Compensation and Liability Act (CERCLA), 
similar to the regulatory agreements that direct cleanup at most of our 
sites. Through the process established by the agreement, the parties 
establish priorities, assess contamination, and determine cleanup 
remedies. In November 1999, in the wake of concerns raised by DOE's 
Office of Environment, Safety and Health investigation and others about 
the pace of cleanup at Paducah, the Tri-Party Working Group (made up of 
senior managers from DOE, the State and EPA) was formed to evaluate 
priorities and strategies and to identify ways to accelerate the 
cleanup. Staff that support the Tri-Party Working Group meet on a 
monthly basis and have reached general agreement on early actions which 
can be taken to accelerate cleanup completion by 2010, including work 
not previously included in the life-cycle baseline, such as 
decontaminating and decommissioning of two radiologically contaminated 
facilities and installing sedimentation basins at specific outfalls. In 
addition, the Tri-Party Working Group is considering another 
alternative proposed by the Department to further accelerate cleanup by 
disposing remediation waste in an on-site cell.
    While we may not have resolved all regulatory issues that could 
affect the cost and schedule of cleanup, the Department believes it has 
a solid and effective working relationship with our regulatory partners 
and has in place a process that will lead to mutually supported cleanup 
decisions.

Funding the Cleanup

    The Department is seeking significantly increased funding for the 
Paducah cleanup. The Congress recently approved the $8 million for 
cleanup of Paducah that the Administration included in its supplemental 
request for FY 2000. The funding request for FY 2001 of $78 million is 
more than double the FY 1999 appropriation and almost $16 million more 
than FY 2000.
    However, as GAO notes, ``[f]unding constraints have always been an 
issue, according to DOE, contractor and regulatory officials, and their 
recurrence could delay the project and add to its ultimate cost.'' 
Beginning in FY 1996, the Department saw its funding requests for the 
Uranium Enrichment Decontamination and Decommissioning (UE D&D) Fund--
the appropriation account that supports cleanup of the three uranium 
enrichment facilities--reduced and, consequently, less funds were 
available for cleanup at Paducah. From FY 1996 through FY 1999, the UE 
D&D Fund appropriations were reduced from the Administration request by 
approximately $10 million, $40 million,\1\ $18 million, and $57 million 
respectively, resulting in funds for Paducah reduced, for example, in 
FY 1999 by $20 million. The Department, with reduced appropriations, 
was required to adjust its cleanup activities and priorities 
accordingly.
---------------------------------------------------------------------------
    \1\ $10 million was later shifted to the UE D&D Fund in FY 1997 
through a reprogramming action.
---------------------------------------------------------------------------
    The $8 million that Congress provided pursuant to the supplemental 
request will support two important projects: first, removal of concrete 
rubble piles outside the plant fence that may have low levels of 
radiological contamination for ultimate disposal in the on-site 
landfill; and second, stabilization activities to reduce radiological 
risks associated with the C-410 Feed Materials Plant, one of the two 
surplus contaminated process buildings for which EM is responsible. 
These activities address EH concerns and also make use of the skilled 
workers who are subject to layoffs by United States Enrichment 
Corporation (USEC) beginning this month.
    For FY 2001, the Department has requested $78 million for the 
cleanup of Paducah. This funding level will enable us to continue 
accelerating our cleanup efforts. At this level, we will continue 
accelerating disposition of the remaining 57,500 tons of contaminated 
scrap metal stored in outside storage areas at a pace for completion by 
FY 2003, allowing characterization of the ground underneath the piles. 
We will also continue stabilization activities in the two shut down 
buildings; characterize and dispose of the remaining 9,000 drums of 
low-level radioactive waste, some of which are currently stored in 
deteriorating drums; and ship 2,000 drums of mixed waste to an off-site 
disposal facility. In addition, we will issue the record of decision 
for the final groundwater remedy and begin remedial design, accelerate 
the surface water investigation, and finalize the decision and begin 
remedial design for cleaning up the North-South Diversion Ditch.
    It is critical that Congress approve the full request so that the 
Paducah cleanup can proceed expeditiously and meet the 2010 completion 
date. In this regard I am very concerned about the recent House-passed 
FY 2001 Energy and Water Development Appropriations Bill that would 
consolidate the two uranium program funding accounts and reduce the 
total (from the requested level) by $43 million. This reduction would 
impact funding levels at three sites (Paducah, Portsmouth, and Oak 
Ridge) and would seriously impede our cleanup efforts at Paducah as 
well as the other sites. I urge this Committee to support restoration 
of this funding as the appropriations process moves forward.

Integrating Cleanup And Materials Disposition

    As it does at other operating sites in the DOE complex, EM shares 
responsibilities at the Paducah site with other Departmental programs. 
The Office of Nuclear Energy (NE) has on-going responsibility for 
management of materials, facilities, and support of the site 
infrastructure, or ``landlord'' responsibilities. This office, 
therefore, has responsibility for management of materials stored in 
USEC buildings in DOE Materials Storage Areas (DMSAs) for potential 
reuse by USEC. As these materials are evaluated by NE and USEC, the 
responsibility for any materials not needed by USEC would be 
transferred to EM. NE is also responsible for the management and 
conversion of the depleted uranium hexafluoride currently stored in 
cylinders into a more stable form--with the potential of commercial 
reuse of fluorine by the nuclear industry.
    In addition, USEC is responsible for maintaining facilities and 
managing waste generated by its operations. The Department--and 
specifically EM--will be responsible for the D&D of the plants when 
USEC ceases operation.
    While these cleanup and materials management activities constitute 
work the Department must accomplish, the division of responsibilities 
among programs is essentially consistent with our management approach 
at DOE facilities that have on-going operations in several DOE 
programs. For example, there are multiple programs with 
responsibilities at the Oak Ridge Reservation, including the Offices of 
Science, Defense Programs (now a part of the National Nuclear Security 
Agency), Nuclear Energy, and Environmental Management. EM is 
responsible for environmental cleanup, D&D of surplus facilities, and 
management of waste, while other programs are responsible for materials 
management and maintenance of site infrastructure and facilities 
supporting on-going operations.
    With different offices having responsibilities at the same site, it 
is important that the activities be integrated, the relationship 
between them defined, and the costs for activities and the site 
clarified. As recommended by GAO, the Department is preparing an 
integrated plan for the Paducah site, and a plan for the Portsmouth 
site as well, that will cover all activities at the site. The plan will 
be comprehensive in scope and will include current EM and NE 
responsibilities, a process for transferring additional responsibility 
to EM as materials are determined to be waste, and also will outline 
our handling of the return to DOE of the gaseous diffusion plant from 
USEC at an as yet undefined time in the future. It will provide an 
integrated life-cycle baseline describing the cost, scope and schedule 
for completing all the work at Paducah and closing the site, and the 
assumptions and uncertainties that underlie the plan.
    The integrated plan will provide the basis for the total site 
budget, provide the basis for measuring performance, and facilitate 
common priorities among all activities. EM and NE are currently working 
to develop the plan and define costs and schedules. We expect to 
complete the plan this fall and begin implementing the plan in FY 2001.

Response to GAO on consolidating NE and EM Responsibilities

    The Department has two concerns with the GAO recommendation that 
responsibilities for materials management, infrastructure support, and 
other landlord functions currently being performed by the Office of 
Nuclear Energy, be transferred to the Office of Environmental 
Management. First, the Department is concerned that if these 
responsibilities were given to EM at this time, funding for these 
activities would directly compete with other cleanup priorities at 
other sites--including some with very high risks--for the limited 
resources in the EM budget. The House-passed Energy and Water 
Appropriations Development Appropriations Bill illustrates our concern. 
The House Bill would consolidate funding for all of the uranium 
programs at Paducah, Portsmouth, and Oak Ridge into one account, but 
only provide approximately the amount of funding requested by EM, thus 
resulting in a $43 million overall reduction from the EM request. The 
Department believes that maintaining separate uranium programs in NE 
and EM for the near term, while developing an integrated management 
plan is more likely to enable EM to complete its cleanup by 2010.
    Second, consolidation of NE's responsibilities into EM would be 
premature at this stage. Although the Department envisions the 
combination of these two functions at a future date, at this time NE 
has the sole expertise for several of the Department's responsibilities 
at Paducah. First, NE is the Office with the expertise for working with 
USEC to evaluate the content of the DMSAs to determine which materials 
can be re-used at the USEC facilities and elsewhere, and which 
materials can be declared excess. These materials will be EM's 
responsibilities only after NE has determined that they are excess to 
the Department's needs. Further, NE is the Office within the Department 
with the expertise to work with the nuclear energy industry on these 
recycle issues, such as the potential re-use of fluorine derived from 
the depleted uranium hexafluoride inventory. Accordingly, until the 
Department, through NE, is able to complete the evaluation of the DMSAs 
and develop a clear path forward for the disposition of the depleted 
uranium hexafluoride at Portsmouth and Paducah, we believe it is 
premature to transfer NE's responsibilities at Paducah into EM.

            The Salt Processing Project, Savannah River Site
    The Savannah River Site has approximately 34 million gallons of 
high-level waste in the form of liquid and salt cake (about 31 million 
gallons), and sludge (about 3 million gallons) stored in 49 active 
tanks containing about 400 to 450 Megacuries of radioactivity. This 
waste, generated primarily by chemical separations activities in 
reprocessing spent nuclear fuel and other nuclear weapons components, 
is intensely radioactive and will remain so for many thousands of 
years, and it therefore requires permanent isolation. The highly 
radioactive portion of this waste will be transformed into a more 
stable glass form using a process called vitrification and will be 
disposed of in a geological repository. The remaining low activity 
portion will be stabilized as saltstone, a form of cement, and managed 
as low-level waste.
    The radioactivity in the liquid and salt cake waste is primarily 
associated with plutonium, strontium and cesium in the waste. However, 
only about 10 percent of this 31 million gallons of waste is highly 
radioactive. By separating out the highly radioactive elements in the 
waste, the volume of waste that needs to be transformed into glass can 
be significantly reduced, thereby reducing processing and disposal 
costs dramatically: using an approach that includes separation of the 
high- and low-activity fractions, DOE plans to produce about 5,700 
canisters of vitrified waste, at a lifecycle cost of about $18 billion. 
If the waste fractions were not separated, one estimate suggests the 
Department would need to produce an additional 118,000 canisters at an 
estimated lifecycle cost of over $75 billion.\2\
---------------------------------------------------------------------------
    \2\ General Accounting Office, ``Nuclear Waste: Process to Remove 
Radioactive Waste From Savannah River Tanks Fails to Work'' (GAO/RCED-
99-69, April 1999).
---------------------------------------------------------------------------
    The high-level waste program at the Savannah River Site includes 
activities to reduce the volume of high-level waste, pre-treat or 
separate the high- and low-activity fractions, vitrify high-level waste 
for disposal, and close the high-level waste tanks in compliance with 
applicable environmental requirements. The Salt Processing Project 
(previously referred to as the In-Tank Precipitation Project) 
encompasses the activities necessary to separate the high- and low-
activity fractions of the waste, including the selection, design, 
construction, and operation of effective treatment technologies to 
prepare the high-level waste feed material for the vitrification 
facility, the Defense Waste Processing Facility (DWPF), which began 
operations in 1996. DWPF is the nation's first high-level waste 
vitrification facility for defense wastes. To date, it has produced 
about 890 canisters of vitrified waste, or about 15 percent of the 
canisters that it will ultimately be produced.
    In the early 1980s, the Department began development of the 
technology referred to as In-Tank Precipitation (ITP) to remove cesium 
from the high-level waste stream, a technology that offered the 
potential to significantly reduce life-cycle costs of cesium 
separation. Radioactive operation of the ITP facility began in 
September 1995, but the process generated benzene at a much higher rate 
than expected, which presented a potential explosive and toxic hazard 
and significantly decreased production rates. As a result of the 
excessive benzene generation, ITP operations were suspended in 1996 
and, following in-depth technical assessments of the problem and expert 
reviews, the Department determined in January 1998 that the ITP process 
could not meet safety and production requirements and halted work on 
the technology. In hindsight, this conclusion should have been reached 
sooner based on various independent reviews and GAO reviews. Our 
challenge at this point is to learn from the experience and establish a 
sound scientific process for developing a new treatment technology.
    Since that decision was made, our efforts have been focused on 
doing just that in order to identify and evaluate the best alternative 
salt processing technologies to replace the ITP process. The 
Department's goal throughout this selection process is to ensure the 
technology selected will, in fact, be successful in removing the cesium 
from the waste. We have put in place a new management approach for 
conducting the research and applying the criteria to select the 
preferred technology alternative. Our management approach makes use of 
the best expertise available, both internal and external to the 
Department, and ensures that we conduct the research necessary to 
reduce uncertainties and give us the confidence that we are selecting a 
technology that will be effective and will minimize unexpected future 
cost and schedule impacts.
    Based on our own analysis and recommendations from the National 
Academy of Sciences, the Department recently concluded that more 
research is needed on the technology alternatives currently under 
consideration before we can select a preferred technology. We now 
anticipate identifying a preferred technology alternative in June 2001. 
While this may initially take more time, we will continue to make 
progress in the high-level waste program at Savannah River Site. For 
example:
     There is no immediate impact on the DWPF operations. DWPF 
will continue to produce sludge-only canisters of vitrified waste at 
the current production rate of 200 canisters per year while the salt 
processing technology is re-evaluated. Our current projection indicates 
that DWPF can continue to produce sludge-only canisters through 2010 
without increasing the total number of canisters produced.
     We will continue to meet our commitments to close high-
level waste tanks. To date, we have completed the removal and closure 
of two tanks at Savannah River ahead of schedule and are on track to 
close two other tanks ahead of their regulatory commitment dates of FY 
2003 and FY 2004.
     We believe the approach and schedule will keep us on track 
to meet regulatory commitments for closing old-style tanks and 
processing existing inventories of high-level waste, including the 
milestone to remove wastes and close all tanks by 2028.
     We continue to manage the high-level waste tank farm 
operations to support the stabilization of nuclear materials and spent 
nuclear fuel in the canyons.

          Progress in Identifying a Salt Processing Technology
    In response to concerns raised by the General Accounting Office in 
its report, ``Nuclear Waste: Process to Remove Radioactive Waste from 
Savannah River Tanks Fails to Work'' (April 1999), and based on past 
experiences and ``lessons-learned'' with the ITP project, the 
Department has established a formal and rigorous research and 
evaluation process to identify and evaluate potential technologies. The 
process ensures that sufficient research and development is completed 
before a selection is made, brings internal and outside expertise into 
the process, and provides for effective management and oversight of the 
project, with close involvement by Headquarters and senior management.

The Technical Evaluation

     At the Department's direction, the contractor, 
Westinghouse Savannah River Company, formed a systems engineering team, 
whose membership included experts from other DOE sites, academia and 
the national laboratories, to identify alternatives to the ITP process 
for separating cesium. The team identified approximately 140 processes 
that could potentially be used to separate cesium from salt solutions. 
These processes were grouped into an initial list of 18 alternative 
processing options. The list of 18 was subsequently screened using a 
multi-attribute analysis to focus on a ``short list'' of four 
alternatives for further research and evaluation.
     In 1998, Headquarters established an independent review 
team with experts from other DOE sites and the private sector to 
provide oversight of the process and results, including the cost 
estimates, of the Westinghouse-led team. The team issued reports in 
December 1998 and December 1999.
     The Department asked the National Academy of Sciences 
(NAS) to review the Department's evaluation of technologies to replace 
ITP. NAS issued a preliminary report in October 1999, and its final 
report is expected to be issued soon. The NAS has agreed to continue 
its involvement and provide advice on the selection process.
     While the contractor, Westinghouse, is involved in 
research on some of the technologies under consideration, the Secretary 
determined early in 1999 that Westinghouse would not be involved in the 
selection of the technology and that DOE would seek a design and 
construction contractor(s) for the selected technology through open 
competition.
    The Department is now carrying out research and evaluation on four 
alternatives for pre-treatment of the salt high-level waste. Three 
alternatives: First, small in-tank precipitation using sodium 
tetraphenylborate; second, crystalline silicotitinate ion exchange; and 
third, caustic side solvent extraction focus on extracting the cesium 
from the waste. A fourth technology--alpha removal--is needed to 
separate plutonium and strontium from the waste, a necessary pre-
treatment step for the liquid and salt cake wastes.
    As a result of its assessment and NAS reviews, the Department has 
determined that each alternative required further research and 
development to resolve technical and engineering issues and reduce 
technical uncertainty before one technology for cesium separation could 
be selected. Accordingly, DOE has deferred issuance of a draft Request 
for Proposals seeking input from the private sector for proposals to 
design and construct the needed separation facilities, and the issuance 
of the Supplemental Environmental Impact Statement (SEIS) pending 
further development of technology alternatives.
    Over the next 12 months, the Department will conduct the necessary 
research and development and the technical evaluation process on the 
alternatives. We expect to have sufficient information to complete the 
SEIS and select a technology for cesium separation in June 2001.

Management of the Project

    In November 1999, the Department began to implement a restructured 
management of the Salt Processing Project. The goal was to consolidate 
the Department's Headquarters and field office resources to jointly 
manage the project, and to remove Westinghouse Savannah River Company 
from the management and decision making for technology alternatives. 
The Savannah River Operations Office, EM's program office in 
Headquarters and EM's Office of Science and Technology are working 
together to find suitable treatment technologies, and to establish a 
sound technical basis for the cleanup of the high-level waste tanks at 
the Savannah River Site. We are applying lessons learned from the 
Savannah River Systems Engineering Review, the Department's Independent 
Project Evaluation Team's review, and the NAS's interim report as we 
proceed with further research and development to reduce the 
uncertainties for each of the technologies under consideration. The 
basic elements of our management approach include:
     We have established the Technical Working Group, comprised 
of staff from the EM headquarters offices and the Savannah River 
Office, to manage the research and development activities for the 
technology alternatives. The Group is responsible for making the 
recommendation to me for a preferred technology alternative by June 
2001.
     We are making our best technical resources available to 
the Technical Working Group to provide advice on knowledge gaps, future 
research activities to fill knowledge gaps, and the potential pitfalls 
of implementing various alternatives. The Science and Technology 
program's Tanks Focus Area will serve as a technical resource on 
research and development aspects. The Technical Advisory Team, 
consisting of experts from the nuclear and chemical industry with 
expertise in implementation (design, construction, and operation) of 
treatment technologies similar to those selected for further research 
and development, will provide assistance on implementation issues.
     We will continue independent oversight of the project 
through the continued involvement of the NAS and through project 
management oversight by the Department's Office of Engineering and 
Construction Management.
     We will ensure the involvement of the Department's senior 
management throughout the process. I will continue to have close 
involvement in the project as it moves forward, and the Department's 
Deputy Secretary in his role as Chief Operating Officer will provide 
close oversight of the project.
     Our process also ensures that Congress is kept informed of 
the project's progress. We briefed interested Committee staff in June 
2000 and plan to provide updates on our progress on a quarterly basis.

Cost and Budget Implications

    In FY 2000, the Department plans to spend about $25 million, which 
includes $7.5 million within the Science and Technology program, for 
the Salt Processing Project. Our request for FY 2001 is $21.5 million, 
plus $7.6 million in Science and Technology program funds. This request 
will continue the research and development necessary to reduce 
uncertainties associated each of the potential separation technologies 
and allow a selection to be made. Under our current schedule we 
anticipate beginning design for the selected technology in FY 2002.
    The cost associated with each of the alternatives will be 
considered in the selection process. There have been rough life-cycle 
estimates developed for the different alternatives under consideration 
at various points in our evaluation process, but these are only 
preliminary estimates and are very uncertain. We are now developing 
cost estimates sufficient to support the technology selection decision. 
Once a technology is chosen and we move forward in the design process, 
we will be able to prepare a firm cost and schedule baseline.
                               conclusion
    The Department has made significant progress in managing and 
cleaning up the extensive legacy of hazardous and radioactive 
contamination from more than fifty years of nuclear weapons production 
and nuclear energy research. Nonetheless, there is a long way to go. 
Our mission will not be complete for decades. We face unprecedented 
technical, fiscal, regulatory, and managerial challenges. We believe we 
have established a firm foundation that will enable the Department to 
tackle these problems as they arise. We will continue to work to make 
progress at Paducah, the Savannah River Site, and elsewhere throughout 
the complex. We will work to accelerate cleanup, apply new 
technologies, develop partnerships with our stakeholders and 
regulators, reduce costs, and seek the resources we need to do the job, 
while ensuring the safety of our workers, the public, and the 
environment. We look forward to continuing to work with the Congress on 
this important endeavor.
                                Appendix

       Environmental Management Program: Principles and Practices

    The actual tasks of remediating contamination and storing, 
treating, and disposing of wastes are performed at the sites where the 
contamination and wastes are located. The role of Headquarters is to 
provide program guidance and management on how this work will be 
conducted. We have established several management principles to guide 
the program:
     Safety first;
     Reduce risks;
     Meet our commitments;
     Accelerate site cleanup and project completion;
     Strengthen project management;
     Integrate nuclear waste and materials management and 
operations across the DOE complex;
     Build public confidence and involve stakeholders in 
cleanup decisions;
     Develop an effective long-term stewardship program for 
post-cleanup protection;
     Apply the best science and technology to solve technical 
problems and reduce costs.

Safety First

    The safety of our workers is our highest priority. We have 
incorporated Integrated Safety Management into all of our work--the 
systems, procedures, and attitudes necessary to meet our safety goals 
and improve our safety performance. Managers at all levels are 
responsible for safety monitoring, ensuring that safety is a priority 
throughout the organization, and participating in feedback systems to 
make further improvements. In the recent EM reorganization, we created 
the Office of Safety, Health and Security to ensure all EM personnel 
understand their responsibilities in the areas of safety and security 
and help ensure that these concepts and practices are integral to all 
EM programs and activities.

Reduce Risks

    Another EM priority is to reduce our most urgent risks. As an 
example of this progress, later this year--our target date is November 
2000--we will begin to move spent nuclear fuel, some of which is 
corroding, in wet storage pools near the Columbia River to a new dry 
storage facility further away from the river.
    At the INEEL, we will complete the transfer of Three Mile Island 
spent nuclear fuel to dry storage and the transfer of spent nuclear 
fuel at the Idaho Nuclear Technology and Engineering Center (INTEC) 
from aging, deteriorating underwater storage to safer storage 
facilities. We are continuing to reduce risks by stabilizing plutonium-
bearing materials at the Hanford and the Savannah River Sites. At 
Hanford, we will resolve high priority safety issues regarding the 
liquid high-level radioactive waste in underground storage tanks, such 
as flammable gas generation, and we will continue to pump liquid waste 
from the aging single-shelled tanks--some of which have leaked--into 
safer double-shelled tanks.

Meeting our Commitments

    Most of our activities are governed by Federal and state 
environmental statutes and regulations and enforceable agreements 
between the Department and Federal and state agencies. We are committed 
to complying with these legal requirements and agreements. In addition, 
we plan to meet our commitments to the Defense Nuclear Facilities 
Safety Board. In several cases, we need to work closely with our 
regulators and the Board as well as our stakeholders and Tribal 
Nations, on the appropriate schedule and milestones for our program. We 
will continue to work to reduce costs and accelerate schedules so that 
we can meet our compliance requirements in the most practical and cost-
effective manner.

Accelerating site cleanup and project completion

    EM has established a goal to clean up as many of the remaining 
contaminated sites as possible by 2006, safely and cost-effectively. At 
the start of FY 1997, shortly after the EM program first established 
this goal, 61 of the 113 sites in the EM program required active 
cleanup. We now have completed cleanup at 69 sites, and have 44 sites 
that still require active cleanup. We plan to complete cleanup at two 
additional sites this fiscal year and at three sites in FY 2001, to 
reduce the number of cleanup sites remaining to 39 by the end of FY 
2001.
    Progress at West Valley--This year, at the West Valley 
Demonstration Project in New York, formerly a privately-owned 
commercial nuclear processing facility, we will complete high-level 
waste vitrification processing, producing the final five canisters, and 
begin deactivation of the vitrification facility. At the end of the 
vitrification campaign, the Department will have vitrified 600,000 
gallons of liquid high-level waste, reducing risks to the workers and 
public by converting the waste into a stable form. We will also 
complete the shipment of all spent nuclear fuel to INEEL. Removing the 
125 spent fuel elements from the spent fuel pool at West Valley is a 
prerequisite for decontamination and decommissioning of facilities.
    Accelerated Closure of Rocky Flats--The Rocky Flats site is the 
largest site at which we are attempting to complete cleanup by 2006. To 
date, significant progress has been made toward making this goal a 
reality. On February 1, 2000, our new cost-plus-incentive-fee closure 
contract with Kaiser-Hill took effect. The closure contract, valued at 
nearly $4.0 billion plus incentive payments, provides incentives to the 
contractor to finish the work by 2006, and reduces the fees paid for 
work completed beyond that date. The Department and Kaiser-Hill are 
working to revise the baseline for 2006 closure in accordance with the 
terms of the contract. We have come a long way since the previous 
contractor estimated a few years ago that it would take $30 billion and 
30 years to complete cleanup at Rocky Flats.
    Critical elements in the closure strategy are stable funding for 
the life of the project and the ability to move nuclear materials and 
radioactive wastes from the site, which requires that other sites--
often DOE sites--are available and prepared to accept the materials. 
The coordination of these planned shipping campaigns to the receiver 
sites demonstrates the Department-wide commitment to the goal of 
achieving accelerated closure of Rocky Flats.
    Make Progress Toward Closure at Ohio Sites--At the Fernald 
Environmental Management Project, we will continue accelerating closure 
of this former uranium production facility. We will place a permanent 
cap on Cell 1 of the On-site Disposal Facility using an innovative 
capping technology. At the Mound Plant in Ohio, we will accelerate 
tritium decontamination in buildings on the ``critical path'' to 
closure, completing decontamination of three of eight acres in the 
Semi-Works building, one of three significant contaminated buildings 
that comprise the tritium complex. We will also continue demolition of 
surplus buildings. Of the 107 buildings to be removed from the site, 
approximately 50 percent will be either demolished or auctioned off by 
FY 2001.

Strengthen project management

    From the Manhattan Project through the Cold War, contracting 
practices of the Department and its predecessor agencies had remained 
essentially unchanged. The management and operating (``M&O '') contract 
in common use at Department of Energy sites was a non-competitive, 
cost-reimbursable arrangement in which the government paid virtually 
all contractor costs and relieved the contractor of all risk. During 
this period, M&O contracts were typically awarded or renewed on a 5-
year basis without any competition. The pool of private contractors 
with nuclear weapons production expertise was limited and operations 
were shrouded in secrecy.
    After the Cold War ended, much of the Department's mission shifted 
from the production of nuclear weapons to management and cleanup of the 
nuclear wastes and materials that were left from the nuclear weapons 
production era. In many instances, the contractors that had 
historically operated the DOE sites did not possess the environmental 
expertise to clean-up this legacy of contamination. The old practice of 
renewing and awarding contracts without open competition was not suited 
to the changing missions and needs at the Department's sites. As the 
Department's mission shifted, these historical practices came under 
criticism from the GAO, the Department's Inspector General, and the 
Congress.
    The Clinton Administration immediately recognized and responded to 
these contracting problems in 1993 by initiating comprehensive contract 
reform. Since 1994, the Department has:
     significantly increased competition, recompeting, since 
1994, 28 M&O contracts worth over $40 billion. Indeed, over 94 percent 
of our new (non-M&O) contracts were competitively awarded in FY 1999 
(up from 93 percent in FY 1998). This exceeds the total number of M&O 
competitions in the entire previous history of DOE and its predecessor 
agencies.
     spurred participation in DOE contracting by firms that had 
not generally participated in DOE procurements for traditional M&O 
contracts;
     brought in contractors with environmental expertise rather 
than relying on traditional nuclear weapons production contractors to 
perform cleanup and encouraged more contracting out by facility 
management contractor to apply niche expertise to defined projects;
     encouraged the use of fixed-price contracting, where 
appropriate, both at the prime contract level and at the subcontract 
level. For example, at Savannah River, from FY 1996 through FY 1999, an 
average of 97 percent of our total subcontracting commitments have been 
awarded as fixed-price contracts--amounting to a total dollar value in 
excess of $1.25 billion. Similarly, during the same period at the 
Hanford site, 100 percent of the subcontracts awarded by the M&I 
contractor (Fluor Hanford, Inc.) and the Environmental Restoration 
Management Contractor, or ERMC (Bechtel Hanford, Inc.), have been 
awarded on a fixed-price basis--for a total contract value of $661 
million;
     made performance-based contracting, rather than level of 
effort, the norm;
     instituted an innovative, performance-based ``closure'' 
contract at Rocky Flats; and
     worked to tailor the contracting mechanism to the job at 
hand.
    To further improve contractor performance, last year Secretary 
Richardson strengthened project management by:
     simplifying and clarifying the responsibility and 
accountability of line management for program and project performance;
     creating the Office of Engineering and Construction 
Management in the Office of the Chief Financial Officer to improve 
project management throughout DOE, including establishing baseline 
change control processes, and quarterly project performance reviews;
     conducting external independent reviews by highly 
experienced project management professionals in the early planning 
stages of a project (with additional reviews as appropriate in later 
stages of design and construction), followed by the development and 
tracking of corrective action plans, if needed, in order to correct 
management, technical, or regulatory deficiencies prior to any 
significant cost and schedule impacts;
     establishing a Project Engineering and Design (PED) 
funding line and authorization to design projects for future years new 
starts, which will enable a more credible baseline, derived from 35 
percent design, to be used for Line Item project approvals;
     making greater use of the National Academy of Sciences in 
reviewing projects; and
     establishing the Deputy Secretary's ``Watch List'' of 
critical or troubled projects that will be subject to intense oversight 
at the highest levels within the Department until identified problems 
have been corrected.
    This year, the Secretary has taken additional actions, including:
     requiring all major systems critical decisions, baseline 
change proposals, or site selections for all new missions to be 
approved by the Deputy Secretary before proceeding to the next 
acquisition phase; and
     strengthening the Department's ability to sanction poor 
contractor performance and reward outstanding performance, including 
allowing the Secretary to direct a contractor to remove its top manager 
for failure to perform;
    EM has similarly improved program and project management, including 
establishing the Office of Project Management within EM. This new 
office supports our field offices in their project management efforts 
and assists Headquarters staff with their oversight of project 
implementation. Additionally, the office coordinates internal and 
external reviews of our projects and critical decisions for significant 
projects not reviewed by the Deputy Secretary. This office is working 
with organizations such as the Construction Industry Institute, the 
Project Management Institute, and the National Aeronautics and Space 
Administration, to bring state-of-the-art project management tools and 
training into the EM program to enable us to better manage our 
projects.

Integrating nuclear waste and materials management

    Sharing information and the unique capabilities for managing and 
treating nuclear wastes and materials at many of our sites is critical 
to our success. Our integration initiative seeks to consolidate 
treatment, storage and disposal facilities and use available capacity 
rather than construct new facilities; apply innovative technologies at 
multiple sites; and apply lessons learned and site successes complex-
wide.
    We have integrated our waste and materials management capabilities 
in several key programs. The shipment of nuclear materials from the 
Rocky Flats site to the Pantex Plant in Texas, the Y-12 Plant in Oak 
Ridge, Tennessee, and to the Savannah River Site in South Carolina 
provides an excellent example of how we are integrating the nuclear 
materials storage and treatment capabilities across the DOE complex. 
With respect to waste management, in December 1999, after extensive 
technical analyses and consultation with state representatives and 
other stakeholders, we announced our site preferences for disposal of 
DOE low-level and mixed low-level waste based on the Waste Management 
Programmatic Environmental Impact Statement. This allowed us to 
complete a formal Record of Decision in February 2000 on low-level and 
mixed low-level waste treatment and disposal facilities, after further 
consultations with the affected states.
    The opening of WIPP in New Mexico for disposal operations in March 
1999 provides a good example of the benefits of integration. The WIPP 
provides a means for the Department to permanently dispose of the long-
lived transuranic radioactive waste that has been stored for decades at 
about two dozen sites across the United States. WIPP is critical for 
closing sites like Rocky Flats; for meeting compliance obligations for 
more than a dozen other sites, including the Idaho Settlement 
Agreement; and for reducing storage costs and risks to the public.
    Finally, the transport of radioactive waste and material between 
sites is critical to the success of our integration priorities. EM is 
working with other DOE program offices and with the sites to develop a 
strategy to identify packaging and transportation needs, to support 
shipping schedules, and to use our transportation assets efficiently.

Building Public Confidence

    Good technical work is not enough. Getting the job done requires 
cooperation with regulators and others outside of DOE that have a stake 
in our actions. By working cooperatively with regulators, stakeholders, 
local communities and the Tribal Nations, we have improved the 
efficiency of the EM program and have met our regulatory commitments 
more efficiently.

Developing Effective Long-term Stewardship

    At most sites the Department is performing cleanup that will make 
the land available for other uses, but not necessarily unrestricted 
use. Cleanup to levels allowing for unrestricted use often cannot be 
achieved at DOE sites for economic or technical reasons and has not 
been demanded by regulators. The Department has been able to take 
advantage of the Superfund administrative reforms developed by the U.S. 
Environmental Protection Agency (EPA) to allow anticipated future land 
use to be considered in developing cleanup remedies.
    The goal of long-term stewardship is the sustainable protection of 
human health and the environment after cleanup, disposal or 
stabilization is completed. A reliable long-term stewardship program 
can also provide confidence to regulators and the public that non-
removal remedies are acceptable because the Department can be trusted 
to care for the sites after the waste is contained in place.
    During the past year, the Department has taken action to strengthen 
its long-term stewardship program. First, we increased the budget for 
long-term stewardship to respond to the greater demand resulting from 
the completion of more cleanups. Second, we recently established an 
Office of Long-Term Stewardship at our Headquarters office. The office 
is addressing these emerging challenges with responsibility for field 
guidance and policy development, technical analysis, and identification 
of science and technology needs.
    In accordance with the FY 2000 National Defense Authorization Act 
(NDAA), the Department will provide a report to Congress by October 1, 
2000, with the best available information on the cost, scope, and 
schedule for long-term stewardship at sites and portions of sites in 
sufficient detail to undertake the necessary stewardship 
responsibilities.
    In addition, we are preparing a study on long-term stewardship 
pursuant to the lawsuit settlement agreement (Natural Resource Defense 
Council, et. al. v. Richardson, et. al., Civ. No. 97-963 (SS) (D.D.C. 
Dec. 12, 1998)). The study will address national, programmatic, and 
cross-cutting issues related to long-term stewardship.

Solving Problems Through Science And Technology

    Our investments in science and technology are providing the 
scientific knowledge and new technologies necessary to help us reduce 
the cost and time frame of the complex-wide cleanup effort, and enable 
us to tackle cleanup problems that had no effective solutions. Our 
science and technology program has made a significant impact on how we 
conduct our cleanup operations. Over 75 percent of the approximately 
250 innovative solutions made available for use over the past 10 years 
are making real on-the-ground contributions. For instance:
     Site characterization represents a large portion of the 
cost for environmental restoration activities. We now have very 
sophisticated, safe methods to identify, characterize, quantify and 
monitor contamination.
     New remotely operated machines now exist to perform work 
in conditions that are too hazardous for humans, such as inside 
radioactive waste tanks.
     Among the new technologies making a difference is a 
process that uses a concentrated caustic solution to dissolve and 
remove large quantities of unwanted nonradioactive elements in the 
sludge, thereby decreasing waste volume (Enhanced Sludge Washing). This 
process has been selected as the technology to be used to pretreat 
Hanford tank sludges where it is expected to avoid $4.8 billion in 
costs compared to other technology choices.
     An in-ground ``wall'' of iron filings (Permeable Reactive 
Treatment Wall) has been installed at the Kansas City Plant and 
Monticello Uranium Mill Site to remove contaminants from groundwater as 
the water passes through the ``wall.'' This eliminates the need for a 
more costly ``pump and treat'' system.
     A third Passive Reactive Barrier is in place in the Solar 
Ponds at Rocky Flats to destroy nitrates and remove uranium from 
groundwater. Other reactive barriers deployed at Rocky Flats have been 
designed to destroy chlorinated solvents and capture radionuclides.
     Optimized use of the existing re-injection well network at 
the Fernald site in Ohio will enable the site to accelerate groundwater 
remediation.
    We are also pleased with the progress of our EM Science Program 
(EMSP), which is conducted in partnership with DOE's Office of Science. 
Since its inception in fiscal year 1996, EMSP has invested over $224 
million in support of 274 research projects. Our open, competitive 
approach has ensured the highest caliber of research involving 90 
universities, 13 national laboratories, and 22 other governmental and 
private laboratories. Research is being conducted in 34 states and the 
District of Columbia, two Canadian provinces, Australia, Russia, the 
United Kingdom, and the Czech Republic. Our efforts are already 
providing some encouraging results. For instance, a high-level waste 
research project, being led by Pacific Northwest National Laboratory, 
focuses on determining the effect of radiation on the stability of 
glasses and ceramics at an atomic, microscopic and macroscopic level. 
Because these materials are an integral part of the planning for the 
final waste forms of a number of DOE waste streams, an understanding of 
how radioactive materials influence their long-term stability is 
critical in material selection.
    The increasing number of deployments of new technologies to solve 
real cleanup problems demonstrates that the field is recognizing their 
value. Preliminary data, now being verified, indicate that during 
fiscal year 1999, DOE sites used innovative technologies 218 times in 
cleanup activities, 129 of which were first uses by the site. Of these 
deployments, 166 were science and technology-sponsored technologies. 
This is a definite and dramatic improvement over previous years. Since 
the inception of this program, we have seen nearly 450 deployments at 
DOE sites of 194 new technologies that were sponsored by EM's science 
and technology program. The accelerated site technology deployment 
effort initiated in FY 1998 has contributed to these increased 
deployments. A total of 47 projects have been initiated that involve a 
total of 92 technologies.
    To help ensure that this upward deployment trend continues, the 
Department is working with our site contractors to provide better 
incentives to use new technologies. Contract incentives, coupled with 
the integration of our technology developers and users, will ensure 
that the new technology we are providing will accomplish our cleanup 
goals at less cost, faster and safely.

    Mr. Radanovich. Thank you very much.
    Brigadier General, welcome and please make your statement 
if you wish.

           STATEMENT OF BRIG. GEN. THOMAS F. GIOCONDA

    General Gioconda. Thank you, Mr. Chairman and members of 
the Task Force. I appreciate the opportunity to talk to you 
about the National Ignition Facility. NIF will be a key 
component of the stockpile stewardship program to maintain a 
safe, secure and reliable nuclear weapon stockpile indefinitely 
without underground nuclear testing.
    Before I talk about the project corrective actions taken 
since NIF cost and schedule problems were identified last 
August, and the process by which we will provide a revised 
final baseline for the project by mid-September 2000, I would 
like to put NIF in context for you.
    The National Ignition Facility at Lawrence Livermore 
National Laboratory is an essential element in the stockpile 
stewardship program for three reasons. First, it is the only 
facility that will allow direct experimental study of issues 
that affect the aging stockpile in temperature and pressure 
regimes approaching those that occur in nuclear weapons.
    Second, it will play a major role of providing the 
underlying science needed to validate the state-of-the-art 
nuclear weapons simulation codes under development by the 
Accelerated Strategic Computing Initiative, or ASCI.
    Third, NIF's unique scientific challenges, including the 
demonstration of ignition in the laboratory, will serve to 
attract, train and retain the outstanding technical talent 
required for success of the stockpile stewardship program over 
time. It is not simply for today that we have to think about 
what NIF will bring to the stockpile stewardship program. It is 
for 10, 20 or more years down the road that we have to think 
about NIF now, plan for what NIF can do now, and prepare for 
the beneficial use of information that will only be available 
from NIF.
    We in Defense Programs had asked for a back to basics 
reaffirmation of the role of NIF in stockpile stewardship. We 
need a successful NIF which will contribute to the maintenance 
of our nuclear weapons stockpile. The directors of all three 
weapons laboratories concurred in a white paper on this subject 
that I offered to committee staff prior to this hearing. But 
what you want to know today is where are we with NIF. The NIF 
building, representing an investment of approximately $250 
million, is about 90 percent complete and remains on cost and 
on schedule. The 33 feet in diameter, 150 ton aluminum target 
chamber critical for NIF experiments is installed in the 
building. The optics assembly building where final precision 
cleaning of the optical components will be accomplished and a 
central plant and its cooling towers have been completed and 
turned over to the laboratory for operation.
    NIF will be 60 times more powerful than its state-of-the-
art predecessor laser system, called NOVA, but at just one-
sixth the cost of the unit of energy generated. This advance in 
capability is made possible by six major breakthroughs in 
technology which the benefit laser technology in the future: 
Faster and less expensive laser glass production, large 
aperture optical switches, stable high gain preamplifiers, 
servo controlled large aperture deformable mirrors, and large 
rapid growth frequency conversion crystals and long life final 
stage optics.
    The one remaining technical challenge that I have mentioned 
above is the demonstration of long life final stage optics that 
can withstand exposure to high energy levels associated with 
operating the laser at the required ultraviolet wavelength. We 
are making good progress here. The issue is one of economics. 
How often the final stage optics in the system need to be 
refurbished or replaced directly does affect cost.
    Research is progressing to meet this challenge and we 
expect it will be completed in time to fulfill the needs of 
stockpile stewardship. Integration, schedule and cost problems 
associated with the construction of NIF were identified to me 
in late August, actually 3 days after I took over as the Acting 
Defense Programs DP-1. On September 3, 1999, the Secretary of 
Energy announced a series of actions to address problems before 
we proceed any further with NIF at my recommendation. They 
involve finding out what went wrong, reviewing management 
actions that led to the problems, and the development of a path 
forward in which the Secretary would have confidence again.
    While the nature and magnitude of the problems had not yet 
been identified at that time, Lawrence Livermore management had 
concluded that they were outside the project's ability to 
handle without a baseline change at the acquisition executive 
level. I immediately tasked cognizant DP line managers with 
investigating NIF problems so I could determine appropriate 
course of action.
    Following in-depth consultations between Defense Programs 
and Livermore, we concluded that there were several issues that 
had to be addressed. First was problems with project 
management, as you had mentioned, in the history of the 
program. Delays in completing the design were creating cost and 
schedule problems, inadequacy of the total original 
contingency, especially that associated with clean assembly 
requirements for a laser of this magnitude, and baseline cost 
and schedule estimates for assembly and installation of the 
laser beam path infrastructure were inadequate.
    These issues, taken together with the perception that the 
project had waited too long before notifying DOE management 
about them, helped form the basis of the Secretary's six-point 
plan to bring NIF back to a more realistic path forward to 
completion. A first critical element of baseline strategy was 
to review the actual mission of NIF before we began. Three 
reviews were conducted over the past 9 months to look closely 
at the NIF mission: The Department's 30-day review, a review of 
NIF programs by committee, Target Physics Review Subcommittee, 
and a Department of Energy report in classified and 
unclassified white papers, as I mentioned, signed off by the 
three laboratory directors.
    These reviews affirm the importance of NIF to the stockpile 
stewardship program. At the Secretary's direction, an 
independent task force was formed by the Secretary of Energy 
Advisory Panel to review options to complete the project and to 
recommend the best technical course of action. The overall 
conclusion in the interim report to this SEAB stated the task 
force has not uncovered any technical or managerial obstacles 
that would in principle prevent the completion of the NIF laser 
system. Nevertheless, serious challenges and hurdles remain. 
The NIF task force believes, however, that with appropriate 
corrective action, a strong management team, additional funds, 
and extension of the schedule and recognition that NIF is at 
its core a research and development project, the laser system 
can be completed.
    The task force has concluded this evaluation and will 
submit its final report to the Secretary this month or in early 
August. This report will also become part of the final 
baseline. The Secretary is committed to NIF and an interim 
baseline was submitted to Congress on June 1, 2000. The final 
baseline will be reviewed and evaluated in August and will be 
submitted to the Congress by mid-September. I have been 
monitoring the project's progress in preparing the new baseline 
proposal very closely, and all of those involved are very aware 
that the rebaselining schedule must not slip.
    To date, the project is meeting all the milestones, interim 
milestones, established for this baseline effort--for this 
rebaseline effort. Continued congressional support in the NIF 
project as a key element of stockpile stewardship remains 
essential. I believe the progress currently in place will 
enable DOE to deliver such a baseline by mid-September as 
promised by the Secretary.
    You no doubt will ask what changes have been made so you 
could have confidence in that effort. Line and project 
management at DOE and Lawrence Livermore have been restructured 
and have demonstrated over the last 6 months that they are 
capable of managing a project of this scope.
    The NIF project method of execution is being changed to 
address the increased complexity of this state-of-the-art 
system and associated cleanliness problems in assembling and 
installing the laser and target infrastructure. For example, 
assembly and installation of the beam path will now be managed 
and performed by an industrial partner and industrial 
subcontractors with proven records of constructing similar 
complex facilities.
    Changes to clearly define line management, which you also 
mentioned in your opening statement, apart from the staff 
support functions required to complete the project 
successfully, have been made. Line management responsibility 
flows now from the Secretary through the Administrator of the 
NNSA, his Deputy for Defense Programs, which temporarily is me, 
to the Director, Office of NIF that reports directly to me. The 
line responsibility then continues directly to the Director of 
Livermore to the Livermore Lab NIF project. Everyone else is 
staff in that function. That line is directly accountable up 
the line to the Secretary.
    The project management team at Livermore has demonstrated 
over the last 6 months that it is capable of managing this 
project with the development of the rebaselining and regaining 
the confidence of the Department. In particular, it is engaged 
in utilizing industrial experts with relevant experience to 
both review and participate in the project. In developing a 
rebase--revising the baseline we took the time to examine 
options ranking from completion of the NIF in the shortest 
possible time to schedules that would stretch the completion 
and funding over a much longer time. The quickest completion 
project was also the most costly. Plus it would unbalance the 
stockpile stewardship program which I have overall 
responsibility for.
    The stretched out schedule options range from a maximum 
increase of 150 million in fiscal year 2001 to no increase in 
that particular year. We knew that these options were likely to 
result in further schedule delays and increased total project 
costs, but we needed to understand if they could lead to a 
completed NIF that would support our critical stockpile 
stewardship RAM.
    On May 3, 2000, the Secretary selected the path forward for 
NIF with completion of possible--using the possible options I 
mentioned. The Energy Systems Acquisition Advisory Board 
proposed further refinements after looking at that path. The 
new guidance directed Lawrence Livermore lab to develop a 
detail project execution plan cost estimate and a cost profile 
that would complete a full capability NIF. To maintain a 
balanced stockpile stewardship program, funding was limited to 
no more than 95 million over the original request in 2001, no 
more than 150 million over the original request in 2002 and 
2003, no more than 140 million in 2004, 130 million in fiscal 
year 2005 and a declining profile thereafter.
    The allocation of funding to meet the fiscal year 2001 need 
of 95 million has been requested in the fiscal year 2001 budget 
amendment that is before you on June 27th this year. Successful 
completion of NIF with this funding profile will deliver first 
light or first operation of NIF lasers at the end of 2001, 3 
years later than the original schedule, and full NIF capability 
in late 2008, 4 years later than the original schedule. At the 
time of full deployment the NIF staff will already have 
completed 1400 to 1600 shots, beginning to acquire the data in 
support of the stockpile stewardship program, which we look 
forward to.
    The preliminary estimate----
    Mr. Radanovich. Mr. Gioconda, pardon me, we do have a vote 
up on the board. I am going to have to run off and vote. 
Hopefully we can keep this going.
    General Gioconda. One page and I am done.
    Mr. Radanovich. Go for it.
    General Gioconda. The preliminary estimate and total 
project costs for the option presented to NNSA is 2.12 billion 
with the related cost of approximately 1.14 billion in NIF 
readiness and technological base and facilities for 
approximately 3.26 billion through project completion. These 
estimates could be adjusted as a result of the detail planning 
and review and validation of the baseline and we are doing that 
right now.
    In August, Defense Programs will conduct a detailed cost 
and schedule and scope review of the rebaselining plan, as 
recommended by the SEAB task force. Ms. Cathy Carlson, Manager 
of Nevada Operations, will chair this review, and the Deputy 
Chair will be Mr. Dan Lehman of the Office of Science, asking 
the rest of DOE to take a look at it. Burns & Rowe will conduct 
an independent cost review as part of this process. The 
combined review will give the Department a high level of 
confidence that the proposed baseline can be successfully 
executed as planned and will be formed in time to present the 
final baseline plan for approval prior to delivering the 
certified baseline to Congress in mid-September.
    Mr. Chairman, with that overview I will be happy to answer 
any of the panel's questions.
    Mr. Radanovich. Thank you very much. As you may have heard 
the bells, we have got votes coming on. It is one vote. We will 
be back. We will shortly have three votes after that. So we 
will try to get your questions in and get the testimony of the 
GAO in between things. So we will be winging it from here. If 
Mr. Gutknecht comes back before I have a chance to get back 
here, I will have him resume the hearing. So begging your 
indulgence, we will do a quick recess and we will be back here 
shortly.
    Thank you.
    [Recess.]
    Mr. Radanovich. Thank you. We will go back into session. We 
do have another three votes coming up shortly, so I apologize. 
We are going to get through this just as much as we can. What 
I'd like to do is ask one question on each side and then invite 
the next panel up to give their testimony as well. So if we can 
start with the Savannah ITP project, Ms. Huntoon, please tell 
me who made the decision to cancel the ITP project and what 
information led to this decision that was different from the 
information presented in the past?
    Dr. Huntoon. Well, Mr. Chairman, the ITP project, as you 
probably know, began in the '80s, when the need to deal with 
this particular waste was identified. The technology that was 
put in place utilizing the ITP was canceled because of safety 
and production concerns with benzene. The Department, namely 
Environmental Management and Savannah River management, and 
Westinghouse all made the decision at varying times, within a 
few months of each other I think, to cancel it. The Secretary 
made the decision that the contractor involved would not 
continue managing the project. The decisions came after we had 
reviews from the National Academy of Sciences, as well as our 
own internal review process, that led us to conclude that we 
were not going to reach our goal with that technology.
    Mr. Radanovich. All right. Thank you. Regarding Paducah, 
GAO says that Drum Mountain is one of the main sources of the 
serious groundwater contamination problems at that site. 
Removal began after the press accounts about the potential 
hazards to the workers because of Drum Mountain. What was the 
schedule for removing Drum Mountain before the press accounts 
and what changed about the safety threat that Drum Mountain 
presented to the public in the aftermath of press accounts that 
led to the accelerated schedule to remove it?
    Dr. Huntoon. Well, I am not exactly familiar with the GAO's 
report wording on that issue, but let me tell you a little bit 
about the way we have undertaken the work at Paducah. For a 
number of years we have been investigating the problems down 
there dealing with the groundwater issues, dealing with the 
regulators on prioritizing the work. Drum Mountain certainly is 
a very visible eyesore, as the pictures all indicate. These are 
my pictures over here I wanted to show you, because that is us 
taking down Drum Mountain. I wanted to let you know that has 
begun.
    The increased emphasis came because we had some increased 
funding due to the visibility of the project. Drum Mountain 
wasn't the single biggest risk down there to people or the 
environment. Some of the groundwater issues are greater risks 
and certainly some of the contamination in the lagoons and 
streams are bigger risks. We are, of course, taking care of 
those too. Numerous studies had to be done to identify where 
these plumes were traveling and where they were coming from in 
the subsurface; that has required a lot of emphasis.
    But, I do want to emphasize to you that the Commonwealth of 
Kentucky, the Environmental Protection Agency, and the 
Department of Energy have together deliberated on the 
prioritization of the work at Paducah. We were able to add work 
because of the increased funding, thanks to you all, and 
hopefully we will add more work next year if we can get the 
more funding to support that. Over the past 4 years, Paducah 
has not received the money that we have requested in our budget 
for Paducah, and that has affected our ability to take care of 
some of these problems as rapidly as we would have liked.
    Mr. Radanovich. Thank you very much.
    General Gioconda, what permanent changes with regard to 
reforms and safeguards have you made for a transient 
administration so that next year we will not be here discussing 
a revised time line with unforeseen costs with regard to the 
NIF facility.
    General Gioconda. What we have done to regain confidence, 
is get a management team in place that we have confidence in, 
so you could have confidence in that management team. And what 
we did is allowed that management team to be successful by 
cleaning up the lines of communication, cleaning up the line 
accountability so the whole organizational structure is cleaned 
up.
    Second thing that we have done is we have looked at the 
complexity of the project realizing what is world class within 
the laboratory, is the technical side of it, which they did 
magnificently. That is getting lost in this discussion. There 
are a lot of things that the laboratory has done very, very 
well--and hand over the integration, the project management 
parts to world class companies that do this for a living. We 
are about ready to release a contract for that ability. So they 
have an industrial partner that does the world class things 
that they are world class in.
    The third part that we have done is we have instituted a 
series of milestones and planning such that we know not at the 
end or not because it is too late, but the planning is down to 
the detail that the only changes have to come up through the 
director, the DOE official or myself to make the changes if 
something should go off, veering factor. So there is controls, 
if you would, at every part of the project.
    And then the last part I would tell you is that we have 
also instituted in Defense Programs an ethic that had been 
missing in project management, more expertise brought in this 
project management, both internal training and external 
expertise, not only on this project but other projects that was 
missing before. We were focused so much on the technology that 
the integration and project management was not the focus, and 
it should have been.
    Mr. Radanovich. Thank you very much. And please let me 
state too that for one I don't think the purpose of this 
hearing is to debate the merits of the NIF program because I 
think that there are a lot of other possible fusion 
alternatives and such I think are just wonderful. It is mainly 
the time delays and cost overrides that are of concern to this 
committee.
    Also, Ms. Huntoon, I wanted to give you the opportunity to 
make available by testimony by the name of Mr. Magwood that is 
from the Office of Nuclear Energy and would like to ask 
unanimous consent for you to be able to submit that to the 
record if there is no objection. We needed to do that for the 
order of the business, and thank you.
    [The prepared statement of William D. Magwood, IV, 
follows:]

Prepared Statement of William D. Magwood, IV, Director of the Office of 
   Nuclear Energy, Science and Technology, U.S. Department of Energy

    Mr. Chairman, and members of the Task Force, I am William D. 
Magwood, IV, Director of the Department of Energy's Office of Nuclear 
Energy, Science and Technology. My office is responsible for the 
uranium enrichment-related activities retained by the Department after 
the formation of the United States Enrichment Corporation (USEC) in 
1993. I am pleased to have the opportunity to be here today to discuss 
the Department's uranium program responsibilities, and in particular, 
to discuss the Department's plans to convert the inventory of depleted 
uranium hexafluoride to a more stable form, and to update you on the 
ongoing actions taken by my office to address the safety concerns 
associated with the DOE Material Storage Areas at the Paducah gaseous 
diffusion plant site.
    With the privatization of Government's uranium enrichment 
activities, the Department's remaining uranium enrichment-related 
responsibilities fall into five primary areas: management of the lease 
under which USEC Inc operates the government's enrichment facilities, 
management of related facilities not leased to USEC, management of 
various pre-existing liabilities, management of surplus uranium 
inventories, and management of the Department's inventory of depleted 
uranium hexafluoride. Today, I will focus my remarks on those aspects 
of our activities that address environmental issues at the sites.

       DOE Material Storage Areas Characterization and Mitigation

    Our management of non-leased facilities at the two gaseous 
diffusion plants is designed to ensure that buildings and grounds not 
under the management of USEC are properly maintained. These activities 
include completing work started by the Department before the formation 
of USEC to address potential environmental hazards associated with 
buildings and materials at the site. For example, we maintain a system 
to collect and manage polychlorinated biphenyls (PCB) inside the plants 
and clean up spills of these materials when they occur.
    One of the most important responsibilities retained by the 
Department has been responsibility for management of certain materials 
and equipment that are stored in 148 locations within the Paducah 
Gaseous Diffusion Plant. These areas--referred to as DOE Material 
Storage Areas (DMSAs)--are areas containing materials and equipment 
retained under the management of the Department in a stable, safe 
configuration, pending the final decontamination and decommissioning of 
the gaseous diffusion plant. Some of the equipment stored in the DMSAs 
includes spare parts and other items specially produced for use in the 
gaseous diffusion process and thus, represents a unique and 
irreplaceable asset to the Department and USEC.
    As Dr. Michaels has testified, last summer, when concerns regarding 
health and safety at the Paducah Gaseous Diffusion Plant site were 
raised, Secretary Richardson ordered a full investigation into what had 
occurred. As part of this, a two-phase investigation was conducted at 
Paducah to evaluate environment, safety and health programs in place at 
Paducah since 1990, and the programs in place prior to 1990.
    In October 1999, the Department issued a report on the first phase 
of the investigation, which examined existing health and safety 
programs. This report identified concerns associated with environmental 
cleanup, the safety and health programs at the site, DOE and contractor 
oversight of safety, and a specific safety concern with the manner in 
which materials and equipment were stored in several of the DMSAs.
    Specifically, the investigation found that of the 148 storage areas 
at Paducah, the Department had insufficient records to verify that the 
materials and equipment in 11 of the areas did not contain quantities 
of fissile materials that might present a criticality risk under 
certain conditions. Although the concern raised did not present an 
imminent threat to worker safety, the investigation identified the need 
to expeditiously move forward with characterization and, if needed, 
remediation of the materials and equipment in those areas.
    As a result, our initial actions were focused on ensuring that 
interim measures were sufficient to provide adequate protection for 
workers while longer term corrective actions were underway and on 
determining whether there were additional DMSAs of potential concern. 
Subsequently, two additional areas of concern were identified, bringing 
the total to 13 DMSAs.
    Since that time, the Department, in conjunction with USEC and in 
close consultation with the Nuclear Regulatory Commission (NRC), has 
developed and is aggressively implementing a plan for characterization 
and mitigation, where needed, of the 13 DMSAs. Characterization of one 
of the 13 high priority DMSAs is now complete and was found not to 
present a risk of inadvertent criticality. The Department expects to 
complete characterization of the remaining 12 DMSAs by July 2000.
    Until this work is completed, the Department has established and is 
enforcing special restrictions regarding access to and work around 
these DMSAs in order to ensure that employees at the site are not at 
risk. At the time in which the concern was identified, interim measures 
were put in place to mitigate the concern, pending completion of 
corrective actions. Once the characterization program is completed, the 
Department will have either eliminated these areas as a threat to 
worker safety or launched a program to remediate any threats that are 
discovered.

                 DUF6 Management and Conversion Project

    A primary mission of the Department's uranium program is to manage 
the inventory of the approximately 57,600 depleted uranium hexafluoride 
storage cylinders located at Paducah and Portsmouth gaseous diffusion 
plant sites and the former K-25 gaseous diffusion plant at Oak Ridge's 
East Tennessee Technology Park. About 1600 of these cylinders will be 
received by the Department over the next 4 years. Overall, the 
cylinders contain approximately 700,000 metric tons of material. The 
objectives of the cylinder management program are to maintain the 
cylinders in an environmentally compliant manner and to proceed with a 
project to design, construct, and operate plants to chemically convert 
the Department's inventory of depleted uranium into a more stable form 
that would make it acceptable for reuse, if applications for the 
material are found, or for disposal.
    For decades, as the Department continued its uranium enrichment 
program, it filled large 10- and 14- ton steel cylinders with depleted 
uranium hexafluoride. This material, which results from the enrichment 
of uranium for commercial nuclear fuel or defense, is relatively inert 
and easy to store. It is a granular solid at normal temperatures and 
the cylinders, if properly maintained, can safely contain this material 
for many years without causing a hazard to workers, the public, or the 
environment.
    However, proper management of this inventory was neglected for many 
years. As the Department produced more and more depleted uranium over 
the years, it stacked the cylinders in a less than optimal manner. For 
example, the Department often stored these cylinders too close together 
to allow for periodic visual inspection, and some of these cylinders 
were in direct contact with the moist ground, resulting in corrosion.
    Over the last several years, the Department has taken positive 
action to address this situation. We put in place a comprehensive 
program to maintain and monitor the inventory pending its disposition. 
In particular, the program performs activities such as:
     annually inspecting cylinders, repairing cylinders as 
required, maintaining operations procedures, and maintaining cylinder-
related information data bases, including inspection data;
     relocating cylinders to permit 100 percent visual 
inspection and ultrasonic inspection and procuring concrete bases on 
which to place cylinders;
     continuing the control of cylinder corrosion by surface 
cleaning and painting; and
     upgrading and maintaining the cylinder storage yards.
    Management of the inventory of depleted uranium hexafluoride is 
consistent with the consent agreements with the involved states, and 
with Defense Nuclear Facilities Safety Board (DNFSB) Recommendation 95-
1, ``Improved Safety of Cylinders Containing Depleted Uranium.'' We are 
confident that this program has successfully corrected problems 
associated with the storage of the Department's depleted uranium 
inventory. In fact, on December 16, 1999, the DNFSB notified the 
Department that the Board considers the recommendation closed, because 
the Department has met all of the relevant commitments. In particular, 
the Board recognized DOE's efforts to develop a ``workable and 
technically justifiable cylinder management program,'' and the 
Department's commitment to continuing implementation of the cylinder 
management program as part of the accelerated conversion program.
    The President's FY 2001 budget request provides $16 million to 
maintain the cylinders, about $4 million more than was appropriated 
this year. Because of funding shortfalls in previous years, this 
increase in funding is needed to enable the Department to meet the 
commitments made to the States and the DNFSB, and is important to the 
safe and efficient management of the inventory in a manner that 
protects the workers, the public and the environment. I ask for your 
support for this budget request.
    Even though the material is stored safely and managed effectively, 
the Department recognizes that it must deal with the final disposition 
of this inventory in an expeditious manner. Accordingly, and in 
compliance with the intent of Public Law 105-204 passed in 1998, the 
Department is proceeding with plans for a project to build and operate 
conversion facilities to chemically convert the inventory into a form 
better suited to both storage and ultimate disposition.
    In fiscal year 1999, the Department's conversion project completed 
a Programmatic Environmental Impact Statement on the management of the 
depleted uranium hexafluoride inventory and concluded, in a Record of 
Decision, that it would seek to convert the Department's inventory of 
depleted uranium hexafluoride into a more stable form that would make 
it acceptable for reuse if applications for the material are found or 
for disposal. The Department also issued the ``Final Plan for 
Conversion of Depleted Uranium Hexafluoride'' to carry out this 
conversion as required by Public Law 105-204, as well as a draft 
request for proposals (RFP) to find a private sector firm to design and 
construct the conversion plants. The Department had planned on issuing 
the final RFP around the end of 1999.
    As reflected in our FY 2001 budget request, the Department has 
delayed the issuance of its final RFP. During the final stages of our 
preparation of the RFP last year, the Department collected comments 
from and met with industrial companies interested in participating in 
the conversion plant program. We found that they were almost 
universally worried about how revelations of concerns about past 
practices at the gaseous diffusion plant sites might impact this 
project. They, and many experts inside the Department, have indicated, 
that before the Department can proceed responsibly with the design and 
construction of depleted uranium hexafluoride conversion plants, we 
must first know with certainty whether and how much of the inventory is 
contaminated with significant levels of transuranic materials.
    As you know, the primary issue that arose during the last year 
regarding past practices at the gaseous diffusion plants was the 
concern that transuranic elements such as plutonium and neptunium 
contaminated the uranium feed materials normally managed by workers at 
the sites. To avoid repeating past mistakes, and to avoid placing 
project schedules ahead of worker safety, the Department made the only 
decision it could: to wait until we have a full assessment of the 
transuranic contamination of the inventory before proceeding with the 
project. To do less might endanger future workers' safety and 
jeopardize the overall success of the project.To deal with this 
challenge, we quickly set forward in November 1999 to define the 
contamination in the depleted uranium inventory. We first hoped that we 
could draw upon historical data to characterize the contamination. 
Unfortunately, our review to date of available data has not yielded 
sufficient information to enable us to ensure that future workers could 
be adequately protected.
    As a result, we began, in December 1999, a sampling program to 
characterize the inventory and obtain the data required to design 
plants that will get the conversion job done while protecting the 
health of future plant workers. We will soon make public a detailed 
plan that we will use to complete the sampling program. Once the 
sampling program is complete this summer, we will gain an understanding 
of the contaminants present in the cylinders such that we will be able 
to release a final RFP in October 2000.
    The President's FY 2001 budget requests $12 million for the 
depleted uranium hexafluoride conversion project; an amount that we 
plan to match with an additional $12 million from funds obtained under 
the Memoranda of Agreement with USEC, bringing the total to $24 million 
in fiscal year 2001. Another $12 million from the Memoranda of 
Agreement is reserved for the conversion project and related 
activities. This funding will keep the project on track to issue the 
final RFP in October, award a contract early next year and begin design 
in fiscal year 2001. This will enable the Department to meet the 
requirements of Public Law 105-204. The President's FY 2001 budget 
request also includes funding for five additional staff at the Paducah 
and Portsmouth site offices to assist with management of conversion 
activities and to help address environment, safety and health issues.

                               Conclusion

    Mr. Chairman, let me conclude by saying that the Department remains 
committed to meeting the goals and requirements of Public Law 105-204 
for beginning construction of conversion facilities. I believe that the 
additional time to sample the cylinders is a prudent measure to ensure 
future workers protection and the ultimate success of the project. I 
look forward to working closely with the Subcommittee on this important 
project.
    Overall, I should emphasize that the Department's strategy for our 
activities at all of our sites is risk-driven. The Department's highest 
priority is to address the most immediate threat to its workers and the 
public. We are working to characterize and manage the areas, materials 
and equipment under our control and mitigating the risk where needed. 
The Department's strategy and priorities for action are being developed 
in conjunction with USEC Inc, State and Federal regulators, and others 
with concerns at the site, and we will work to set priorities for the 
available funding each year to ensure that it is used to address the 
highest risks and support our long-term objectives.
    Also, I believe we are making good progress with the resolution of 
the DMSA issue. We have worked very closely with USEC and the NRC to 
optimize the schedule for completing the characterization work. Once 
this work is completed in July, we will be able to assure our workers 
and the public about the safety of these storage areas.
    I appreciate your attention and would be happy to answer any 
questions you have.

    Mr. Radanovich. I would like to turn it over to Mr. Price 
for questions. Dave.
    Mr. Price. Thank you, Mr. Chairman. Dr. Huntoon, General 
Gioconda, thank you for your testimony, for being here today, 
and for answering our questions in a forthright way. We, as you 
know, are between votes here on the House floor, so I may have 
to submit some questions for the record. But let me go as far 
as I can with a line of questioning mainly focusing on the ITP 
matter. If you want to bring any of these other cases in by way 
of illustration or elaboration, please do so. My question goes 
to the kind of process that you have in place or put in place 
with projects of this sort, the process of oversight and 
evaluation, this system for troubleshooting and catching 
problems before they get out of hand. I wonder what you have 
learned from that and what sorts of correctives you have made 
efforts to put in place.
    The GAO report on ITP states that DOE oversight teams, the 
Defense Nuclear Facility Safety Board, and even Westinghouse 
knew quite early in the process that it was likely to go far 
over budget, yet these warnings were ignored. Why did it take 
DOE so long to determine that the cost of this project would be 
so much higher than the original estimates? Is it a matter of 
insufficient oversight or were there management problems? Are 
there other explanations that would you care to offer?
    Dr. Huntoon. Congressman, I believe in all honesty I could 
answer yes to your question. Hindsight is wonderful. The ITP 
project began in the '80s. At that time a process was 
identified, the contractor made a solid effort of trying to 
find the technologies that were available in the '80s to deal 
with this issue. We put it on a fast track because we thought 
we could do that, or the people in charge at the time thought 
they could do that. They went into design and construction at 
the same time they were doing research, and that is always a 
very dangerous, slippery slope because then you start trying to 
make things work, to engineer work, to engineer fixes as 
opposed to understanding the science. It was going along, I 
think, relatively well until one of the big tests showed there 
was a lot of benzene there. Then we started working toward 
resolving the benzene issue.
    Finally, after many reviews we realized that we were not 
going to be able to engineer a fix there and decided to look 
for other technologies. I believe we are now on the right track 
to fix this problem. Of course, we have hindsight to thank but 
we also have technologies that are available today that were 
not present then. We have identified--started identifying 100 
and some technologies, and we narrowed them down to four that 
we are studying collecting more data on. We have selected 
criteria that we will use to choose the technology, and that 
will be done by June of 2001.
    What have we learned? We learned that we weren't paying 
enough attention to managing this. We learned that perhaps we 
did not have the right technical people on the government DOE 
side working with the contractor, and we have changed that. We 
also learned that when we have review teams come in, good 
review teams from outside of the government, outside of 
Department of Energy, come in and make recommendations we 
should pay attention to them, and we did not in the past.
    I think we have had this past year two excellent reviews, 
one DOE-led review by experts across the complex looking at 
this ITP. We also had a National Academy review. Those two 
reviews led us to where we are today: looking at these new 
technologies. We have learned, and we put in place more 
discipline in project management. I added to my staff in 
Washington a project management office to help each of our 
sites with their projects and to identify when projects are 
having problems. I don't believe we were exercising enough 
oversight at headquarters. We didn't have full-up project 
reviews as we are now having quarterly on our big projects.
    So, we have learned a lot and we have put a lot of what we 
have learned into practice. I think this is going to be a much 
more successful project because of it.
    Mr. Price. As I understand your answer, it goes to the 
quality of management. It involves the capacities of your 
staff, the technical capabilities at your disposal, and it also 
involves a need for not only having outside evaluation but 
taking that evaluation seriously.
    Dr. Huntoon. That is right.
    Mr. Price. When it comes to congressional oversight, as I 
understand it, the fact that this project was funded with 
operation funds rather than as a construction project did make 
it more difficult for Congress to conduct effective oversight 
and it did not appear as a line item in the appropriations bill 
until the 1990s. I personally don't know the history of that 
from the congressional side. Surely this did have something to 
do with the failure of congressional oversight. Why was it 
handled in this matter? How was that decision made?
    Dr. Huntoon. Like you, I wasn't present for the history of 
the project but I have been told that in the '80s the rules 
that the deputy followed permitted experimental facilities in 
support of existing facilities at various sites. This was 
something that was going to work with the tank farm down at 
Savannah River to get rid of that waste. I think using 
operational funds was an acceptable procedure at that time to 
make additions to existing facilities. That is what I have been 
told, Congressman. I think the issue we ought to remember here, 
though, is that the problem, the big problem, was technical and 
it remains a big problem. That is why we have taken some down 
time to go back and look at some new technologies and find a 
better way to do it.
    I don't think any amount of oversight would have foreseen 
the inability of ITP to deal with the large levels of benzene 
that it produced. In fact, only in the last few months have we 
understood the chemical processes that led to the benzene.
    Mr. Price. I understand those technical aspects, but I am 
asking you to back off just a bit from that and think about the 
processes that apply beyond the Savannah River case and the 
political pressures that might be present. Is it possible, for 
example, that the agency's reluctance to abandon this less 
expensive method of waste separation was in part a political 
decision or at least that it was constrained by political 
factors, that perhaps the agency was reluctant to report 
failure to the Congress or to dramatically revise its budget 
estimates until it absolutely had to?
    You know, it could be that we would have been better off 
spending a bit more money earlier to make some changes rather 
than what we are faced with now. Maybe independent oversight 
such as that conducted by the NAS eventually would have made it 
easier for DOE to justify revised budget numbers earlier. So 
maybe induction of independent oversight earlier would have 
saved some time and some money in getting to where we are now. 
It is hard to say to what extent there was a kind of 
politically constrained reluctance to face facts and to come 
clean about the situation and ask for exactly what you needed, 
but if you want to comment you may or the General, too, but I 
do think this case does raise those sorts of issues.
    Dr. Huntoon. I think I understand exactly what you are 
saying. Backing away from it, it is hard for me to imagine the 
climate in the '80s, when this was going on. Actually before 
the environmental management office of DOE was formed this 
issue was first dealt with in a production sense. I believe 
that there was a strong feeling of let's get on with it and 
move out. I can't accept that people were intentionally trying 
not to deal with the problems. But, you may well be right. 
Perhaps there was reluctance to face the problem, thinking it 
could be fixed. I think each day or each month it was 
prolonged, the people involved kept thinking they could 
engineer a fix for this problem.
    Mr. Price. Finally, let me just ask you to elaborate on the 
comment you made about technically trained personnel. You say 
that one of your corrective measures has been to bring on 
skilled people who can understand the technical problems and 
deal with these issues more adequately, maybe another instance 
where spending a bit more money early on would save money later 
on the Savannah River project or perhaps NIF. What about that? 
What is your assessment of the extent to which personnel 
shortages and a lack of the proper training entered into these 
problems and to what extent has that been fixed?
    Dr. Huntoon. I think it entered into the problems quite a 
bit. Historically our sites were predominantly managed by M&O 
contractors and a minor part of the management structure was 
Department of Energy. I think we did not have the technical 
personnel. I know that the Defense Board has raised this as an 
issue. I think the Department has heeded these warnings and has 
tried to create positions in management to oversee these 
techincal contractors. I know the current management down at 
Savannah River has paid a great deal of attention to having 
project managers that understood the technical complexities of 
what they were managing. But the problem you put your finger on 
is complex. Maintaining skilled technical people and managing 
these large technical projects are serious issues. It is hard 
to keep these people in the government, working on these sorts 
of projects.
    Mr. Price. They have got lots of options in this economy.
    Dr. Huntoon. Today they do.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Radanovich. Thank you, Mr. Price, and thank you, both 
of you on this panel, and you are excused.
    I would like to welcome up the next panel, which consists 
of one person, Ms. Gary Jones. Ms. Jones, may I ask you, since 
we did get a vote call, will your opening statements be more 
than, say, 5-8 minutes?
    Ms. Jones. Probably about 7 minutes.
    Mr. Radanovich. OK. We will be timing you. What we will do 
is allow you to offer your testimony and then we will have to 
recess, unfortunately, for about 3 votes. If you don't mind 
waiting until we get back, we deeply appreciate it.
    Ms. Jones. That would be fine, Mr. Chairman.
    Mr. Radanovich. Welcome. And Ms. Jones, of course, is the 
Associate Director for Energy Resources and Science Issues with 
the General Accounting Office. Welcome, and have at it.

  STATEMENT OF GARY L. JONES, ASSOCIATE DIRECTOR FOR ENERGY, 
    RESOURCES, AND SCIENCE ISSUES, GENERAL ACCOUNTING OFFICE

    Ms. Jones. Thank you. We are pleased to be here today to 
discuss our reports on the cleanup of hazardous and radioactive 
waste at Paducah, Kentucky and the high level radio waste 
project at Savannah River, South Carolina. Rather than talk 
about the task ahead for Paducah, I think that Dr. Huntoon did 
that; what I would like to begin by showing you our picture of 
Drum Mountain. And the reason for showing our picture of Drum 
Mountain is because while they have begun to clean it up, I 
want to note that after Drum Mountain has been cleaned up and 
taken away, there is still 57,000 tons, or 88 percent of the 
total amount of scrap metal on site, that will still need to be 
removed. Until then contamination washes from the scrap metal 
during rainstorms and the runoff carries contaminated soils and 
sediments into ditches and creeks.
    DOE's current plan is to spend about $1.3 billion to clean 
up Paducah by 2010. However, there are a number of technical, 
funding, and regulatory uncertainties that may affect DOE's 
ability to complete the cleanup within the targeted cost and 
schedule. Technical uncertainties include the use of 
technologies that are unproven or may not be well suited to the 
site condition.
    For example, to treat groundwater contamination DOE plans 
to install permeable treatment barriers in the aquifer at 
depths of up to 120 feet. The treatment barriers are shown with 
the blue lines on the map with the groundwater plume. The 
technology is new and its success is uncertain because it is 
untested for the specific environment found at Paducah. If 
groundwater flows too quickly through the barrier and thus 
spends too little time in the treatment zone, the barrier may 
not have enough time to fully treat the TCE, which is a 
hazardous contaminant. In that case the actions of the 
barrier's treatment zone could change the TCE to vinyl 
chloride, which is even more toxic.
    The cleanup plan is also built on some optimistic 
assumptions, such as assuming annual funding over the next 10 
years that is on average three times what has been spent in the 
past. Further, the State is pushing for more stringent soil 
cleanup levels than DOE had planned for. If DOE receives less 
funding than assumed and/or eventually adopts the more 
stringent cleanup level, overall costs will grow.
    The Congress and other stakeholders undoubtedly have 
expected that when the current cleanup plan has been completed 
the site will be clean. It will not. The plan does not include 
cleaning up nearly 1 million cubic feet of contaminated waste 
and scrap and 104 areas known as DOE material storage areas, or 
DMSAs.
    As you can see from the pictures, there are barrels of 
waste, contaminated process equipment and scrap metal. Some are 
stored indoors, some are stored outdoors. The plan also does 
not include 16 unused buildings and structures that were 
originally part of the enrichment process. Some of the DMSAs 
pose a risk to the workers. DOE has announced they have 
assessed 11 of these areas and found them to be safe, but that 
is only about 10 percent of the 73 areas at risk.
    In addition, before the site can be considered clean DOE 
will need to address almost 500,000 tons of depleted uranium 
stored on the site as well as decontaminate and decommission, 
or D&D, the uranium enrichment plant once operations cease. 
While no cost estimate has been developed for cleaning up the 
DMSAs or the 16 buildings, DOE estimates that addressing the 
depleted uranium and D&D may cost up to $3.4 billion.
    Subsequent to our report, DOE announced an integrated 
sitewide plan that will address all aspects of the site 
requiring cleanup as we recommended. We look forward to this 
plan as a first step in describing the full scope and cost of 
the actual cleanup task at hand and expect that DOE will use 
this plan to analyze on a comprehensive sitewide basis the 
risks and set priorities for cleanup.
    Let's turn to Savannah River. In 1983, DOE selected ITP to 
separate high level waste from the 34 million gallons of liquid 
waste stored at the site. DOE estimated that it would take 
about 3 years and $32 million to correct the facility. In 
February 1998, after about a decade of delays and spending 
almost a half a billion dollars, DOE suspended the project 
because it did not work safely and efficiently as designed.
    Let me spend a few minutes describing some of the problems 
that contributed to the failure of this project. Contractor 
management and DOE oversight of the contractor was ineffective 
and resulted in ITP problems not being adequately dealt with. 
For example, a DOE technical review team called the Red Team 
reported in 1993 that the contractor tended to react to 
problems after they occurred rather than working to prevent 
them in the first place. The team also found that DOE lacked 
the necessary personnel for adequate oversight and as a result 
DOE's guidance and responsiveness to the contractor was 
limited.
    Further, although DOE identified weaknesses in contractor 
management in 14 of 16 evaluations of the contract over 8 
years, problems continued. In addition, although DOE contractor 
and GAO reports all describe the risks and problems associated 
with designing and constructing the facility concurrently, DOE 
pushed ahead believing that any problems could be solved later. 
They were wrong. The management and oversight issues that I 
have described resulted in allowing the project to continue 
over 10 years, even though the cause of the technical problem 
that makes the process unworkable, benzene generation, was not 
understood.
    As you can see from our time line, during the development 
of ITP, GAO in 1992, DOE's Red Team in 1993, and a 
recommendation from the Defense Nuclear Facilities Safety Board 
in 1996 all raised concerns about the workability of the ITP 
process. After formally suspending the process in 1998, DOE 
began a process to select an alternative technology. It is 
studying four alternatives and plans to decide on the preferred 
alternative in June 2001.
    However, in the fall of 1999 in an interim report on DOE's 
selection process the National Research Council made a number 
of observations. They make it clear that the same problems that 
the ITP project had, that I described to you this afternoon, 
continue. For example, the Council found that Westinghouse 
still lacked an adequate understanding of the chemistry of the 
process it was developing to replace ITP. The Council had noted 
that to move ahead without adequate R&D carries a high 
technical risk and could result in a repeat of the ITP failure. 
As a result, as Dr. Huntoon mentioned, DOE has decided further 
R&D on each alternative was required to reduce the technical 
uncertainty.
    Dr. Huntoon also mentioned that she felt that they were on 
the right road in terms of R&D. We found that the Council's 
report maybe found a bump in that road. The report notes that 
there was no well thought out R&D plan and that DOE and 
Westinghouse, when questioned by the Council, were unable to 
describe an R&D scope that would resolve outstanding issues. We 
understand that an R&D plan now exists, but the lack of good 
planning really seems to have cost them a year without a sound 
R&D plan to move forward. The other question that comes to mind 
is why did DOE have to be told by the Council that these 
situations were occurring.
    In summary, Mr. Chairman, the issues we have raised today 
concerning these two projects illustrate the types of issues 
that we have raised in the past about DOE activities. For 
example, we reported to the Congress in January 1999 that DOE 
has had difficulty completing large projects on time and within 
budget, DOE contract management remains vulnerable to risks, 
and DOE staff lacked technical and management skills. While DOE 
has made improvements in all of these areas, many of the issues 
are at the heart of DOE's culture as an organization and will 
take time and focused management attention to change. Continued 
oversight by this and other committees will continue to 
spotlight the progress made and challenges ahead to ensure that 
DOE continues to improve.
    Thank you, Mr. Chairman.
    [The prepared statement of Gary L. Jones follows:]

   Prepared Statement of Gary L. Jones, Associate Director, Energy, 
   Resources, and Science Issues, Resources, Community, and Economic 
        Development Division, U.S. Government Accounting Office

    Mr. Chairman and members of the Task Force, we are pleased to be 
here today to discuss management, oversight, and other challenges that 
the Department of Energy (DOE) faces in its efforts to clean up 
radioactive and hazardous materials at the Paducah, Kentucky, uranium 
enrichment site and to remove high-level radioactive waste from more 
than 34 million gallons of liquid waste stored at its Savannah River, 
South Carolina, site. DOE faces a number of challenges and 
uncertainties at Paducah as it attempts to address about 10 billion 
gallons of groundwater contaminated with radioactive and hazardous 
materials, contaminated surface water that is in creeks and ditches and 
leaves the site, contamination in soils that may be spread by rain, 
tons of buried waste, and the equivalent of about 52,000 barrels of 
waste stored on the site. From 1988 though 1999, DOE spent about $388 
million on the Paducah site's cleanup and plans to spend another $1.3 
billion over the next 10 years. At Savannah River, we focused on 
identifying the factors that caused delays and cost growth of the in-
tank precipitation (ITP) project. In 1983, DOE selected the ITP process 
to remove high-level waste from the 49 underground tanks. DOE estimated 
that the construction of the ITP facility would be completed in 1988 at 
a cost of $32 million. After years of delay and spending about a half 
billion dollars, in February 1998, DOE suspended the project because it 
would not work safely and efficiently as designed--large amounts of 
explosive, toxic benzene gas were produced by the process. Soon after 
the suspension, DOE began a process to find an alternative technology 
to replace the ITP project. The Department has narrowed the selection 
to four technologies.
    Our testimony today is based on our April 28, 2000, report on the 
Paducah cleanup and our April 30, 1999, report on the ITP project at 
the Savannah River Site.\1\ Our testimony describes the challenges and 
uncertainties facing DOE in cleaning up the Paducah site and the 
effectiveness of DOE's oversight and management of the ITP project. Our 
summary follows:
---------------------------------------------------------------------------
    \1\ See ``Nuclear Waste Cleanup: DOE's Paducah Plan Faces 
Uncertainties and Excludes Costly Cleanup Activities'' (GAO/RCED-00-96, 
Apr. 28, 2000) and Nuclear Waste: Process to Remove Radioactive Waste 
From Savannah River Tanks Fails to Work (GAO/RCED-99-69, Apr. 30, 
1999).
---------------------------------------------------------------------------
     DOE expects to complete the cleanup of the Paducah site by 
2010 at a cost of about $1.3 billion. However, numerous technical, 
funding, and regulatory uncertainties present challenges to DOE's 
ability to complete the cleanup within this time frame and cost 
estimate. For example, technical uncertainties include the planned use 
of technologies that are unproven or perhaps not well suited to the 
site's conditions. If they do not work as planned, or at all, costs 
will increase. In addition, even when the planned cleanup has been 
carried out, billions of dollars and many years will be needed to 
address areas at the Paducah site that are not in the cleanup plan. For 
example, the plan does not include cleaning up nearly 1 million cubic 
feet of waste and scrap in areas known as DOE Material Storage Areas 
(DMSA) and 16 unused and inactive buildings and structures. Some of the 
waste and scrap material pose a risk of an uncontrolled nuclear 
reaction that could threaten worker safety.\2\ By not including these 
areas in the plan, the Paducah cleanup managers cannot assess risk or 
plan cleanup on a comprehensive, sitewide basis. Therefore, the picture 
of the cleanup task at hand is distorted.
---------------------------------------------------------------------------
    \2\ In this case, an uncontrolled nuclear reaction could produce a 
burst of radiation that generally lasts several hours; it is, however, 
a localized event that is not expected to result in an explosion or 
release of radioactivity into the atmosphere.
---------------------------------------------------------------------------
     A number of management and oversight problems caused DOE 
and Westinghouse Savannah River Corporation (Westinghouse), DOE's 
contractor, to spend almost a half billion dollars and to take about a 
decade before deciding that the ITP process would not work safely and 
efficiently as designed. For example, in 1993, a technical review team 
reported that the contractor tended to react to problems after they 
occurred, rather than working to prevent them in the first place. The 
team also found that DOE lacked the necessary personnel for adequate 
oversight. Moreover, DOE and the contractor encountered delays in 
starting up the ITP facility because they had begun construction before 
the design of the process was completed. DOE and the contractor also 
did not adequately understand the cause of the technical problems--such 
as a lack of understanding of the chemistry involved in the ITP 
process--that made the process unworkable. Some of the problems that 
led to the ITP failure may have continued in DOE's efforts to find an 
alternative. According to an October 1999 National Research Council 
report, a lack of understanding of the chemistry involved in the 
process continues, and the contractor appears to be focusing on an 
engineering solution on the basis of untested assumptions.\3\
---------------------------------------------------------------------------
    \3\ See ``Interim Report--Committee on Cesium Processing 
Alternatives for High-Level Waste at the Savannah River Site,'' 
Committee on Cesium Processing Alternatives for High-Level Waste at the 
Savannah River Site, National Research Council (Oct. 14, 1999). The 
National Research Council, as the principal operating agency of the 
National Academy of Sciences and the National Academy of Engineering, 
provides the government, public, and scientific and engineering 
communities with services and research.
---------------------------------------------------------------------------

       Challenges and Uncertainties Face DOE in Paducah's Cleanup

    In 1988, radioactive contamination was found in the drinking water 
wells of residences near the Federal Government's uranium enrichment 
plant in Paducah, Kentucky.\4\ In response, DOE began a cleanup program 
to identify and remove contamination in the groundwater, surface water, 
and soils located within and outside the plant's boundaries. Sources of 
the hazardous chemical and radioactive contamination included spills, 
leaks from contaminated buildings, buried waste, scrap yards, and waste 
lagoons. From 1988 though 1999, DOE spent about $388 million on cleanup 
efforts.
---------------------------------------------------------------------------
    \4\ A private company, the United States Enrichment Corporation, 
operates the plant today under lease and produces enriched uranium for 
nuclear power plants.
---------------------------------------------------------------------------
    DOE's plan for cleaning up the site includes activities, costs, and 
schedule that are estimated to cost about $1.3 billion from fiscal year 
2000 through fiscal year 2010. We identified a number of challenges to 
accomplishing the current cleanup plan, including uncertainty about the 
nature and extent of contamination, technical risks, and optimistic 
assumptions about funding and regulatory approvals. In addition, even 
when the cleanup identified in the plan is complete, billions of 
dollars and many years will be required to address items not included 
in the cleanup plan--such as about 1 million cubic feet of waste and 
scrap material in DOE Material Storage Areas.

 DOE Plans to Clean Up Six Major Categories By 2010 at a Cost of About 
                              $1.3 billion
    DOE's January 26, 2000, Paducah cleanup plan focuses on six major 
categories of cleanup. The first category is groundwater contamination. 
About 10 billion gallons of groundwater contaminated with radioactive 
and hazardous materials are flowing toward the Ohio River. For example, 
trichloroethene (used as a degreaser and called TCE) has been found in 
the groundwater at levels of up to 700,000 parts per billion; far in 
excess of the Environmental Protection Agency's (EPA) drinking water 
standard of 5 parts per billion. As interim measures, DOE has connected 
nearby residences to municipal drinking water and constructed a system 
to pump some of the contaminated water out and treat it.
    The second category is surface water contamination in surrounding 
creeks and ditches. One of the main sources of this contamination is 
the thousands of tons of contaminated scrap metal stored at the plant. 
During rainstorms, contamination washes from the scrap metal, and the 
runoff carries contaminated soils and sediments into the ditches and 
creeks. By the end of 2000, DOE plans to have removed that portion of 
the contaminated scrap metal called ``Drum Mountain,'' which is made up 
of about 8,000 tons of crushed drums that contained depleted uranium. 
But, after the crushed drums are removed, 57,000 tons, or 88 percent, 
of the total amount of scrap metal on site will still have to be 
removed. DOE also plans to dredge ditches and creeks and install basins 
to catch the contaminated water so it can be treated.
    Under the third category, DOE has identified 72 areas with 
contaminated surface soils and has taken interim measures, such as 
installing erosion control fences, to prevent further migration of the 
contamination; the Department plans to excavate and dispose of about 
35,000 cubic yards of soil. The fourth category includes 12 waste 
burial grounds containing a variety of radioactive and hazardous 
contaminants, including arsenic, beryllium, and polychlorinated 
biphenyls (PCBs). DOE is planning to excavate four or five of these 
areas and install a protective cover, or cap, over the remaining areas. 
The fifth category is the equivalent of 52,000 barrels of hazardous and 
low-level radioactive waste stored in various locations on-site--almost 
25 percent of the barrels are stored outdoors and are deteriorating. 
Before it can ship this waste offsite, DOE must determine the nature 
and extent of the waste's contamination and repack most of the barrels 
to make them suitable for disposal. Under the sixth and last category, 
two buildings that were used in the uranium enrichment process until 
1977, which are heavily contaminated, will be decontaminated and 
removed.

       DOE Faces Challenges in Achieving Its Paducah Cleanup Plan
    DOE faces many challenges to completing its cleanup within planned 
costs and schedules. Uncertainties about the extent, source, and nature 
of contamination yet to be cleaned up could increase cleanup costs. For 
example, the full extent of contamination in the surface water and 
soils within and outside the plant boundaries remains to be determined 
and could affect cleanup strategies and costs. While Kentucky prefers 
the installation of eight or nine sedimentation basins as part of the 
surface water cleanup, DOE has only budgeted for four.
    Furthermore, uncertainties exist about the feasibility of available 
cleanup technologies. Some of the technologies are new, and others 
remain untested for the specific environment found at Paducah. For 
example, EPA officials told us that difficulties with steam injection--
which DOE plans to use to treat the source of groundwater 
contamination--were encountered at another site, and there are 
questions about whether the technology will work at Paducah because of 
the site's complex geologic formation. DOE's ability to treat the 
contaminated groundwater is also uncertain. DOE plans to install about 
4,000 feet of permeable treatment barriers across the paths of the 
highest concentrations of contamination. Installing the barriers 
involves injecting a gelatinous, gummy substance containing iron 
filings into the aquifer at depths of about 120 feet. The technology is 
quite new, and the potential for its success at Paducah is uncertain. 
For example, if groundwater flows too quickly through the barrier and 
thus spends too little time in the treatment zone, the barrier may not 
have enough time to fully treat the TCE. In that case, the actions of 
the barrier's treatment zone could change the TCE to vinyl chloride, 
which is even more toxic.
    In addition to the technical uncertainties, the cleanup plan is 
built on some optimistic financial assumptions. The plan assumes that 
Federal funding for cleanup at Paducah will increase to an average of 
$124 million annually over the next decade--ranging from $78 million in 
2001 to a high of $307 million in 2008--compared with the annual 
average funding of $43 million over the last 7 years.
    The plan also includes optimistic assumptions about quickly 
reaching agreement with the regulators on cleanup levels, strategies, 
and priorities. In the past, regulators have disagreed with some of 
DOE's proposed approaches. For example, Kentucky objected to DOE's 
cleanup of PCBs in soils to EPA's standard of 25 parts per million for 
unoccupied space, saying that it wanted the soil cleaned up to 1 part 
per million. The more stringent EPA standard would allow for industrial 
or residential use. The resolution of this issue has been deferred 
until DOE submits its plans for surface water cleanup. If DOE receives 
less funding than assumed and/or eventually adopts a more stringent 
cleanup level than currently planned, total costs to complete the 
overall cleanup will grow.

DOE's Cleanup Plan for Paducah Does Not Address All Areas That Require 
                                Cleanup
    Even when DOE completes the cleanup that it has planned, billions 
of dollars and many years will be needed to address areas at the 
Paducah site that are not included in the cleanup plan because they 
fall under the purview of a different departmental program.\5\ The plan 
excludes nearly a million cubic feet of waste and scrap contained in 
148 DMSAs located across the site. Materials in these areas include 
thousands of barrels of low-level radioactive waste, PCB waste, and 
asbestos waste; contaminated equipment; various items and containers 
whose contents are unknown; and scrap metal. DOE has not yet determined 
the exact nature and extent of contamination in these areas, but it has 
identified 73 of them as posing a risk of an uncontrolled nuclear 
reaction. In this case, such a reaction might produce a burst of 
radiation that generally lasts several hours but is not expected to 
result in an explosion or release of radioactivity into the atmosphere. 
At the time of our report, DOE officials said they planned to pay 
nearly $5 million to conduct a nuclear criticality safety review on the 
10 DMSAs posing the highest risk.
---------------------------------------------------------------------------
    \5\ The cleanup program is the responsibility of DOE's Office of 
Environmental Management, while the Office of Nuclear Energy, Science, 
and Technology is responsible for maintaining the site's 
infrastructure.
---------------------------------------------------------------------------
    The cleanup plan also does not address 16 unused buildings and 
structures that were originally used as part of the enrichment process. 
These buildings and structures, as well as the DMSAs, are excluded from 
the plan not because they require no action but because they fall under 
a different departmental program--the Office of Nuclear Energy, 
Science, and Technology. DOE officials told us that they are hesitant 
to transfer any more areas to the Office of Environmental Management, 
the office responsible for cleanup, because this office already has a 
large workload and funding for cleanup is limited.
    In addition, before the site can be considered clean, DOE will need 
to address almost 500,000 tons of depleted uranium stored on site as 
well as decontaminate and decommission the uranium enrichment plant, 
when it ceases operation. DOE estimates that it may cost between $1.8 
billion and $2.4 billion to convert the depleted uranium to a more 
stable form and remove it from the site. In addition, according to 
DOE's January 1998 estimate, another $1 billion would be needed for 
final decontamination and decommissioning activities when the United 
States Enrichment Corporation ceases operations at Paducah and the 
plant is returned to DOE.
    To ensure that cleanup risks and priorities are established on a 
comprehensive, sitewide basis and that a more comprehensive picture of 
the cleanup is presented to the Congress, our April report recommended 
that the Secretary of Energy transfer the responsibility for the DMSAs 
and the unused buildings and structures from the Office of Nuclear 
Energy to the Office of Environmental Management. We also recommended 
that DOE address in the cleanup plan, regardless of the current 
organizational responsibility, any and all materials at the site that 
are potential health hazards and reexamine the sitewide contamination 
risks and cleanup priorities, costs, and schedules. In response to our 
recommendations, DOE officials announced, in July 2000, that it will 
prepare an integrated sitewide plan that will address all aspects of 
the site requiring cleanup. However, it has not transferred the 
responsibility for these areas to the Office of Environmental 
Management. Without doing so, it will be more difficult to establish 
priorities and conduct the cleanup in a comprehensive manner.

      ITP Fails To Work After 10 Years and a Half Billion Dollars

    The ITP process was selected in 1983 as the preferred method for 
separating high-level waste from the 34 million gallons of liquid waste 
stored at the Savannah River site--a step considered necessary to 
effectively handle this large quantity of waste. In 1985, DOE estimated 
that it would take about 3 years and $32 million to construct the ITP 
facility. After a number of delays, the ITP facility was started up in 
1995, but safety concerns about the amount of explosive, toxic benzene 
gas that the facility generated halted start-up operations. In February 
1998, after about a decade of delays and spending almost a half billion 
dollars, DOE suspended the project because it did not work as safely 
and efficiently as designed. DOE then directed that its contractor 
begin a process to identify and select an alternative technology. 
Although originally expected to be completed in the fall of 1999, that 
selection process continues today with additional research and 
evaluations being made on four alternatives. DOE's plan calls for 
making a decision on the preferred alternative in June 2001.
    A number of factors combined to cause DOE and Westinghouse to spend 
almost a half billion dollars and take about a decade to decide that 
the ITP process would not work as safely and efficiently as designed. 
First, because of ineffective DOE and contractor management and 
oversight during the 1980s and early 1990s, ITP problems were not being 
adequately dealt with. In addition, DOE and the contractor experienced 
difficulty managing the project's start-up operations. Furthermore, 
there was limited oversight and visibility of the project because of 
the budgetary treatment it received. Lastly, the ITP process and the 
generation of toxic, explosive benzene were not fully understood.

   Weaknesses Existed in Contractors' Management and DOE's Oversight
    The principal factors contributing to the delays and increased 
costs of the project were ineffective management and oversight by DOE 
and its operating contractors. A number of these problems were noted in 
1993 by a DOE technical review team (referred to as the Red Team) that 
examined the project \6\ as well as in semiannual evaluations of 
contractor performance.
---------------------------------------------------------------------------
    \6\ See ``Independent Technical Review of In-Tank Precipitation 
(ITP) at the Savannah River Site,'' DOE Office of Environmental 
Restoration and Waste Management (June 1993).
---------------------------------------------------------------------------
    The Red Team reported that the contractor tended to use ``reactive, 
discovery management'' to react to problems after they occurred, rather 
than working to prevent problems in the first place. It found that this 
approach resulted in a high potential for inadequate process 
development, lengthening the project, and increasing its costs. The Red 
Team also reported that DOE oversight and support functions at the 
Savannah River site were not adequate because DOE lacked the necessary 
personnel. As a result, DOE's guidance and responsiveness to 
Westinghouse, the site contractor, were limited. Finally, the team 
found that DOE's organizational responsibilities appeared unclear and 
the DOE staff were forced to respond in a reactive manner to emerging 
issues.
    Contractor management problems also surfaced repeatedly in the 
semiannual evaluations DOE performed to assess Westinghouse's 
eligibility for award fees. We found that in 14 of the 16 evaluations 
performed from April 1990 through March 1998, DOE identified weaknesses 
needing attention in contractor management or ITP planning activities. 
For example, a 1992 evaluation stated that performance against planned 
work was not adequately monitored and that technical documents had 
deficiencies indicating a lack of management attention. A 1995 
evaluation noted that insufficient resources had been assigned to meet 
the project schedule. In addition, a 1996 evaluation noted that while 
safety concerns about benzene gas from the ITP process was a key issue, 
the implementation of a program to resolve the benzene issue had been 
fragmented and no single manager had been given overall responsibility 
for resolving it.

           Managing the Project's Start-up Posed Difficulties
    The ITP project was managed on a fast-track schedule--concurrent 
design and construction--with an emphasis on pushing ahead in the 
belief that the problems could be solved later. Rather than expediting 
the ITP project, this approach caused a series of delays that prolonged 
the project for 10 years while costs mounted. A number of studies in 
the early 1990s noted this problem, as the following examples show.
     A 1992 Westinghouse management assessment concluded that a 
number of start-up activities were begun prematurely--before the 
foundation for an efficient program was in place.\7\ The key weaknesses 
observed included a lack of a technical baseline and a potential for 
inconsistencies among the project's various activities because they 
were not completely integrated.
---------------------------------------------------------------------------
    \7\ See ``Management Assessment: In-Tank Precipitation Project,'' 
Westinghouse Savannah River Company (Mar. 1992).
---------------------------------------------------------------------------
     Our 1992 report on Savannah River's Defense Waste 
Processing Facility, which included the ITP project, cited the fast-
track management method being used as contributing to the project's 
cost growth. We also stated that there was a risk associated with that 
method, especially when used with unique and complex facilities. We 
recommended that an assessment comparing ITP with an alternative 
technology be made.\8\
---------------------------------------------------------------------------
    \8\ See ``Nuclear Waste: Defense Waste Processing Facility--Cost, 
Schedule, and Technical Issues'' (GAO/RCED-92-183, June 17, 1992).
---------------------------------------------------------------------------
     The 1993 Red Team report noted that the project's start-up 
was not being managed as a first-of-a-kind chemical-processing system. 
It stated that Westinghouse was not following the accepted chemical 
engineering practice of completing process development, demonstrating 
the operability of the process on a pilot scale, and assessing all 
long-term impacts and requirements for sustaining the process before 
beginning plant operations. The Red Team recommended that alternatives 
to the ITP process be considered.
    In response to our 1999 report, Westinghouse acknowledged that the 
risks associated with new applications of existing technologies were 
not managed well on the ITP project--that is, enough time was not built 
into the schedule to allow for the kinds of technical problems that 
arose. DOE Savannah River officials noted that ITP was a first-of-a-
kind process and that because of funding constraints, they were scaling 
up the technology from lab tests to full-scale without the benefit of 
additional test facilities. Furthermore, DOE officials said they 
considered alternatives to ITP as the project progressed. DOE said it 
determined that risks were inherent in ITP and the alternative 
processes but that costs still favored the ITP process, so the project 
proceeded. The DOE Savannah River High-Level Waste Division Director 
said the Department is now attempting to manage the high-level waste 
program, of which ITP is a part, using a systems engineering approach 
that dictates that more testing be done up front.

      Oversight and Visibility Were Limited By Budgetary Treatment
    DOE paid for the ITP project with operating funds that are subject 
to less oversight and visibility than capital construction funds. 
Capital construction projects are subject to periodic reviews and 
reports, and those costing $5 million or more are shown as line items 
in the budget requests that DOE submits to the Congress.\9\ Projects 
paid for with operating funds do not receive such scrutiny. DOE 
officials said they used operating funds for the ITP project because, 
throughout the life of the project, they had expected the technical 
issues to be solved shortly, thus not warranting its conversion to a 
capital construction project, which would be funded as a line item in 
DOE's budget request.
---------------------------------------------------------------------------
    \9\ Prior to fiscal year 1997, capital funded projects costing $2 
million or more were to be shown as budget line items.
---------------------------------------------------------------------------
    This is not a new issue. We raised concerns about this practice in 
our 1992 report, noting that because projects associated with Savannah 
River's Defense Waste Processing Facility were being funded from 
operating accounts, the Congress was not receiving enough information 
to fully understand the magnitude of the continuing cost increases and 
delays.\10\
---------------------------------------------------------------------------
    \10\ See GAO/RCED-92-183, June 17, 1992.
---------------------------------------------------------------------------

    Inadequate Understanding of the ITP Process Extended the Project
    DOE and its contractors did not completely understand the ITP 
chemistry that caused excess benzene to be generated. Earlier in the 
project, the Westinghouse staff at the Savannah River Site identified 
the principal cause of benzene generation as the decomposition of the 
chemical (sodium tetraphenylborate) that was added to the tank waste 
during the ITP process to separate the high-level waste from the liquid 
waste solution. The benzene was thought to become trapped in the 
solution and be released with the addition of water and mixing. In 
1997, after a recommendation by the Defense Nuclear Facilities Safety 
Board, additional research into the chemistry revealed that a catalyst 
or catalysts that produced large amounts of benzene were present in the 
waste solution.
    The contractor based its initial belief on the results of the full-
scale test conducted in 1983 and on subsequent smaller-scale tests. For 
the 1983 test, sodium tetraphenylborate was added to a tank with about 
500,000 gallons of waste. During the test, a good separation of high-
level waste occurred. However, a significant release of benzene was 
also observed--for 6 hours, the benzene levels were higher than the 
level that the instruments in the tank could register. As a result, 
additional studies were conducted.
    According to many DOE ITP project employees with whom we spoke, the 
test in 1983 was viewed as successful and provided credibility for the 
project's technology. However, an ITP engineer told us that the fact 
that the benzene level went over the instrumentation scale for 6 hours 
was not widely known. The test results seemed to have been forgotten 
over time. For example, two ITP project managers involved with the 
project since 1997 told us they were unaware of this aspect of the 
test.
    During the development of the ITP process, we and the Red Team 
raised concerns about unresolved technical issues and the level of 
understanding the ITP process, as shown in the following:
     Our 1992 report raised concerns about the ITP process's 
unresolved technical issues and delays and recommended that the 
Secretary of Energy direct that an assessment of an alternative 
technology (ion-exchange process) be prepared to determine whether DOE 
should replace the ITP process.\11\
---------------------------------------------------------------------------
    \11\ See GAO/RCED-92-183 (June 17, 1992).
---------------------------------------------------------------------------
     In 1993, the Red Team noted that the chemistry of the ITP 
process was not adequately understood and that the ITP process appeared 
to cause more problems than it solved. These problems included a need 
to control benzene emissions; increased flammability risks; increased 
risk from aerosols, foams, and respirable particulates; increased 
chemical reactivity of high-level waste, leading to possible 
explosions; and the introduction of extremely complex organic 
chemistry.
     The Red Team also questioned whether the chemical used in 
the ITP process--sodium tetraphenylborate--was the best way to remove 
cesium from the liquid waste. It concluded that effective technologies 
were available and could be implemented. It noted that if the state 
environmental regulators adopted a more restrictive benzene emissions 
policy, the entire high-level waste complex, as well as the Savannah 
River Site itself, would be better served by a thorough reevaluation of 
alternative technologies.
    In response to our 1999 report, DOE Savannah River officials told 
us that they considered the concerns raised but did not change their 
approach for a number of reasons. In their view, in 1992 and 1993, ITP 
was considered to be the best technology available for the type of 
high-level waste at the Savannah River Site. In addition, they believed 
that they understood the benzene generation problems and thought the 
problems had been identified, evaluated, and resolved. A number of 
modifications were made to the ITP facility, primarily to address the 
generation of benzene and to meet the more stringent safety standards 
that were adopted for all DOE facilities. Throughout this period, DOE 
Savannah River officials said that they considered the ITP process to 
have the lowest technical risk and the lowest cost of all the 
alternatives.

           DOE is Evaluating Four Alternatives to Replace ITP
    Although pointed out by the Red Team, the Defense Nuclear 
Facilities Safety Board, and us, the lack of understanding of the 
chemistry of the ITP process may plague the selection of the 
replacement for ITP. In the fall of 1999, the National Research Council 
released an interim report on the alternative processes being 
considered for the high-level waste at the Savannah River site. 
Regarding one of the alternative technologies, called small-tank 
precipitation, which basically uses the same chemical to separate the 
high-level waste as the ITP process does, the report found that 
Westinghouse lacked an adequate understanding of the chemistry 
underlying the process responsible for benzene generation. The Council 
further reported that in place of such an understanding, Westinghouse 
appeared to be focusing on an engineering design solution that was 
based on untested assumptions about maximum likely benzene production. 
The Council believed it would be advantageous in terms of time and cost 
to undertake this research and development work before the process 
might be selected and deployed. The alternative--namely, to proceed 
with deployment immediately and engineer around the gaps in chemistry 
knowledge--carries a high technical risk and could result in a repeat 
of the ITP failure. As a result of the National Research Council 
report, DOE decided that further research and development on each 
alternative was required to reduce technical uncertainty prior to 
selecting a preferred alternative.
    The National Research Council's report also suggests that 
Westinghouse may have a bias for its process, which is the small-tank 
precipitation alternative. The Council reported that the research and 
development resource allocations have been markedly inequitable for the 
four alternative processing options that DOE and the contractor are 
considering. It said that this funding disparity appears to be 
primarily responsible for the different levels of technical maturity of 
the four processing options, independent of their likelihood of 
success. The Council found in its discussions with the contractor and 
DOE staff that the contractor did not appear to be serious about 
pursuing research and development on any option but small-tank 
precipitation. These concerns were addressed when DOE removed research 
and development management responsibility from Westinghouse for the 
other options in October 1999 and limited its responsibility to the 
small-tank precipitation process. Although the Secretary of Energy had 
announced in April 1999 that a new contractor would be sought to 
continue work on separation processes at Savannah River, Westinghouse 
remained responsible for research and development on all the 
alternatives until October 1999.
    In addition, DOE officials told us that first, DOE has developed an 
action plan and project schedule that includes the steps necessary for 
choosing a preferred alternative by June 2001 and designing, 
constructing, and operating the facility by 2010; second, DOE is 
developing selection criteria that will be used to pick the preferred 
alternative, which may include such factors as technical maturity, 
risk, life-cycle cost, and implementation confidence; and third, DOE is 
using a technical working group to oversee the research and development 
being undertaken.
    In summary, Mr. Chairman, the issues we have raised today 
concerning these two projects illustrate the types of issues that we 
have raised in the past as part of the major performance and management 
challenges at DOE. For example, we reported to the Congress in January 
1999 that DOE has difficulty completing large projects on time and 
within budget, that DOE contract management remains vulnerable to risk, 
and that DOE's staff lack technical and management skills.\12\ These 
were touched on in the examples we provided today. While DOE has made 
improvements in all these areas, many of the issues are at the heart of 
DOE's culture as an organization and will take time and focused 
management attention to change. Continued oversight by this and other 
committees will continue to spotlight the progress made and challenges 
ahead to ensure that DOE continues to improve.
---------------------------------------------------------------------------
    \12\ See ``Major Management Challenges and Program Risks: 
Department of Energy'' (GAO/OCG-99-6, Jan. 1999).
---------------------------------------------------------------------------
    Mr. Chairman, this concludes our prepared statement. We will be 
pleased to respond to any questions that you or members of the 
committee may have.

    Mr. Radanovich. Thank you very much. I appreciate you 
leaving me time to go vote as well. We will recess this hearing 
and apologize. We have three votes. But I will be back just as 
soon as I can. Thank you for your patience.
    [Recess.]
    Mr. Radanovich. We are back in session and thanks again.
    Ms. Jones, I will ask a series of questions about all three 
projects, and if you care to respond, I would appreciate it.
    Ms. Jones. OK.
    Mr. Radanovich. How would you compare the management and 
oversight problems by DOE in the handling of Savannah ITP 
projects compared to problems that you have reported on in the 
past? How are they different from in the past?
    Ms. Jones. The kinds of management problems that we saw at 
Savannah River for ITP are similar to what we have seen in a 
lot of other projects throughout our work at DOE. We saw lack 
of technical expertise at Hanford and at other places. The fact 
that you have an organizational structure that doesn't give you 
clear lines of accountability, so therefore the contractors 
really are not held accountable. We have seen that at Lawrence 
Livermore and Hanford and a number of different sites. So they 
are similar types of problems.
    Mr. Radanovich. Reoccurring?
    Ms. Jones. Yes, sir.
    Mr. Radanovich. You said DOE has failed to respond to our 
reports that highlight management weaknesses. When you look at 
the changes that DOE has made at Savannah and other complexes, 
do they give you confidence that we will not be here a year 
from now with more unscheduled delays and finger pointing?
    Ms. Jones. While DOE has made some progress in this area, 
we have noted recently, let me give you two examples. Looking 
at ITP, while I think the DOE witnesses told you they have made 
some changes in terms of their organizational structure for the 
ITP oversight, you basically have Dr. Huntoon, who is going to 
be making the decisions. That is a positive thing. It is also 
positive that DOE brought in the National Research Council. But 
when you look at the lines of accountability, it seems to me 
that it is being managed on a day-to-day basis by a technical 
working group, which is four people. Who is really accountable 
there? You have two laboratories involved and you have the 
operations office at Savannah River who is also involved. If 
something went wrong, who is accountable on a day-to-day basis? 
We also did a report looking at the tank waste project at 
Hanford in 1998 and talked about problems there in terms of 
lack of technical skills and oversight and just this last year 
an internal group saw the same kinds of problems. So, like 
Savannah River, there had been no move forward to try to make a 
change there.
    Mr. Radanovich. In June 1999, reporting in the wake of the 
Wen Ho Lee spy case, the President's Foreign Intelligence 
Advisory Board said that the board is extremely skeptical that 
any reform effort no matter how well designed and effectively 
applied will gain more than a toehold at DOE given its 
labyrinthine management structure, its fractious and arrogant 
culture and its fast-approaching reality of another transition 
in DOE leadership.
    Do you agree with that view? Are you confident that the 
cycle of problems has been stopped?
    Ms. Jones. I am not confident that the cycle has stopped. 
Our past work at DOE has shown while they will react to the 
situation and put a plan in place, those plans are not always 
carried out. We will come back a couple of years later and see 
the same kinds of things are going on. There is a culture where 
there needs to be some change in terms of holding DOE employees 
and contractors accountable. I am not sure any changes put in 
place recently will solve that problem. The Secretary has put a 
killer clause in the DOE contracts where they can take away all 
of the fee, but I don't think that DOE has shown that they have 
the will to do that over time. They wait until something 
egregious happens and then they take it away rather than doing 
it all along to direct the contractor in the right way.
    Mr. Radanovich. Moving on to Savannah River, after about 10 
years and $488 million, what does DOE have to show for its 
efforts regarding the treatment and disposal of the high level 
nuclear waste there at Savannah? Have we gotten our money's 
worth?
    Ms. Jones. We know that the ITP process produces a lot of 
benzene. They still have a lot of R&D work to be done. The 
National Research Council report states that all three of the 
processes that they are looking at still require research and 
development, and we think that now that there is a plan in 
place, they can move forward and do the research that they need 
to make a good decision.
    Mr. Radanovich. DOE's own documents indicate the potential 
for leaking at the tanks is real. In fact there has been a tank 
leak already. What confidence do you have that the Department 
is taking adequate steps to ensure the stability and safety of 
the tank farm?
    Ms. Jones. We haven't looked at the issue of the leaking 
tanks at Savannah River, so I wouldn't be able to comment on 
that.
    Mr. Radanovich. What are the potential costs associated 
with taking additional steps to prevent leaking if there are 
additional delays in the project?
    Ms. Jones. I don't know about the leaking tanks. I do know 
if there is a delay in the project, you do still have high 
level waste being created that they are going to have to find a 
place to put it. At some point in time in the future they are 
not going to have a place and they will have to use old tanks, 
which have the potential for leaking and have to be 
retrofitted, or build new tanks which will also increase the 
cost. There is an issue of the timing of them; being able to 
develop this new process is critical.
    Mr. Radanovich. Can you venture to say how much percentage-
wise the $488 million, how much was effectively spent and how 
much might have been a waste?
    Ms. Jones. I don't know if I can characterize it from a 
dollar standpoint. What I would say is that 10 years seems to 
be a very long time to keep after the same technical issue. It 
seems, again hindsight is 20/20, but they had a lot of people 
telling them, as you can see from our timeline, that there was 
an issue and they seemed to believe that resolution was right 
around the corner. If they had stopped earlier, that would have 
helped.
    The other issue is that we had been told a number of years 
ago when one of the other processes now being considered was 
being developed through DOE's innovative technology program, 
Savannah River was approached as well as other sites and asked, 
do you think this might work for your vitrification process? 
Savannah River said, no, we are going to go with ITP. Maybe if 
they had listened several years ago, they would have been 
further along in developing that process for Savannah River.
    Mr. Radanovich. Correct me if I'm wrong, but the map behind 
the poster to the left was a cleanup site of Savannah River, 
wasn't it?
    Ms. Jones. No, the map that we had up was Paducah. That was 
to show the plumes of ground contamination at Paducah.
    Mr. Radanovich. I did have a question regarding that one. 
We will move to Paducah. A couple of questions. Figuratively 
speaking, how many drum mountains are out there? How many DOE 
sites have major environmental problems not generally known to 
the public like this?
    Ms. Jones. I am not sure that I can answer that, Mr. 
Chairman. Certainly DOE has a lot of characterization to do at 
a number of their sites. I think this is a very complex 
undertaking. I know that at a hearing a week ago, when the 
Department of Energy was asked how many buildings and 
facilities were not part of the plan, they couldn't tell the 
committee the answer. So I don't know the answer to that.
    Mr. Radanovich. Is funding just the issue on this? I know 
that one of the testifiers was reacting to the fact that they 
had just gotten some funding. Is this strictly a funding issue?
    Ms. Jones. I am not sure that it is strictly a funding 
issue. While their plan assumes that they need more money, I 
think we have to look at the plan because from a technical 
standpoint, they are looking at several technologies that are 
innovative. So just throwing more money before they demonstrate 
their groundwater technologies may not be a good thing to do. 
Some of this cleanup has to be sequenced. You have to do 
certain things before you do other things. So again, I would 
want to look very closely at their budget submissions to see 
that they could effectively spend increased funds.
    Mr. Radanovich. On the map you show black dots forming a 
square around the site. That is a barrier that has been 
installed. Was that to further prevent the plumage that has 
taken place there?
    Ms. Jones. No. The treatment barriers are actually the blue 
lines. The plume is the yellow and the dark red going out, and 
there is a blue line that goes across those. Those are the 
projected treatment barriers. They only have one installed, a 
small one, that they are trying to demonstrate whether the 
technology will work at Paducah.
    Mr. Radanovich. But it just prevents the plume from moving 
any more?
    Ms. Jones. That's correct, it prevents contamination from 
moving because it's designed to clean the water. There is stuff 
on the other side of the barrier that will continue to go to 
the river.
    Mr. Radanovich. There is no plan to deal with that?
    Ms. Jones. That's correct.
    Mr. Radanovich. So the plan is just preventing more 
leakage?
    Ms. Jones. It is trying to clean up the groundwater that 
will be coming through at some point in time. The stuff that 
has already passed those barriers will not be treated.
    The other problem is that they have--the source of the 
groundwater contamination is also very difficult to clean up. 
It is TCEs at the bottom of the aquifer, and they are going to 
try to extract them, but that is also a technology that they 
are trying to demonstrate. Unless they can get that source out, 
it is going to continue to contaminate the groundwater over 
time.
    Mr. Radanovich. What are the black dots?
    Ms. Jones. That is the plant fence. I had to ask to make 
sure that I was right.
    Mr. Radanovich. Which is not stopping much.
    One more question. In your report you characterize DOE's 
approach to their efforts to reach an agreement with the EPA 
and the State on issues as optimistic. This optimism you say 
makes it uncertain that the cleanup can be done within the time 
frame and cost. Can you give us an example?
    Ms. Jones. There are a couple of examples. One is the 
sedimentation ponds. Basically the State wanted to have, I 
think it is about seven, and DOE is only budgeted for four. So 
if the State gets what they would like to have, DOE is going to 
have to put more money in for that.
    On soil contamination, right now DOE is assuming that they 
are going to clean up to EPA standards of 25 parts per billion, 
which is for unoccupied space, and the local community and the 
State is saying we want it 1 part per billion, which is 
residential and industrial. So they are putting off that 
decision until they come up with their plan.
    Mr. Radanovich. Thank you.
    Mr. Spratt.
    Mr. Spratt. Thank you very much. I am sorry that I wasn't 
here earlier. I have followed this for some time and it is not 
surprising. If we go out to Hanford, there are twice as many 
tanks, I believe?
    Ms. Jones. Yes, sir.
    Mr. Spratt. And the chemistry in those tanks is still not 
understood?
    Ms. Jones. That's correct.
    Mr. Spratt. Nobody has a solution. At one time I guess 
Rockwell was the goco at that time. They used ferrous cyanide 
and they had an adverse reaction and it started bubbling 
hydrogen and other explosives and combustible output and scared 
the dickens out of everybody.
    Ms. Jones. That's correct.
    Mr. Spratt. Right now they have a witch's brew at Hanford 
and no progress at all.
    Ms. Jones. They just cancelled the contract with BNFL, who 
was going to go forward and continue the design of that 
process. That project right now is being relooked at. They are 
trying to make a decision in terms of what kind of contract and 
funding they are going to go forward with.
    Mr. Spratt. The good fortune at Savannah River, Dupont were 
the original site contractors and Dupont are--is primarily a 
company of chemists and they understood the chemistry in these 
tanks better than anybody else, frankly. When you look at what 
happened, it is just--to some extent it is a measurement of how 
much we know and how much we are simply taking plunges in the 
dark as we try to resolve this problem.
    To put it into context, the State of South Carolina was 
pressuring Savannah River-Dupont and Savannah River-
Westinghouse because the tanks in South Carolina are single 
lined for the most part. They sit on the top of the Tuscaloosa 
Aquifer. If they established a plume like that, they could not 
only damage the immediate surroundings, they could have 
irreparable damage to one of the larger aquifers in the 
Southeast. So there was lots of pressure on the contractor to 
get something done.
    We funded a defense waste processing facility, and once we 
got it underway, it followed that this process had to be 
brought along in line with it because it was clear to everybody 
we couldn't afford the cost of vitrifying 35 million gallons of 
liquid waste. We had to reduce its volume by a whole order of 
magnitude to make the project sustainable, and that is where 
all of this got started.
    We say there has not been any oversight but I have been 
there half a dozen times, and I have been through this process 
a number of times. I don't know any chemistry, so before I 
would cast any stones at the lack of expertise of DOE, I would 
confess my own lack of expertise. I know that I can learn and 
listen and turn to other people, but it is difficult to follow 
the complexity of this.
    We had a panel created on the Armed Services Committee at 
my instigation because I thought we, Congress, was woefully 
inadequate in our efforts to deal with oversight. The Energy 
and Water Subcommittee of Appropriations was not paying nearly 
as much attention to this as they were to civilian water 
projects, and on the Armed Services Committee we had one or 2 
days of hearings and unless you had a dog in the fight, a 
project that was being funded, you probably didn't come to the 
hearing.
    We put together a panel and we paid more attention 
particularly to the waste cleanup, environmental remediation 
problems than anything else. In fact, we shifted over 3 years 
almost a billion dollars out of the regular defense budget into 
the DOE budget for environmental remediation. We created the 
new Facilities Safety Board because we saw the need for some 
outside oversight.
    The person who probably described as well as anything what 
happened to the whole complex and why, why this accumulation of 
environmental problems, was a man named Richard Meserve in a 
report done for the National Academy of Sciences in the early 
1990s, late 1980s. Basically they laid out very graphically how 
for 40 years production of nuclear materials had trumped 
everything. It had trumped cost considerations, environmental 
considerations; getting the materials ready for the bombs and 
warheads that were being built was imperative. It was a matter 
of national survival, and so few questions were asked other 
than is production on schedule.
    We have inherited that. You can blame a lot of people, but 
that philosophy is probably more to blame than for any single 
individual or lack of due diligence of any contractor in any of 
these processes.
    I simply make those comments. I think you have done an 
excellent job in your report of summarizing what has happened. 
I have followed it from some distance, and I understand it 
better after seeing what you have put together here. But I am 
still about as unclear as to where we go from here as I was 
before I picked up your report and read it.
    Do you have any observations on how soluble this problem 
is, whether or not it can be done for reasonable cost in a 
reasonable period of time?
    Ms. Jones. I don't think that we are going to know that 
until DOE does some more research and development on the 
processes that they are considering. The fact that they have 
widened the span of processes that they are looking at gives us 
pause in terms of maybe there is a solution. I think putting 
some more R&D dollars into it now to know what you are facing 
will give us a lot more confidence as we move forward.
    Mr. Spratt. Wouldn't you agree if the ion exchange 
technology would have been more complicated and less mature 
than this precipitation technology that they opted for?
    Ms. Jones. My understanding at the time they were starting 
to look at all of these processes, in the early eighties, there 
was some issues with the ion exchange. You are correct, it was 
more costly.
    Mr. Spratt. Do you have any opinion about whether or not 
the small tank alternative is a viable alternative?
    Ms. Jones. No, sir, I don't. Not at this time.
    Mr. Spratt. Thank you very much for your work and your 
testimony.
    Mr. Radanovich. I don't have any other questions. If nobody 
else does, this hearing is adjourned. I want to thank you very 
much for coming and also the people who testified before. Thank 
you very much.
    [Whereupon, at 4 p.m., the Task Force was adjourned.]


  Fire Safety Failures of the Park Service: Caretaker of the Nation's 
              Treasures Ineffective in Addressing Hazards

                              ----------                              


                        WEDNESDAY, JULY 19, 2000

                  House of Representatives,
                           Committee on the Budget,
           Task Force on Natural Resources and Environment,
                                                    Washington, DC.
    The Task Force met, pursuant to call, at 10:12 a.m., in 
room 210, Cannon House Office Building, Hon. George Radanovich 
(chairman of the Task Force) presiding.
    Members present: Representatives Radanovich, Herger, 
Gutknecht, and Price.
    Mr. Radanovich. Good morning, and thank you all for being 
here.
    Today's hearing of the Task Force on Natural Resources and 
the Environment will focus on fire safety within our national 
parks. Scheduled burns that rage out of control or catastrophic 
summer fires sparked by cigarettes that destroy thousands and 
thousands of acres of park land have been high profile in the 
news lately. Today though, we are going to discuss a different 
safety issue within the national parks, and that is buildings 
and structures that are used by the public within the national 
parks.
    Over the years, the Federal Government has acquired some of 
the nation's most prime real estate, as well as many of its 
valuable historical and cultural assets and placed them under 
the purview of the National Park Service. In establishing a 
system that promotes access for all people to our national 
treasures, the Federal Government has assumed the 
responsibility of ensuring that they are enjoyed safely.
    Unfortunately, in a report released several weeks ago, the 
General Accounting Office found that the Park Service is not 
doing all it can and should to protect the safety of park 
visitors and employees. Many of the parks that the GAO 
evaluated for the report lacked regular inspections, working 
fire suppression systems, and either their own fire brigades or 
arrangements with local fire companies, conditions that the 
Park Service acknowledges could be found throughout the 379 
unit park system.
    GAO has also cited a 1998 internal Park Service report 
which showed the Service's lack of attention to the issue. The 
internal report said, in part, there is widespread agreement 
that the structural fire program in the National Park Service 
lacks priority and emphasis. There is little acknowledgement at 
the headquarters level of the structural fire program.
    It is incumbent upon the Park Service to ensure two things: 
one, that fires be prevented to the extent possible; and, two, 
that in any case they do happen, there are proper measures in 
place to facilitate a quick and competent response to their 
occurrence. Apparently the Park Service is seeing to neither of 
these issues.
    Joining us today are Jim Wells, who is the Director of 
Energy, Resources and Science Issues at the General Accounting 
Office, and Ms. Maureen Finnerty, the Associate Director of 
Operations and Education at the Park Service.
    Again, thank you to both of you for being with us. Maureen, 
it is good to see you here again, and we look forward to 
hearing what you have to say about this matter.
    I will say, too, that members have five legislative days to 
submit statements and other material for the record, and I 
would like to turn it over to Mr. Price before we hear any 
testimony to see if there is any desire to give an opening 
statement.
    [The prepared statement of Mr. Radanovich follows:]

   Prepared Statement of Hon. George Radanovich, a Representative in 
                 Congress From the State of California

    Good morning and thank you all for being here. Today's hearing of 
the Task Force on Natural Resources and the Environment will focus on 
fire safety within our National Parks. We are not talking about 
scheduled burns that rage out of control, or catastrophic summer fires 
sparked by a cigarette butt that destroy thousands and thousands of 
acres of park land. We are instead going to discuss the safety of the 
structures in our National Parks.
    Over the years the Federal Government has acquired some of the 
nation's most prime real estate, as well as many of its valuable 
historical and cultural assets, and placed them under the purview of 
the National Park Service. In establishing a system that promotes 
access for all people to our national treasures, the Federal Government 
has assumed the responsibility of ensuring that they are enjoyed 
safely. Unfortunately, in a report released several weeks ago, the 
General Accounting Office found the Park Service is not doing all it 
can and should to protect the safety of park visitors and employees. 
Many of the parks that GAO evaluated for their report lacked regular 
inspections, working fire suppression systems, and either their own 
fire brigades or arrangements with local fire companies--conditions 
that the Park Service acknowledges could be found throughout the 379 
unit park system. GAO also cited a 1998 internal Park Service report 
which showed the Service's lack of attention to the issue. The internal 
report said in part ``[T]here is widespread agreement that the 
structural fire program in the NPS lacks priority and emphasis * * * 
There is little acknowledgment at the * * * [headquarters] level of the 
structural fire program.''
    It is incumbent upon the Park Service to ensure two things: one, 
that fires be prevented to extent possible; and two, that in case they 
do happen, there are proper measures in place that facilitate a quick 
and competent response to their occurrence. Apparently, the Park 
Service is seeing to neither.
    Joining us today are Jim Wells, Director of Energy, Resources, and 
Science Issues at GAO; and Maureen Finnerty, Associate Director of 
Operations and Education at the Park Service. Thank you both for taking 
the time to be with us. We look forward to hearing what you have to say 
about this matter.

    Mr. Price. Thank you, Mr. Chairman.
    I appreciate the chance to be here this morning, and I want 
to welcome the witnesses to the Task Force hearing. I look 
forward to your testimony.
    I share with other members of this Task Force the view that 
our Park Service is a great national treasure and that we must 
strive to ensure that we are properly preserving and showcasing 
the natural wonders of this country.
    In that regard, we should certainly work to ensure that 
Park Service facilities are safe for visitors, and that the 
risk of fire is reduced.
    The subject matter for today's hearing bears some 
resemblance to last week's hearing and suggests a certain irony 
with respect to the mission of this Task Force. It is my 
understanding that the common theme in our hearings was to be 
the issue of waste, fraud, and abuse in the Federal Government, 
and that the goal was perhaps to save Federal dollars by 
rooting out such waste, fraud, and abuse. Of course, that is a 
worthy goal which I think is widely shared.
    But one of the primary things we have established in our 
hearings is that effective management of government programs 
requires adequate funding and accurate funding requests. 
Effective management and oversight does not necessarily mean 
that we spend less or that we spend more. It is surely going to 
vary from one program to the next, and the main requirement is 
that we spend intelligently and strategically.
    Effective management requires an accurate assessment of 
when money should be spent. More money spent early in the life 
of a program can save us from spending more later. I think we 
have learned that, and perhaps we will learn that again today.
    In the case of fire safety, more money spent for prevention 
can save us from the cost of catastrophic fire later on.
    Witnesses from the GAO, I realize, may introduce new 
information into today's hearing, but based on what we have 
now, I see no evidence in the GAO report that the Park Service 
is guilty of waste, fraud, or abuse. Instead, I see evidence 
that we and the Park Service must better evaluate the short 
term and long term funding needs of Park Service programs.
    So I look forward to hearing what our witnesses have to 
say, and I hope we can have a good discussion of how Congress 
and the Park Service can work to improve fire safety 
preparedness at our national park facilities.
    Thank you, Mr. Chairman.
    Mr. Radanovich. Thank you, Mr. Price.
    And we will begin with our first and only panel, first off 
with Mr. Wells of the GAO and then from Ms. Finnerty from the 
National Park Service.
    Welcome, Mr. Wells, and please begin your statement.

  STATEMENT OF JIM WELLS, DIRECTOR OF ENERGY, RESOURCES, AND 
SCIENCE ISSUES, RESOURCES, COMMUNITY, AND ECONOMIC DEVELOPMENT 
  DIVISION, U.S. GENERAL ACCOUNTING OFFICE; MAUREEN FINNERTY, 
ASSOCIATE DIRECTOR FOR PARK OPERATIONS AND EDUCATION, NATIONAL 
         PARK SERVICE, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Wells. Thank you, Mr. Chairman and members of the 
committee.
    Once again, we are pleased to be here today to discuss the 
Park Service structural fire safety efforts. Our comments today 
are based primarily on the report that was released in May 2000 
of this year addressing the Park Service's not meeting its 
structural fire safety responsibilities.
    The report itself, the picture that it painted was not very 
pretty, 1,400 structural fires over the last decade. The Park 
Service is a national steward, as was referred to in the 
chairman's comments, for over 30,000 structures, including 
hotels, motels, cabins, visitor centers, historical buildings 
such as Independence Hall, and many of the former Presidents' 
homes.
    Despite these stewardship responsibilities, our report 
raised serious concerns about the agency's commitment and its 
priority to ensure that the risks of the structural fires to 
visitors, employees, resources, and other assets were minimized 
as best as possible.
    In summary, our report used words like ``no fire plans,'' 
``low priority,'' ``little commitment,'' ``inadequate 
training,'' and ``equipment.'' In short, structural fire safety 
efforts in national parks are not effective.
    The structural fire activities at the six parks we visited 
lacked many of the basic elements needed for an effective fire 
safety effort. We're talking about such fundamental things as 
inadequate fire training for employees, inadequate or 
nonexistent fire inspections, and for many buildings inadequate 
or nonexistent fire detection and suppression systems.
    These situations have led to many existing fire safety 
hazards. We found fire extinguishers that had not been checked 
for years, overnight accommodations that have not been 
inspected by qualified fire safety people, cabins without smoke 
detectors, and visitor centers that did not have fire 
suppression systems.
    Furthermore, even when fire hazards are detected, they can 
go uncorrected and did go uncorrected for years. For example, 
during a visit to Ford's theater earlier this year, we noted 
that there were serious deficiencies concerning stairwell and 
stage doors that had not been corrected even though they were 
first identified in 1993.
    If I could refer you to the Ford's Theater poster, this is 
an example, of a door that's a fire hazard. The bottom of the 
door had been cut off so that wires were run underneath the 
door. What safety fire hazard you have is the inability to 
close a door that will, in fact, slow down the progression of a 
fire to give visitors more time to get out of a building.
    Here is another example of what we found in Ford's Theater. 
This is the roof of the building with installed sprinkler 
suppression systems. The requirements call for the sprinklers 
to work effectively. To do this they need a minimum of 18 
inches of clearance for the sprinkler heads to disburse water. 
We are talking about finding storage boxes almost right on top 
of sprinkler heads.
    Just 1 month before our report was released, we accompanied 
a DC Fire Department inspector to Ford's Theater to inspect the 
theater once again, and they found over 50 fire and safety 
concerns.
    These types of deficiencies, Mr. Chairman, in our opinion, 
occur primarily because local park managers are not required to 
meet minimum structural fire safety standards and because 
structural fire activities, in our opinion, have been a low 
priority within the agency for many years.
    Even though the Park Service issued policy to local park 
managers about how to address structural fire safety, park 
managers are not required to follow the agency policy, nor are 
they required to even meet any minimum set of fire safety 
standards.
    Instead, individual park managers are permitted to define 
the scope and emphasis given to the threat of structural fires 
locally. Our work shows that structural fire safety has been 
near the bottom of the park's priority list.
    The Park Service has acknowledged problems in implementing 
its current structural fire safety program, and they have 
begun, to their credit, a number of positive initiatives to 
address them. I'll let Maureen of the Park Service discuss some 
of those initiatives.
    But in closing, let me say that our report clearly got the 
attention of the Park Service. We made numerous 
recommendations, and the Park Service has indicated that they 
agree and are proceeding to take corrective actions.
    Getting new initiatives started to correct the problem is a 
good thing. However, the bad thing is that fixing the problems 
takes time, and these initiatives have only recently begun. 
Until these initiatives are completed, the safety of park 
visitors, employees, buildings, and artifacts are still in 
jeopardy and are vulnerable to fire that could cause damage, 
destruction, severe injury, and even loss of life.
    Until the agency takes action in these areas, the problems 
we identified will clearly persist.
    I am going to close now. This concludes my statement. I 
will be glad to answer questions of the panel. [The prepared 
statement of Jim Wells follows:]

   Prepared Statement of Jim Wells, Director, Energy, Resources, and 
    Science Issues, Resources, Community, and Economic Development 
                Division, U.S. General Accounting Office

    Mr. Chairman and members of the Task Force, we are pleased to be 
here today to discuss the Park Service's structural fire safety 
efforts.\1\ Our comments today are based on our May 2000 report in 
which we evaluated:
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    \1\ Structural fires include fires in buildings, dumpsters, and 
vehicles.
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    1. Whether the parks were meeting their structural fire safety 
responsibilities;
    2. If not, why not; and
    3. What efforts were underway to address any identified 
problems.\2\
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    \2\ Park Service: Agency Is Not Meeting Its Structural Fire Safety 
Responsibilities (GAO/RCED-00-154, May 22, 2000).
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    Our report raised serious concerns about the agency's commitment 
and priority to ensuring that the risks of structural fires harming 
visitors, employees, resources, and other assets were minimized.
    In summary, we found:
    Structural fire safety efforts in national parks are not effective. 
The structural fire activities at the six parks we visited lacked many 
of the basic elements needed for an effective fire safety effort. These 
gaps included such fundamental things as inadequate fire training for 
employees, inadequate or nonexistent fire inspections, and--for many 
buildings--inadequate or nonexistent fire detection or suppression 
systems. These situations led to many fire safety hazards. We found 
fire extinguishers that had not been checked for years, overnight 
accommodations that had not been inspected by qualified fire safety 
people, cabins without smoke detectors, and visitor centers that did 
not have fire-suppression systems. Furthermore, even when fire hazards 
are detected, they can go uncorrected for years.
    These deficiencies occur principally because local park managers 
are not required to meet minimum structural fire safety standards and 
because structural fire activities have been a low priority within the 
agency for many years. Even though the Park Service issued policy to 
local park managers about how to address structural fire safety, park 
managers are not required to follow the agency policy, nor are they 
required to meet a minimum set of fire safety standards. Instead, 
individual park managers are permitted to define the scope and emphasis 
given to the threat of structural fire. Our work shows that structural 
fire safety is near the bottom of the parks' priority lists.
    The Park Service has acknowledged problems in implementing its 
structural fire safety program and has begun a number of initiatives to 
address them. These include:
    1. Developing new agency policies for addressing structural fire 
safety responsibilities;
    2. Placing specific minimum fire safety requirements on park 
managers; and
    3. Developing a process for structural fire inspections and 
performing assessments of structural fire risks at each unit of the 
national park system. However, these initiatives have only recently 
begun. Until these initiatives are completed, the safety of park 
visitors, employees, buildings, and artifacts are being jeopardized and 
are vulnerable to fire that could cause damage, destruction, severe 
injury, and even loss of life.

                               Background

    Today, the Park Service is the nation's steward for over 30,000 
structures, many of them historic; many national icons, such as the 
Statute of Liberty; and over 80 million artifacts. These structures 
include hotels; motels; cabins; visitor centers; interpretative 
centers; and historical buildings, such as Independence Hall and many 
former presidents' homes. In terms of buildings alone, the Park Service 
is the Federal Government's third largest landlord--behind only the 
Department of Defense and the U.S. Postal Service.
    The Park Service is responsible for ensuring that the buildings and 
artifacts entrusted to it are protected and that the people who visit 
or work in them are safe from undue hazards or risks. However, one 
risk--the threat of fire--has been a recurring issue. While much public 
and media attention has historically focused on spectacular wildland 
fires, like those that occurred in Yellowstone National Park in 1988, 
or around Los Alamos, New Mexico, earlier this year, building or 
structural fires within parks have not received much attention. 
Nonetheless, since 1990, more than 1,400 fires have occurred in 
national park buildings and other facilities. These fires have killed 
five people, caused serious injury to many others, and resulted in 
millions of dollars in property loss.

   Key Elements Generally Missing From Parks' Structural Fire Safety 
                               Activities

    None of the six parks we visited had effectively addressed their 
structural fire safety responsibilities.\3\ In fact, most of the basic 
components necessary for addressing parks' structural fire risks were 
missing at each park. These gaps have resulted in significant and, in 
some parks, long-standing deficiencies that have seriously compromised 
fire safety. Although we visited only a few parks, according to the 
Park Service's Deputy Chief Ranger who is responsible for the agency's 
structural fire program, similar problems with park structural fire 
programs would be found whether we visited 6 or 60 parks.
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    \3\ The six parks were Ford's Theatre National Historic Site in 
Washington, DC; Olympic National Park in Washington State; Prince 
William Forest Park and Shenandoah National Park in Virginia; and 
Sequoia-Kings Canyon National Park and Yosemite National Park in 
California.
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    According to structural fire safety experts from the National Fire 
Protection Association, U.S. Fire Administration, and fire experts from 
six other associations and government agencies we contacted, an 
effective structural fire safety effort has three essential components: 
fire prevention and protection, fire response, and funding. Both the 
fire prevention and protection component and the fire response 
component have a number of key elements associated with them. However, 
at each of the six parks' that we visited most of the key elements were 
missing.

                     Fire Prevention and Protection

    According to the structural fire experts we contacted, the key 
elements to effective fire prevention and protection are first, a fire 
plan for handling fire risks and incidents, second, fire inspections 
conducted by qualified staff, and third, an incident reporting system 
to analyze fire incidents and identify corrective actions to the fire 
safety program. However, the parks that we visited were lacking in most 
or all of these components.
    None of the six parks that we sampled had adequate fire plans. At 
each park, the plans were either out of date or not coordinated with 
nearby community fire departments or had some combination of these 
problems. For example, the fire plan at Shenandoah National Park was 
prepared in 1991 but has not been updated since that time to reflect 
the addition of new buildings or other changes in park operations. 
Updating the plan is particularly important at this park because, 
according to park managers, the park has an inadequate fire response 
capability and, therefore, must rely heavily on fire departments from 
local jurisdictions outside the park to respond to fires.
    Similarly, regarding inspections, none of the parks we visited had 
their facilities regularly inspected for fire safety by qualified 
individuals. Examples of structural fire inspection deficiencies that 
we identified included the following:
     At Yosemite National Park, until 1999, none of the park's 
structures had a formal structural fire safety inspection, including 
the 123-room Ahwahnee Hotel--a national historic landmark. In fiscal 
year 1999, the park hired, for the first time, a trained structural 
fire inspector to begin fire inspections for its 800 structures.
     Sequoia-Kings Canyon National Park had not conducted any 
structural fire safety inspections, even though the park has about 250 
buildings and other facilities, and has had 41 structural fires since 
1988.
     During a visit to Ford's Theatre in Washington, DC, we 
noted that serious deficiencies concerning stairwell and stage doors 
had not been corrected even though they were first identified by a Park 
Service contractor in 1993. The contractor's report also raised 
concerns about the theater's sprinkler system and noted that, ``If the 
sprinkler system fails or does not operate as designed, a fire in the 
stage area, particularly during a production, has the potential to kill 
several hundred people. * * * Fires in other theaters show that a 
severe fire can develop in a few minutes.''
    The remaining key element in fire prevention and protection is an 
incident reporting system to analyze fire trends and causes in order 
that corrective measures can be devised and initiated. Three of the six 
parks we visited did not participate in an agencywide fire incident 
reporting system. Failure to report this kind of information undermines 
the agency's ability to understand the scope of fire problems and 
vulnerabilities throughout the national park system as well as the 
agency's ability to set priorities for its safety needs.

                             Fire Response

    According to the structural fire safety experts that we contacted, 
two key elements are needed to effectively respond to fires, namely, 
first, fire detection and suppression systems and second, fire brigades 
and/or agreements with community fire departments. None of the parks in 
our sample had an adequate fire response capability.
    Suppression systems, such as sprinklers, should be a key component 
in any structural fire safety effort, according to fire experts, and 
are especially important to the Park Service because of the remoteness 
of many facilities and the delayed fire response capabilities generally 
found in many parks. In addition, where fire detection and/or 
suppression systems are installed in buildings, experts agree that it 
is critical that these systems be maintained and tested periodically to 
ensure they are working properly. Each of the six parks we visited were 
either missing detection or suppression systems in key facilities, such 
as visitor centers and overnight lodging facilities, or were not being 
maintained and tested properly, if at all.
     At Prince William Forest Park, smoke detectors were not 
installed in many cabins used as overnight accommodations by visiting 
guests. Frequently, these guests are youth organizations.
     At Yosemite National Park, none of the sprinkler systems 
installed in park buildings have been tested since they were installed 
to make sure that they are operating properly. In addition, we found 
that park officials did not replace defective sprinklers involved in a 
well-publicized nationwide recall. A park manager told us that the park 
did not meet a 1999 deadline set by the U.S. Consumer Product Safety 
Commission and the manufacturer to qualify for the reimbursement of 
labor costs associated with replacing, parkwide, about 1,000 recalled 
sprinkler heads. These sprinkler heads are used in fire suppression 
systems in residences where park employees live. The defective 
sprinkler heads, identical to those installed at Yosemite, failed to 
function in at least 20 fires. Nonetheless, the park has not replaced 
these sprinkler heads and is still relying on them as a key part of its 
fire safety effort.
    To complement fire detection and suppression systems, adequate fire 
response requires fire response crews that are properly trained and 
equipped. Within the Park Service, adequate fire response is frequently 
accomplished by the use of fire brigades. Fire brigades are similar to 
community fire departments and include firefighters, fire equipment, 
and flame-retardant clothing located in or near the park. The Park 
Service has come to rely on the use of fire brigades in parks that are 
some distance from community fire departments. In parks that are not 
remote, the park managers frequently have agreements with nearby 
community or other fire districts for initial response or additional 
backup for responding to fires. Each of the six parks we visited either 
did not have a qualified or properly equipped fire brigade or their 
response capability was not fully coordinated with local fire 
departments. For example:
     At Yosemite, in 1999, 42 of 45 of the firefighters 
stationed in Yosemite Valley--the central and busiest area of the 
park--had not taken the agency's annual 16 hours of required minimum 
training or had no record of any training.
     Shenandoah National Park does not have qualified personnel 
to respond to structural fires. The park has a collateral-duty fire 
brigade that has not been trained to enter a burning structure and 
lacks the necessary equipment to respond to vehicle fires. The park's 
policy is to rely on local fire departments for entering burning 
structures. However, the departments' response times range from 10 to 
over 45 minutes, in contrast to a much shorter response time--4 to 6 
minutes--that is generally needed to respond to burning buildings.
     Olympic National Park has fire response agreements with 
only two of nine fire departments in the surrounding area. As a result, 
many areas of the park have no formal arrangements with local fire 
departments for a structural fire response.

                                Funding

    Fire experts generally agree that sufficient, consistent funding is 
necessary to support an effective structural fire safety effort. 
However, there is no specific appropriation dedicated to structural 
fire activities in the Park Service. Individual park managers are 
permitted to determine the funding levels, if any, for structural fire 
activities. Park managers at the six parks we visited acknowledged that 
structural fire safety activities received insufficient funding.
    Our findings on the gaps and problems in the parks' structural fire 
safety efforts appear to be consistent with the Park Service's own 
analyses. A 1998 Park Service report stated, ``sooner or later the NPS 
stands to be seriously embarrassed (at a minimum) by the catastrophic 
loss, either of an irreplaceable historic structure or collection, or 
of human life, from a structural fire.'' In addition, in December 1997, 
the Director of the Park Service expressed serious concerns when an 
internal agency report identified about 1,900 fire safety deficiencies 
associated with the agency's museum collections--such as the storing of 
flammable liquids and materials near museum storage spaces. Yet, as of 
January 2000--over 2 years later--almost 75 percent of these 
deficiencies have not been corrected. According to the director, 
``These deficiencies can be corrected at a modest cost. To do otherwise 
would be negligence.''

    Key Reasons for the Agency's Ineffective Structural Fire Effort

    The parks we visited lacked an effective structural fire safety 
effort because the agency first, has not fully specified the minimum 
structural fire safety standards individual parks must meet and second, 
has placed little emphasis on structural fire safety. As a result, 
managers at these parks gave this aspect of operations a low priority. 
This low priority is inconsistent with Park Service assertions that 
health and safety issues are a top agency priority.
    Currently, the Park Service provides park managers with a 
generalized policy on what their fire safety efforts should include. 
However, the policy does not require parks to meet minimum fire safety 
standards. It places primary responsibility for daily management and 
compliance for structural fire safety with individual park managers. 
The extent to which such activities are implemented at each park, 
however, depends on how individual park managers define the scope, 
priority, and emphasis given to structural fire safety efforts.
    While the policy places primary responsibility on park managers to 
carry out structural fire safety activities, little support or emphasis 
for the effort appears to exist at the headquarters or regional levels. 
Furthermore, the Park Service has no process for ensuring that plans 
for renovating existing facilities or constructing new structures is 
routinely reviewed for fire safety. The lack of agency attention to 
structural fire seems inconsistent with the Department of the 
Interior's and the Park Service's statements that addressing unmet 
health and safety concerns is a top priority. In April 1999, the 
Department of the Interior provided its component agencies--including 
the Park Service--with guidance that identified health and safety 
issues as a top funding priority. This guidance explicitly identifies 
violations of national fire protection standards as requiring immediate 
attention. Although the Park Service's fiscal year 2001 annual 
performance plan stresses that employee and visitor health and safety 
are top agency priorities, in the case of structural fire safety, the 
Park Service's practices and activities have not been consistent with 
this policy.

   Initiatives to Address Problems, but Practical Results Depend on 
                        Effective Implementation

    The Park Service is aware that there are major weaknesses in its 
structural fire safety effort and has begun a number of initiatives to 
address them. It is unclear, however, whether the Park Service will 
follow through on these initiatives to ensure that an effective 
structural fire safety program is developed and implemented.
    Park Service officials are aware that structural fire safety is a 
low priority at many parks, and the agency has begun a number of 
initiatives to revitalize and improve its effort. In 1998, the agency 
appointed a structural fire safety steering committee, which drafted a 
fire management policy and mission statement. These documents defined 
the purpose, scope, and general policy toward structural fire in the 
agency. Also in 1999, the Park Service hired a new structural fire 
chief and directed the individual to develop an agencywide structural 
fire safety program. This program is now being developed. Once 
implemented, these initiatives are likely to increase the level of 
structural fire prevention and response over that currently in place. 
Over time, such initiatives would shift the agency's focus from one 
that currently emphasizes fire response to one that emphasizes fire 
prevention--an approach that, according to program administrators, is 
much more cost-effective.
    While the initiatives under way are certainly steps in the right 
direction, their success depends on their being effectively 
implemented. However, it appears that the planned levels of resources 
for these structural fire safety initiatives will not be sufficient to 
get several key initiatives completed, including one of the agency's 
most critical efforts--completing an overall assessment of the 
structural fire risks facing facilities and structures throughout the 
Park Service.
    In closing, as a result of the findings in our report, we 
recommended that the Park Service complete and implement the various 
structural fire safety initiatives that have recently begun in the 
agency. This effort should include, among other things, establishing 
minimum structural fire safety requirements, developing and 
implementing a plan for correcting the fire safety needs and 
deficiencies, and ensuring that new and rehabilitation projects comply 
with generally accepted fire codes. In addition, to ensure that local 
park managers elevate the priority given to addressing structural fire 
safety needs and deficiencies, we also recommended that park managers 
be held accountable for meeting the agency's health and safety 
responsibilities by requiring them to develop and implement effective 
structural fire safety programs.
    In commenting on our May 2000 report, the Park Service agreed with 
our findings, conclusions, and recommendations. The agency also 
indicated that is was continuing to work on its ongoing initiatives and 
considering plans to implement our recommendations. Until the agency 
takes action in this area, the problems that we identified will likely 
persist.
    This concludes my statement. I would be happy to answer questions 
from you or other members of the committee.

    Mr. Radanovich. Thank you for your testimony.
    And, again, we will hear from Ms. Finnerty first, and then 
we will go to questions.
    So, again, welcome, Ms. Finnerty, and please begin.

                 STATEMENT OF MAUREEN FINNERTY

    Ms. Finnerty. Thank you, Mr. Chairman.
    I will summarize my remarks and ask that my full statement 
be incorporated into the record.
    The National Park Service agrees with GAO's report on 
structural fire. We believe it accurately reflects the status 
of the structural fire program, and it will help us to develop 
a comprehensive strategy for dealing with it.
    The National Park Service has given serious attention to 
this program for the last 18 months, well before the start of 
the GAO audit, which started November of 1999. In the last 18 
months we have established an interdisciplinary steering 
committee to help us look at the program and design the program 
as it needs to be.
    We have hired a full-time structural fire program manager. 
We have drafted a new policy, Director's Order 58, which 
mandates a number of actions that need to be taken in the 
structural fire arena.
    We have developed a structural fire building inspection and 
assessment process, and we have designed an incident reporting 
system to report on structural fire incidents.
    GAO, as they indicated, did visit six parks, and they did 
look at seven key elements of a structural fire program. I will 
briefly highlight each of the seven elements and give a listing 
of some of the events that we have underway as a result of the 
findings.
    The first thing the report called for is a dedicated 
funding source. This fiscal year, Fiscal Year 2000, we have 
already reprogrammed $1 million out of our existing budget to 
start doing building inspections and assessments. That will be 
done by contract, and the work should start within a couple of 
weeks, and hopefully we will be finished by the end of 
September.
    In Fiscal 2001, we are looking at reprogramming of funds to 
try to beef up some of the staffing needs, primarily in the 
regional offices that need to provide oversight to parks on 
structural fire.
    And in the Fiscal Year 2002 budget process, we do have a 
package that is working its way through the priority system of 
funding needs for the year 2002, again, to provide oversight 
and staffing for the program, training, and those kinds of 
things.
    The second item listed in the GAO report talks about lack 
of structural fire plans. Our new revised policy, Director's 
Order 58, does mandate that each park will have a structural 
fire plan, and those efforts will be underway. It specifically 
spells out the requirements of what should be in those plans, 
and parks will be required to do them.
    The third element in the GAO report is the building 
inspection program, and again, as I indicated, we have 
reprogrammed $1 million this year to do it. We do have 
standardized formats and methodologies that we are looking at. 
So we will be looking at the same kinds of things as we inspect 
these buildings.
    Twenty-five parks will be visited over the next couple of 
months, and we will look at 180 building, giving primary 
emphasis to those where there are overnight accommodations, 
where there are multiple dwellings, historic structures, and 
places of assembly will receive the first priority for the 
inspections.
    The fourth recommendation was that we develop an incident 
reporting system, and we do have a standardized structural fire 
report designed. We still need to put a system into place that 
will enable us to roll this information up on a Service-wide 
basis. So we have the start of it in that parks will be able to 
input information into the system on various incidents in 
structural fire, and we have a funding request, again, that is 
working its way through the process for the 2002 budget that 
will enable us to set up a Service-wide reporting system that 
will deal not only with structural fire incidents, but other 
incidents that we need to report on.
    The fifth recommendation was the installation and 
maintenance of detection, prevention, and suppression systems, 
and again, our new Director's order adopts National Fire 
Protection Association codes and standards. That was one of the 
findings of GAO, that we were not applying any kind of 
consistent standards from park to park.
    The inspection and the building analysis that will start 
very shortly will determine additional needs that we have on a 
Service-wide basis, and we do have at the present time 46 
projects that are in line for approval and funding to remedy a 
lot of the detection problems, and those projects total $6.6 
million, and they cover the years 2001 to 2005. So they are 
already in the program; they are in the queue. Funding will be 
available. So we should be able to remedy some of these 
deficiencies.
    The sixth recommendation called for trained and qualified 
personnel, and, again, our 2002 budget initiative has a request 
in there for a sustained annual funding source so that we can 
get our people adequately trained to oversee this program.
    We will try to reprogram some funds in 2001 both to deal 
with the training and the hiring of people to provide 
oversight, and we are designing course work for 
superintendents, structural fire for park managers to get them, 
again, oriented and grounded in some of the requirements of 
managing a structural fire program.
    We are looking at standardizing fire brigade training. 
Those parks where we do need to have fire brigades, we 
obviously first need to determine which parks need that, and 
then obviously we have to get those people trained in that 
particular event.
    And the new Director's order and the resource manual that 
is being prepared will very clearly set out minimum 
requirements for both suppression and prevention training, and 
again, we have not had that in the past.
    The final recommendation dealt with fire response 
capability. We do have 43 parks that have fire brigades. This 
is handled on a collateral duty basis. Part of the assessment 
that we are undergoing will determine how many of those parks 
really need fire brigades. We like to use these as a last 
resort. We prefer that the parks enter into agreements with 
surrounding communities and have fire suppression dealt with in 
that manner.
    But we recognize that there are parks that because of the 
nature of the facilities and the isolation factor, will have to 
have brigades. So our first determination is which parks are 
those, and then secondly getting those folks adequately 
trained.
    This concludes my formal remarks, and I certain will be 
happy to answer any questions that you may have. [The prepared 
statement of Maureen Finnerty follows:]

  Prepared Statement of Maureen Finnerty, Associate Director for Park 
Operations and Education, National Park Service, U.S. Department of the 
                                Interior

    Thank you for the opportunity to discuss with you the recently 
issued report by the General Accounting Office (GAO) on the National 
Park Service structural fire safety program. This report, entitled 
``Park Service: Agency Is Not Meeting Its Structural Fire Safety 
Responsibilities'' (GAO/RCED-00-154), analyzes the National Park 
Service (NPS) efforts to prevent and respond to fires in the many 
structures in the national park system.
    As Don Barry, Assistant Secretary for Fish and Wildlife and Parks, 
indicated in a letter to GAO dated May 17, 2000, overall, we found that 
the report accurately reflects the general status of issues in the 
National Park Service structural fire program. This report offers us an 
opportunity to begin the development of a comprehensive structural fire 
program. The implementation of these recommendations will benefit park 
visitors and the program in general.

                               Background

    The National Park Service has more than 20,000 buildings located in 
parks throughout the United States and we have the responsibility of 
protecting these buildings, and the people using them, from fire. Fire 
safety and the protection of people and property is essential to the 
mission of the National Park Service and is a significant component of 
our overall safety program.
    We have been addressing structural fire issues for many years, but 
not until recently have we begun to develop a comprehensive structural 
fire program. Until 1987 most structural fire issues were addressed by 
individual parks. In 1987 the first National Park Service guidelines 
were developed to provide direction in addressing the complex issue of 
structural fire.
    Our goal is to develop a comprehensive structural fire program 
based on preventing fires through engineering, education, and 
developing and maintaining fire departments and brigades in areas where 
we are unable to address the structural fire requirements through other 
means.
    Prior to the GAO audit we had taken steps to address structural 
fire issues. These steps included:
     development of an interdisciplinary steering committee to 
provide direction for program development;
     hiring a structural fire program manager to design and 
develop a comprehensive structural fire program;
     drafting of a new agency policy for addressing structural 
fire;
     development of a structural fire building inspection and 
assessment process to identify needs and deficiencies; and
     design of a structural fire incident information reporting 
system.
    In the spring of 1999 Congress requested, and the National Park 
Service collected, compiled and provided, information on past and 
current fire inspections. In November 1999 the GAO audit of National 
Park Service structural safety was initiated. The report concluded that 
the National Park Service is not meeting its structural fire safety 
responsibilities.

                          Steps We Are Taking

    The audit consisted of using ``seven key elements of a structural 
fire program'' to evaluate the program in six park units. The seven key 
elements are requirements of a comprehensive structural fire program 
and were reviewed and agreed to by the National Fire Protection 
Association, U.S. Fire Administration, Department of Energy and General 
Services Administration. The GAO audit involved site visits to six 
National Park Service units. In the review of the parks none met the 
seven program requirements. I will go over each element and the steps 
that we are taking to implement the element on a servicewide basis.
    1. Consistent funding sufficient to support an effective structural 
fire safety effort. Consistent funding is necessary to implement a 
comprehensive structural fire program. We have begun to identify the 
funding needs to address current and projected deficiencies within 
existing or likely funding levels. Estimates to address all parks and 
buildings must be based on information collected during building 
inspections and park analysis. We anticipate that the estimates for 
this more detailed tier of work will be proposed to support our fiscal 
year 2002 budget proposal.
    2. A structural fire plan that includes overview and key elements. 
Completion of the NPS Director's Order 58, Structural Fire, and the 
corresponding reference manual will establish the minimum structural 
fire safety requirements for the National Park Service. The Director's 
Order has been drafted and circulated for agency and public review. The 
comment period ended on June 26, 2000 and comments are being evaluated 
and incorporated into the draft. When the comments and recommendations 
have been incorporated, the Order will be sent forward for the 
Director's review and approval. A portion of the Director's Order 
requires each park to develop structural fire plans.
    3. A defined building inspection program that identifies the scope 
and methodology including standards, frequency, and personnel. We have 
allocated funding to implement our fire inspection and analysis system. 
Inspections and analysis will include high-risk buildings including, 
but not limited to, overnight accommodations, single and multiple 
person dwellings, places of assembly, and historic structures. This 
system, based on National Fire Protection Association standards, will 
identify safety needs and deficiencies and is being adopted as the 
standard for the National Park Service. Inspection and analysis of park 
buildings and infrastructure will be an ongoing process and three 
National Park Service employees have been assigned to the Structural 
Fire Program Manager to assist in accomplishing this task. It is our 
goal to develop a structural fire program that includes sufficiently 
trained and qualified personnel to conduct these fire inspections.
    4. An incident reporting system including criteria, reporting 
methodology and analysis. Incident reporting provides the foundation of 
information necessary to identify deficiencies, and take corrective 
action. Therefore, collecting specific and reliable information is 
crucial. A standardized NPS structural fire incident report has been 
designed based on nationally accepted structural fire reporting 
standards. Service-wide implementation of the report is waiting for the 
development of a mechanism for individual parks to input the 
information to a centralized location.
    5. The installation and maintenance of fire prevention, detection, 
and suppression systems. The Director's Order adopts National Fire 
Protection Association codes and standards. These codes and standards 
are nationally recognized as minimum requirements for addressing 
structural fire safety. They include standards for installation and 
maintenance of fire alarms and detection systems.
    The implementation of the inspection and analysis system is the 
first step in identifying fire safety deficiencies and what is required 
to correct them. A contract is currently being developed to conduct 
these inspections using qualified structural fire safety personnel. The 
information generated from the inspections and analysis will then be 
used to correct deficiencies that can be addressed immediately and 
develop plans for correcting more complex deficiencies.
    Currently, we have 46 structural fire safety related projects that 
have been identified in PMIS and scheduled for implementation over the 
next 5 years. Included in these projects are the installation of fire 
suppression and fire alarm systems and upgrading fire hydrants. The 
cost for these projects is more than $6.6 million.
    6. Trained and qualified personnel. Structural Fire is a broad and 
complex issue. To develop an effective program will require 
establishing a foundation of personnel as well as adequate funding. The 
program involves a wide variety of elements and issues including 
building design, building construction, installing and maintaining 
detection and suppression systems in buildings, regular inspections of 
buildings and systems, training, establishing and maintaining fire 
agreements, and in some cases developing, maintaining and operating a 
fire-fighting force.
    To help us implement an effective program we will reallocate 
existing resources to support structural fire related positions. The 
position functions include program management, fire prevention, fire 
training, and program support. In addition, we are establishing 
structural fire management officer positions in each of our seven 
regional offices. We intend to accelerate our efforts by reallocating 
or reprogramming funds to fill the positions in fiscal year 2001. These 
positions will be responsible for implementing the structural fire 
management program and providing parks with structural fire expertise.
    We will also reallocate funds for fire prevention and fire 
protection training. The U.S. Fire Administration, National Fire 
Academy, will be the main provider for fire prevention classes. Fire 
suppression training will be provided by contractors and outside 
agencies as we develop the capabilities within the agency.
    We are working with the International Fire Service Training 
Association (IFSTA) to develop NPS structural fire brigade standardized 
training materials, lesson plans, and instructor guides. A structural 
fire for superintendents class is being developed. This class will 
provide superintendents with the background, program requirements and 
tools to effectively address structural fire at the park level.
    Director's Order 58 and the corresponding reference manual identify 
minimum training standards for both fire prevention and fire 
suppression. We have collected employee structural fire training 
records and entered them into a database so we can use the information 
to identify employee training levels.
    7. Fire response capability including the necessary equipment and 
trained and qualified personnel. Fire departments and fire brigades are 
complex and costly to operate. If a park requires a fire brigade or 
fire department because of location or lack of available local 
resources, it must meet national fire standards. Brigades and fire 
departments will be evaluated through the inspection/analysis system. 
This will identify personnel, equipment, training and funding 
requirements.
    Currently, in approximately 13 percent of NPS areas, the structural 
fire response is accomplished by NPS fire brigades. These fire brigades 
are similar to volunteer fire departments in that they rely on persons 
working and or living in the area to work as firefighters. These people 
are not full-time firefighters but are trained as firefighters and 
respond when needed. We rely on fire brigades in parks that require the 
ability to respond to structural fire incidents and are located in 
areas that do not have structural fire fighting resources available 
from adjacent communities. In parks that are located close to 
communities that can provide structural fire suppression services, we 
encourage development of formal agreements for fire suppression 
services. We do not want to increase the number of NPS fire brigades 
unless our park analysis shows that is the only viable option.

                               Conclusion

    We have responded to the individual park deficiencies that were 
identified during the General Accounting Office audit and we are 
undertaking the development of a comprehensive structural fire program 
based on national fire standards. The standards are clear and they will 
be used to build a strong foundation for the program.
    Only by implementing an agencywide building inspection and analysis 
program will we be able to identify the scope of our structural fire 
deficiencies. With this information we will be able to estimate the 
financial requirements necessary to meet our fire safety 
responsibilities.
    This concludes my statement. I will be happy to respond to any 
questions that you may have.

    Mr. Radanovich. Thank you very much. I will go ahead and 
start the questioning, and this will not just be one round of 
questions. I think we will be a little bit flexible, and if 
something comes up where members was to re-question, that 
should not be a problem.
    Mr. Wells, when did issues come up? The date 1987 kind of 
rings a bell as I was going through the literature and the 
material on this. When questions started to arise, you know, 
about the adequate inspections or lack of them in the Park 
Service, this has been an ongoing problem. This has been 
something that just hasn't come to the surface recently and 
then has begun to be addressed by the Park Service. Do you 
agree to that?
    And can you illuminate a little bit on the history of this?
    Mr. Wells. Yes, I can, and we would agree with that 
statement. When our auditors began the investigation, one of 
the first things that we do is we look at what has the agency 
itself done over the years in terms of identifying some of the 
deficiencies and the problems.
    It is true that there was an internal assessment done in 
1987 that you referred to that talked to somewhat of an 
immediate need for hiring full-time positions, people that had 
fire structure safety management type skills that needed to be 
placed throughout the Park Service to assist them in providing 
safety and health issues, particularly involving new projects 
and new construction.
    Thirteen years later when we began the work, that 
recommendation had not been acted upon, and we understand that 
one of the items in their initiatives, is to put into the '02-
'01 budget money to get those positions finally filled that 
were identified back in 1987.
    But there were other instances. For instance, in 1997 the 
Park Service did an internal assessment involving their museum 
collection type items. At that time they identified over 1,900 
safety and health deficiencies that they were concerned about, 
many of which were identified as being types of things that 
could be accomplished at minimal cost, and here it was 3 years 
later when we began our work. We found that over 75 percent of 
those deficiencies had not been corrected.
    So there had been a period of time where even with their 
internal looks, the corrective action had not been fully 
implemented, yes, sir.
    Mr. Radanovich. Thank you.
    Ms. Finnerty, can you tell me? You know, the Park Service 
has been in existence what, 150 years now?
    Ms. Finnerty. Not quite that long.
    Mr. Radanovich. Not quite that long?
    Ms. Finnerty. Eighty-four.
    Mr. Radanovich. You know, in cities and in public places I 
understand the national parks are visited by about 240 million 
people a year. Many of them do spend time in public buildings 
and even spend the night in lodging facilities. Any city or 
small town or even an unincorporated town that you go into all 
across the United States has a fire marshal or somebody who is 
in charge of maintaining the local building fire and safety 
codes.
    What has been the problem with the National Park Service 
over all this time for not directing that responsibility 
anywhere?
    Ms. Finnerty. Well, I think the GAO report is accurate. It, 
for whatever reasons, has not been a priority. It has not been 
staffed. At the present time we still only have one full-time 
person at the national level working on structural fire, and 
there are a couple of other experts in the organization, but 
that is it, and it has, for whatever reason, not come up high 
on the priority list and obviously we need to change that, and 
we intend to change that because it does affect property and 
lives and those kinds of things.
    Some things are now coming to the top as things that we are 
obviously going to have to pay much more attention to and put 
more resources into, and this is certainly one of those. 
Speaking for the Director, I can say that he is very committed 
to doing this and has been very clear to the Regional Directors 
and others that we have got to turn this thing around, and we 
have got to do it as quickly as we can, not only shifting 
existing resources where we can this year and perhaps next 
year, but then putting together finally a good strategy.
    We have to have some expertise out there in the regions to 
provide some oversight to parks, and in some parks, we also 
probably need to have some expertise in structural fire. It has 
got to come up on the priority list, and we have got to get 
these positions funded.
    Mr. Radanovich. Correct. I think I am aware of at least in 
annual budgets the Park Service asks for anywhere between one 
to $300 million for land purchases, and your annual budget is 
over $1 billion.
    Has there been, to your knowledge, any funding request made 
specifically for fire safety structure and safety code 
enforcement and the establishment of fire marshals?
    Ms. Finnerty. As I mentioned in my comments, we do have a 
package that is working its way through for 2002.
    Mr. Radanovich. Right.
    Ms. Finnerty. I am not aware that we have had anything. I 
cannot speak more than the last 2 or 3 years, but it has not 
shown up, but clearly now it is, and it has gotten everyone's 
attention, and I think you will see it very high on the 
priority listing to get some of these positions funded.
    Mr. Radanovich. I am most familiar with Yosemite National 
Park because I was born and raised right next to it, and the 
small town of Mariposa in some cases, well, of course, by law 
has a fire marshal. Are there within the National Park Service 
now any agreements to utilize local fire safety authorities to 
actually cover the park as well, as possibly they do in 
building codes enforcement and such?
    Ms. Finnerty. Yes. This is part of the information database 
that we are just now starting to collect, finding out exactly 
what is going on out there in the field, and the information I 
got this morning was that there are 225 agreements that exist 
at the present time throughout the system that we are aware of. 
Some parks may have two or three agreements with different 
jurisdictions, but I think there is not a lot of consistency in 
them. Various standards are applied or not applied, as the case 
may be. Some of them are more closely adhered to and work 
better than others.
    So we are sort of finding that we are all over the place on 
that, and one of our objectives is to get a handle on those, to 
do some good model agreements, and to be sure that where we do 
enter into agreements with locals to provide our fire 
suppression and to assist us with the program, that we are 
covering all of the things that we need to cover and that they 
are familiar with the structures and all that.
    So we are very much aware that we have got to improve that 
whole arena, too.
    Mr. Radanovich. All right. Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.
    I want to thank our witnesses and first turn to Mr. Wells 
and maybe concentrate on the GAO report in this first round of 
questioning.
    We had a hearing, of course, earlier on the Park Service, 
and at that time we had an interesting discussion, I thought, 
somewhat inconclusive, about the benefits of centralized 
oversight and management within the Park Service versus the 
benefits of a more decentralized and flexible management 
structure. That, of course, comes up in these discussions, in 
terms of exactly what we are looking for here.
    You know, we are dealing with a very diverse organization, 
a very diverse network of facilities. We are talking about 
Ford's Theater here in the same breath with Yosemite, and these 
obviously are very different kinds of facilities. They have 
very different kinds of fire risks. They have different 
resources available.
    Are there limitations you would put or qualifications you 
would put on the centralized management recommendation that you 
basically urge in this report?
    Mr. Wells. Yes, Congressman Price. Let me respond by 
stating that clearly one shoe does not fit all, and no one is 
suggesting that command and control from the top is the way to 
go. It is not always the most effective, although it is 
sometimes the most direct and gets the most immediate 
attention.
    The Park Service, as you clearly articulated, is a very 
decentralized organization, and rightfully so. Having local 
park managers sitting on the ground, they know best what is 
actually in their particular park. Clearly there are advantages 
to that.
    GAO is not making the recommendation that centralized 
command and control is the way to go. I think what we tried to 
capture in our recommendations was a little bit of a common 
sense scenario that is somewhere in between. Our recommendation 
was that clearly minimum requirements where there are none 
today would assist in providing some specific, identifiable, 
measurable guidance to the local park managers that says at a 
minimum you will ensure that your facilities that you have 
within your boundaries, someone will be looking at them, for 
instance, as part of an annual inspection.
    That may be a minimum requirement imposed centrally, but 
clearly, if a local park manager has millions of visitors and 
has buildings that are in such positions that they may require 
more frequent inspections or more frequent follow-up to find 
out if deficiencies are corrected, again, it is that 
flexibility is what makes sense from a common sense 
perspective.
    We are very encouraged that the Park Service has, in fact, 
issued their Directive 58 for the first time putting such 
minimum requirements, which does assist the local park 
superintendents getting the handle on what they are responsible 
for and measuring whether they are, in fact, doing it or not 
doing it. So we think we are encouraged. That is a positive 
step.
    Mr. Price. Good. Let me turn to the question of funding, 
which of course centrally involves or concerns this committee.
    Do you have any recommendation as to the appropriate level 
of funding for fire prevention at the parks, the kind of 
improvements, the kinds of measures you consider in your 
report? And do you have any estimation as to whether these 
levels of spending are feasible without reducing other 
essential park operations?
    Are we looking at some kind of tradeoff here or are we not?
    Mr. Wells. Clearly, we do not have the answer to how much 
funding is going to be needed. Until the Park Service has the 
opportunity to go out and perform inspections at not just the 
25 parks that they are beginning to do the work, but they have 
379 parks that they need to make an assessment. Until you have 
an accurate look at what needs to be fixed, it is hard to 
predict what the money amount will be.
    Regarding tradeoffs, the answer clearly has to be, yes, 
there will be tradeoffs. I would like to point out that it is 
clearly easy to jump to the conclusion that the solution is 
more money, but much of what we saw here clearly goes to a 
management issue; that these parks, as was indicated, do have 
$1.5 billion worth of funding. They do have other sources of 
funding besides operating money.
    They have recreation fee money that is now coming into the 
parks that they are able to retain, in the area of $150 million 
there. They have regional and Service-wide initiatives that are 
available for prioritization and getting projects and getting 
some of these health and safety things done.
    My point is that while everyone needs more money, there is 
a lot of money in these parks. Much of what we are talking 
about is some local management decisions about prioritization. 
What is more important? Do we prioritize trying to fix the 
safety hazard or do we construct something new or do we buy 
something new?
    Those are not money issues. Those are management issues in 
terms of dealing with the dollars that you currently have, and 
I think that would be our recommendation and our first 
direction to encourage the Park Service to make some of those 
tradeoff calls.
    Mr. Price. I do want to come back to some of those 
management issues in the second round.
    Mr. Wells. OK.
    Mr. Price. But to close out this round, let me just give 
Ms. Finnerty an opportunity to comment on the cost issues and 
the competing funding priorities.
    Do you have anything to add on that?
    Ms. Finnerty. Well, I guess I would essentially agree with 
Mr. Wells' comments. I think it is a question of priorities. I 
think there are some funding sources available, and he has 
indicated what some of those are.
    We are starting to direct parks to use some of those pots 
of money, whether it is 5 year repair/rehabilitation funds or 
the recreation fee funds and start addressing some of these 
needs.
    I also would agree with the statement that until we get a 
good baseline of information, I do not think we ought to be 
throwing a lot of money at the program until we find out 
exactly what is the scope of the problem. What is the issue? 
What are the needs? And that is why these building assessments 
and building this baseline database is so very important to us. 
Because once we have that, then we can start earmarking the 
funds that are available. And if, in addition to that, we need 
more funds, then we can certainly go after those.
    We really think, and I do not know what the total amount is 
that we really need, and until we do these assessments we will 
not have that figure, but you cannot provide oversight for a 
program of this importance with one person working nationally, 
and that is why we need to fill these regional positions, at 
least one position in each region that can provide specific 
oversight for structural fire for the parks in that region.
    And maybe we also need some positions in some of these 
bigger parks if you are truly going to get it all the way down 
to the front line because one person working nationally just 
cannot possibly do that.
    So that is where the oversight needs to happen. It needs to 
happen at the regional level if we can get some of these 
positions filled.
    Mr. Price. Well, back to the funding issue specifically 
though, you have not included specific funding requests, 
specific line items for fire prevention; is that right?
    Ms. Finnerty. We have a package that we put together for 
the 2002 budget that deals with training. It deals with 
professionalization. It deals with oversight in the regions. It 
deals with the inspections, the assessments, all those kinds of 
things, and that is working its way through the budget process 
that we follow in the department.
    But it is very definitely there, and it is high priority at 
least for the Park Service. Now, a lot of people, you know, 
will look at those kinds of priorities, but it is very high for 
us.
    Mr. Price. But you are telling us that there are no major 
competing priorities that should prevent the Park Service from 
dealing with this?
    Ms. Finnerty. I would like to say there are no competing 
priorities, but that is not the way the process works.
    Mr. Price. Well, we know that is not the way the world 
works, but I am talking about specific tradeoffs, specific 
budget----
    Ms. Finnerty. I can assure you that this issue is extremely 
important to the Director. We discuss it frequently when we are 
talking about budget and putting the budget together for the 
next cycle, and this has always remained at the top of the 
list.
    So I know, at least from his perspective, that he will make 
that case hopefully to the department and OMB, and that it will 
be retained in a high position.
    Mr. Price. Thank you.
    Thank you, Mr. Chairman.
    Mr. Radanovich. All right. Thank you, Mr. Price.
    Mr. Herger from California.
    Mr. Herger. Thank you very much, Mr. Chairman.
    And, again, I thank you for having this hearing on this 
very important issue.
    I thank both of our witnesses for being here. I represent 
an area in the West and northeastern California that has all of 
our parts of 11 national forests and a number of parks, 
national parks, within that, and certainly this is very 
important to us.
    It is also an area, unlike the East and the Midwest, where 
the Federal Government owns a tremendous amount of our land 
base. I have counties, my ten counties, that have as much as 80 
percent owned by the Federal Government. So there is a great 
deal of concern.
    Over the years, I have been here in my seventh term, and 
our families had the incredibly great pleasure of being able to 
visit a number of our historic treasures here in this 
Washington area, including the Ford Theater, over the years, 
and I was very concerned to read here of the problems that the 
Ford Theater has had in the area of being basically unsafe 
because of fire problems and the fact that it has gone 
uncorrected for 7 years.
    I think about how I hear from my constituents, my small 
business people on a continual basis how they feel they are 
harassed by the Federal Government on this, on them keeping up 
rules, and I guess I would have to ask you, Ms. Finnerty. How 
long do you think, if the Ford Theater were a private 
enterprise, how long do you think it would have gone without 
being closed down by local fire marshals if the same type of 
conditions had existed there?
    Ms. Finnerty. Well, certainly I do not know how long it 
would have gone, but certainly I think the deficiencies there 
and the fact that they have not been corrected is not 
defensible.
    Mr. Herger. Seven years.
    Ms. Finnerty. It is not defensible.
    Mr. Herger. What are you guessing? Another 6, 7 years or--
--
    Ms. Finnerty. Well, we can give you----
    Mr. Herger [continuing]. What do we have when you think 
they will be?
    Ms. Finnerty. I am aware of the fact that they are being 
addressed. Some of them have already been corrected. Others are 
planned to be corrected. Some others will take additional 
funding, but----
    Mr. Herger. Is there a timetable here? I mean, we are 7 
years now. Is there any whenever?
    Ms. Finnerty. Well, I think those things that can be fixed 
quickly within existing funds are being taken care of. Those 
that may need more money we will have to reprogram or find it 
and get them done, but they are being addressed.
    Mr. Herger. Mannana some time maybe 10 years, I mean?
    Ms. Finnerty. I hope sooner than 10 years, Congressman.
    Mr. Herger. Now, you mentioned money a couple of times. Is 
money a problem?
    Ms. Finnerty. I think money----
    Mr. Herger. You haven't requested any money. I was just 
wondering.
    Ms. Finnerty. No, I think it is an issue as far as program 
oversight is concerned. I think it is an issue as far as 
program oversight.
    Mr. Herger. I see here that you have requested $300 million 
to acquire more private land to take off the tax rolls, and 
many of our areas in the West that are already--but you have 
not requested any in 7 years of repairing some of these. Is 
this what we can expect when you use this $300 million to 
purchase more property, that we will have buildings there that 
will also be unsafe for 7 years and no deadline for when they 
are going to be repaired?
    Ms. Finnerty. Well, we certainly hope not, Congressman, and 
that is why we are trying to use the recommendations, get a 
handle on where we are, assess where we are, reprogram funds to 
get stuff done this year and next, and then we do have a 
funding package that we hope will be funded in 2002 that will 
get this program back on line.
    Mr. Herger. But no great priority in setting some time 
period that 6 months, 3 months, a year, 7 years, 10 years it 
will be done?
    Ms. Finnerty. The Director----
    Mr. Herger. That has not been done yet?
    Ms. Finnerty. The Director----
    Mr. Herger. You have not seen fit to do that yet?
    Ms. Finnerty. The Director has made it very clear to the 
Regional Directors that this is serious, that they have got to 
correct these deficiencies.
    Mr. Herger. Right.
    Ms. Finnerty. They have got to do the inspections. We have 
got new guidance, mandated direction out there, and he has made 
it very clear to them. So----
    Mr. Herger. But did he make it clear 7 years ago or when 
exactly has he made it clear?
    Ms. Finnerty. Well, he made it clear this year.
    Mr. Herger. This year. Well, very good.
    Mr. Wells, do you have any comments on this?
    I mean this seems unbelievable. Again, what would you say 
if this were the private sector? The Ford Theater owned by one 
of my constituents, how long would that have gone before it 
would have been shut down?
    Mr. Wells. Five minutes.
    Mr. Herger. Five minutes, not 7 years?
    Mr. Wells. Mr. Congressman, in April of this year we 
accompanied a DC Fire Marshal team into Ford's Theater. We were 
led to believe as we conducted that tour that they would have, 
had that not been a Federal facility, they would have closed 
that building immediately.
    Mr. Herger. In other words, evidently the Clinton-Gore 
administration, what is good for the private sector is not good 
for our own Park Service buildings, and it is a priority, but 
not a priority high enough to be 5 minutes or certainly not 7 
years.
    Mr. Wells. Clearly, within days of the release of the GAO 
report, the Director's press release, as well as the directive 
and memorandum announcing his Directive 58, included in there 
is a statement that he will look at the national standards and 
codes that exist and will make those minimum requirements in 
his facilities. So he has immediately announced that as soon as 
that order becomes final some of these things must be done.
    Mr. Herger. And, Ms. Finnerty, can you understand the 
dismay that I have?
    Ms. Finnerty. Certainly, certainly.
    Mr. Herger. And I believe that I am reflecting for the 
700,000 people I represent in an area that the Federal 
Government already owns too much. It is a priority to 
appropriate $300 million to buy more, but yet it is not a 
priority to even have in the appropriations system money to 
repair what we already have.
    This is not to you personally, sincerely, but this is 
incredibly outrageous. It is unbelievable. It is something that 
I do not believe the American public should be tolerating. It 
is something that we should be doing--five minutes. I think it 
is that type of priority rather than just some time in the 
future. It is something we need to take care of right away, and 
I would urge you in the strongest terms to do so.
    Ms. Finnerty. We understand, and we clearly have gotten the 
message, and it has gotten folks' attention.
    Mr. Herger. And it is understood more now than it was 7 
years ago?
    Ms. Finnerty. Yes.
    Mr. Herger. Thank you.
    Thank you, Mr. Chairman.
    Mr. Radanovich. Thank you, Mr. Herger.
    I am going to ask both of you this question. Regarding the 
379 national parks, each park has a superintendent. While the 
superintendents are given a lot of leeway as far as the 
implementation of the duties in those parks, there's a lot of 
autonomy given to each park superintendent.
    Mr. Wells, if you would respond first, how do you in the 
scheme of the National Park Service or in the structure of it, 
how would you see the ability to mandate that each one of those 
provide uniform safety for the structures in each park in light 
of the autonomous nature the superintendents have?
    Mr. Wells. I would start to answer that question by clearly 
saying under the current practice the Park Service has decided 
that the superintendent will be accountable and responsible for 
everything, and unfortunately when you have a situation where 
you are accountable for everything, you end up not knowing what 
you are supposed to do, when you are supposed to do it or even 
having some kind of ability to assess whether all the 
requirements that you are accountable for, whether you even 
know what those requirements are, and I think that is what we 
are seeing in the Park Service.
    We attended a conference somewhere and learned that many 
times the Park Service superintendents are being asked to look 
at four long pages worth of laws and regulations with the 
stipulation that are you aware that you are accountable and 
responsible for the correct full implementation of four pages 
worth of these things.
    And unfortunately, there is not clear minimum requirements. 
There is not a lot of guidance or detail in terms of the 
implementation plan that is available to the superintendent.
    So, my answer is that--and it would be interesting to see 
how Maureen feels about this--the superintendents have a great 
responsibility, and as a result, they are not being held 
accountable when things do not work, and that is a problem.
    Mr. Radanovich. Thank you.
    And, Ms. Finnerty, it seems to me it is not a very 
difficult thing to give that authority to a Park Service 
superintendent, but also mandate that the fire safety code be 
assessed and enforced. I mean, it doesn't seem to be that hard 
to give the order.
    But from what I understand, since even these problems were 
highlighted in 1987 and the fact that nothing really has been 
done or begun to happen until recently, that something so 
simple should not have been done sooner. So it makes me wonder. 
Why is there the problem that you cannot just tell your 
superintendents to enforce this?
    Ms. Finnerty. Well, I think it is an issue of priorities. I 
think Mr. Wells is correct. Park superintendents do have a lot 
of autonomy. They have a lot of authority. They also have 
hugely complex jobs and many, many issues to deal with.
    So it is a question of sorting out those areas, those 
programs, those issues that are more critical perhaps, 
structural fire being one of them because of the potential 
impact that it has, and making that a very high priority. We 
are shifting from just giving them the general guidance to 
mandating that certain standards and codes and things be 
followed.
    But then I think the key is on the front end you have got 
to make it a priority, but we have to have some kind of 
mechanism in place to monitor to see is it being followed, and 
I think so often that is where we struggle in the Park Service. 
We issue a lot of directives from the top, and they may or may 
not get complied with, and we are not out there at the back end 
finding out what is happening. Is it being complied with? There 
is apparently a breakdown in the implementation side at the 
field level.
    So I think one of the things that we need to build in is 
mechanisms where we can assess and evaluate and monitor and be 
sure that these things actually are happening at the field 
level, and I think that can be done and it needs to be done for 
a program like structural fire.
    Mr. Radanovich. Well, granted a Park Service superintendent 
has a lot of responsibilities, and I would think that giving 
that responsibility, the fire marshal type responsibility, to 
somebody else who would have, you know, some authority to go in 
and close structures down, limit access to various places when 
there are too many people in buildings, those kinds of things, 
is giving away some of a superintendent's authority.
    Is it an ego issue with superintendents? Is it the lack of 
the desire to want to give away the authority that has been 
given to them that causes this problem?
    Ms. Finnerty. Well, you know, having been a superintendent 
I can put that hat on. I mean, they like to maintain 
independence. They like to have a lot of authority to make 
decisions at the front line level, and I think that is 
important.
    However, I think we have also got some programs that are 
critical and that are important from a service-wide basis, and 
this is probably one of them, where we may have to look at 
different ways on how we are going to provide oversight. We may 
have to pull some authority back. We may have to put some 
direction and guidance in there and be sure it is being 
complied with.
    And the Director has indicated a willingness perhaps to do 
that in some of these programs, where we have really got to get 
the program back on track, and we have got to be sure we are 
providing safe buildings and accommodations for people.
    Mr. Radanovich. Can you tell me what the National Park 
Service might view as higher priorities than public safety 
issues such as this that might get further attention or better 
attention in the way of funding?
    Ms. Finnerty. Well, certainly public safety issues have got 
to be right up there and important; preservation of resources, 
too. I mean, that is sort of our dual mandate, but clearly this 
is very important, and we have got to figure out a way to make 
it happen, to get ourselves up to standard, and then to 
maintain those standards over time.
    Mr. Radanovich. You would agree with me then that there 
really is no other higher priority than public safety?
    Ms. Finnerty. Well, I would be hard pressed to say what. It 
has certainly got to be at the top of the list, I would think.
    Mr. Radanovich. It has been neglected for a long time.
    My concern, too, as was evidenced by the Forest Service and 
Park Service, not so much the Park Service, but the Forest 
Service change in management practices in the maintenance of 
fuels. Since the Forest Service has determined to use or cut 
back logging as a means of managing fuels on public lands, 
which of course will not necessarily affect the Ford Building 
downtown, but does affect parks like Yosemite and Kings and 
Sequoia and many of the other parks in the West because these 
parks adjoin Forest Service lands.
    This management practice, I think, is going to turn out to 
be a nightmare that you will see a lot more Los Alamos 
situations because of bad forest management practices. Don't 
you see that if that is true, that there is more of a threat to 
structure safety within the national parks as well?
    I mean even with this recent change in management practices 
and in the fact that the forests are more at risk in my view as 
a result of that would further hasten the Park Service to begin 
to properly monitor their structures.
    You may want to respond to that or not, but I think that 
there is not very good management of our resources to the parks 
that are joining Forest Service lands, and it just further 
heightens the critical need for this issue to be taken care of.
    The other thing I do want to mention is that waste, fraud, 
and abuse is a mandate of this committee or part of its 
structure, but mismanagement of resources is one as well. And I 
think mismanagement is a good term that describes the lack of 
protection of the 280 million visitors to our national parks 
with no fire and safety code enforcement.
    With that, Mr. Price, please.
    Mr. Price. Thank you.
    Mr. Wells, I'd like to return to the suggestion you made 
that while funding was important, that there were also 
questions of management that seemed to have very little to do 
with funding levels. I'd like to ask you to elaborate on that 
because in some of the more disturbing aspects of your report, 
it seems there was a failure to perform management tasks that 
really wouldn't have required funding one way or the other, for 
example, these defective shower heads at Yosemite and other 
examples.
    It seems that one important element in reform is improved 
levels of accountability, greater performance incentives. I 
wonder if you could comment on that and elaborate on any 
suggestions you have for more effective implementation.
    Mr. Wells. Yes, sir. Let me start by saying that funding--
there are a couple of different ways I want to go here. Much of 
what we saw are funding issues, but clearly there are things 
like nine cent batteries in smoke detectors.
    At Prince William Park, which we visited, the comment was 
given, ``The reason we do not have batteries in smoke detectors 
or fire extinguishers on the stands were that we suppose or 
suspect that they will be stolen.''
    That is really not a funding, lack of money issue. It is a 
management issue in terms of, there are ways, and we made 
recommendations. There are protective covers that can be placed 
over smoke detectors, minor things. Even billing the guest once 
they leave if, in fact, the fire extinguisher is missing. I 
mean, clearly, these are management type things, not 
necessarily dollars things.
    In terms of the big picture dollars and what is more 
important, this is not a scientific study. I have had an 
opportunity to visit some of the parks looking at the 
recreation fee money that's a new permanent appropriation 
whereby through the collection of fees, the parks can collect a 
projected $150 million worth of additional funds that 80 cents 
on every dollar that is collected can be given to the local 
park superintendent to make decisions about how he can use that 
money to assist and provide an enjoyable experience for the 
visitors to that park.
    Quite frankly, I can say that I have looked at the list of 
the projects that were approved and how that money was going to 
be spent, and what I see is a lot of new things being done or 
constructed or bought and not necessarily repair or fixing 
things that need to be fixed. That is something that I think 
someone ought to be paying some attention to.
    Those are the types of minor management issues that I think 
play into this.
    Mr. Price. In terms of the structures of accountability, 
the incentives to people actually in operational roles to 
attend to these things, any suggestions along those lines?
    Mr. Wells. GAO has been a big proponent of GPRA results 
accounting, accountability, identifying measurements as to what 
is being achieved with the taxpayers' dollars that are given. 
Clearly I think safety and health is one of those issues that 
can identify itself. When you have 1,900 recommendations for 
deficiencies that need to be fixed, accountability ought to lie 
to someone somewhere who did not fix 75 percent of those 
things. That ought to be in a performance rating for a 
superintendent or a park manager as to whether they are 
accomplishing their job and spending the U.S. taxpayer dollars 
wisely.
    Mr. Price. Thank you.
    Ms. Finnerty, you, in your last remarks, returned to a 
theme that came up in the hearing on the concessions program, 
that is, the need to gather better data across the park system 
and the need to use that data to hold park managers more 
accountable for addressing agency priorities.
    I gather both the GAO and the Park Service have noted this 
need for better information and a better use of information. I 
gather you would agree that this organizational problem is 
contributing to the performance problems both in the 
concessions area and in the structural fire safety area.
    Could you address this directly in terms of corrective 
action?
    Ms. Finnerty. I would agree with that. The accountability 
piece is something that the Park Service struggles with in a 
number of program areas, and structural fire is just the 
latest. We had a number of efforts underway to fix this. 
Clearly the organization needs to and is struggling to perform 
in a more business-like manner, to be fully accountable for 
funding and resources and those kinds of things.
    We have always had great difficulty rolling up information 
on a service-wide basis. We now have some systems that are 
starting to do that and we are getting standardized across the 
organization, and I think we will continue to build on those.
    We have had a need and are working toward getting funding 
for an incident reporting system that would certainly help us 
in structural fire, but it would help us in a number of other 
programs, too, and again, just continuing to work to get 
databases built so you can make decisions, based on good data. 
You can move resources to meet GPRA goals, and then you can 
measure the outcomes.
    You know, we are new to the GPRA business, too, and I think 
we are making some progress there and getting things 
standardized. So I think a lot of things are coming into play 
that are going to help us become more business-like and be able 
to measure and hold people specifically accountable for things 
that are and are not getting done.
    Right now it is really more hit and miss. Some regions do a 
better job of it than others, and clearly I think that is 
ultimately where you need to be, is if there are problems and 
issues, then the person that is not dealing with that person or 
persons, they need to be held accountable.
    And I think that is where we still have more work to do. We 
are moving in that direction, but clearly we have some more 
work to do in that area.
    Mr. Price. Well, let me finally just ask both of you to 
suggest quite concretely what kind of data, what kind of 
information we are talking about here in this area of fire 
safety. I am not certain that that is clear, and I am not 
certain to what extent there is a kind of technical fix here 
that might actually be promising.
    You talk about incident reporting. And Mr. Wells, too. What 
sort of data, what sort of information generation are we 
talking about here? Something that would be genuinely helpful.
    Ms. Finnerty. Yes. I mean, there are two things. One, the 
incident reporting system. That is something that we need on a 
Service-wide basis to do just that, report incidents that 
occur, fires that occur and those kind of things.
    Mr. Price. I understand.
    Ms. Finnerty. So that you can track that kind of 
information and data and know where the issues are and where 
the problems are.
    The other baseline of information though that we are going 
to start to compile here in the next couple of weeks starting 
in 25 parks is to actually build a baseline of what are the 
needs building by building throughout the Park Service. We have 
over 20,000 buildings. We are obviously not going to look at 
all of those buildings, and we are going to start with those 
where people are staying overnight, the overnight 
accommodations, the multiple dwellings, places where people 
assemble, places where people are in the most threat, and to 
see what is needed in those buildings.
    Do they have needs for fire suppression? Do they have need 
for detection and those kind of things? Building that kind of a 
baseline, and then you can start channeling your resources to 
address some of those things.
    You know it is difficult to start throwing money at 
problems when you really do not have a good idea what all the 
problems are. I mean, GAO looked at six parks. We have got 379 
parks, and you know, we just need to get a better handle, and 
we are obviously going to start with the ones that potentially 
have the most impact on public safety.
    Mr. Price. Well, and these needs are surely high priority, 
even emergency needs, in terms of the basic fire fighting, fire 
suppressing equipment. I would hope some of this would not 
await the assembling of a full data collection system.
    Ms. Finnerty. Oh, no. By the end of September, we should 
have a pretty good handle on 25 of our big operations and see 
what that is showing is. I mean, is that going to show some 
kind of a trend or pattern or that kind of a thing? And then we 
can certainly start addressing some of those needs because 
there are some funding sources available at the current time 
that we can start marshalling to do some of that work.
    The other thing that we really need to get a handle on is 
this issue of how many parks do we really need fire brigades 
in, versus parks that we really should have good, strong 
agreements with the local fire departments, and then in those 
parks where we do have brigades, we have got to be sure those 
folks are trained because this is a collateral duty, and we do 
not want to be sending people out to fight building fires if 
they are not trained at all.
    So that is the kind of database and information that I 
think once we--we are already starting to get it, and I think 
in the next little bit, we will have even more of that 
information so that we can make better decisions and then hold 
people accountable for those.
    Mr. Price. Mr. Wells, is this the sort of thing that GAO 
had in mind?
    Mr. Wells. Absolutely. Let me give you two specific 
concrete examples in terms of how important data is and what 
type of data would really make a difference. Let me just give 
you two specific examples.
    Early on in my testimony I said we were able to show or say 
that the Park Service had reported 1,400 fires over the last 10 
years. There is no system to collect how many fires they have. 
What they do is have someone monitor daily activity reports 
that come in.
    If a local park had a fire, it may or may not be reported. 
It may or may not have been picked up. That is the type of 
data, looking at lessons learned in terms of what you're 
collecting that would be of benefit to other park 
superintendents. The type of fire that occurred, why the fire 
occurred, flammable material stored too close to something; 
these are lessons learned that someone can look at from a 
preventive standpoint.
    The second point I would make is a lesson learned type 
thing. As referred to earlier, just something as simple as 
making good agreements with local communities to assist in fire 
inspection, we found parks that had no agreements, had never 
even thought about going out and asking for local assistance. 
Could it be possible that a local community could send their 
fire chief over and make suggestions for fire safety?
    Other parks were making great use of that. Nine communities 
surrounding the parks all had been contacted. All were built 
in. Again, unevenness. Data collection allows managers to see 
what is going on elsewhere and say, ``This makes sense. Why 
aren't I doing the same thing?''
    That type of data will go a long ways not necessarily 
providing money, but just providing lessons learned that can 
correct a lot of these things.
    Mr. Price. Thank you very much. Thanks to both of you for 
your testimony.
    Mr. Radanovich. Thank you.
    Mr. Herger.
    Mr. Herger. Thank you, Mr. Chairman.
    And, again, I do thank you, both of our witnesses, for 
being here, and it is obvious that we are all on the same side. 
I have to believe that our goals are the same. It is just 
getting in and taking care of a very serious problem that 
exists.
    And, you know, as I look back at some internal Park Service 
memos, one from December 1997, the Director of the National 
Park Service expressed concern about 1,900 fire safety 
deficiencies, and then back in May 1998 in another internal 
Park Service report stated, ``Sooner or later the National Park 
Service stands to be seriously embarrassed, at a minimum, by 
the catastrophic loss either of an irreplaceable historic 
structure or collection or for human life from a structural 
first.''
    And what I would like to ask is: realistically, Ms. 
Finnerty, when would you say, what is your estimate? I think we 
all need some guidelines or goals that we have.
    What is your goal of when we can repair what we have been 
talking about and be able to have such problems as at the Ford 
Theater, these 1,900 fire safety deficiencies? Do we have a 
time line on this?
    Ms. Finnerty. Well----
    Mr. Herger. And if not, could you perhaps give us what you 
think would be a reasonable time?
    Ms. Finnerty. Why don't we do this, Congressman? Obviously 
those six parks that were identified in the report are all 
working on remedying those deficiencies. What I would like to 
do is prepare for you a detailed report of what has been done, 
what is planned to be done and a time frame and estimate for 
when that--because they are all at various stages.
    Some of them will require funding, and in that case we are 
going to have to identify a funding source, whether it is 
repair/rehab or some other pot of money to be sure we get the 
work done, but clearly, I think that those deficiencies in 
those six parks we need to fix as quickly as we can within 
existing funding or to find other funding to do it.
    And then this assessment that we are going to have done by 
the end of September that looks at 25 additional parks, 
anything that comes out of that, I think, clearly we need to 
look at see how serious those deficiencies are and identify 
ways to remedy those, and hopefully with some time frames built 
into that.
    Mr. Herger. And the concern I have, again, is that--which I 
would not want to have happen. I am sure you would not either--
is 7 years from now we are back here with a hearing, and we are 
still reading reports of how we are working on it.
    Again, I do not think I have heard a time line. I am not 
sure if I hear that this is really a priority sufficient enough 
at this time with the Park Service that someone is stating, 
``This is our goal. By the middle of next year, by the end of 
next year.''
    Mr. Wells mentioned that the local fire marshal would shut 
down if it were privately held in 5 minutes the Ford Theater. I 
mean I do not think it is unreasonable to be asking what is a 
time frame that we are going to have the Ford Theater and other 
1,900 fire safety deficiencies repaired, other than, ``Well, we 
are working on it, and we are going to come up with something 
later on.''
    I really do not know if that is going to be good enough 
that in 7 years from now we will not be in the same place.
    Ms. Finnerty. We will be happy to provide that for you. I 
do not want to throw a date out----
    Mr. Herger. Right.
    Ms. Finnerty [continuing]. That is not correct, and there 
are a number of deficiencies at Ford's Theater, for example, 
which you are very well aware of, and I would like to go back 
and look at all of those, itemize them, and give you some very 
specific concrete information that hopefully will get this 
situation remedied as quickly as possible.
    Mr. Herger. OK. As quickly as possible. Any guesstimate of 
what is quickly as possible?
    And, again, I think it is important that the Park Service 
analyze this, all of these deficiencies, and come up with some 
time frame, whatever it is, that is reasonable, but I think it 
is very important that we have a time frame.
    I mean we all work under time frames.
    Ms. Finnerty. I agree.
    Mr. Herger. That we are not going to continue to be in the 
same situation we have been in.
    Ms. Finnerty. I think that is a reasonable request, and we 
will honor it.
    Mr. Herger. I appreciate that.
    Mr. Wells, do you have any comments on this?
    Mr. Wells. In the spirit of fair, balanced and accurate 
reporting, GAO gets paid to point out deficiencies and things 
that are wrong. I think it is fair for us to say that 1 week 
before this hearing my audit team went to Ford's Theater to 
once again look to see what had been done between May and the 
date that I was going to appear for this hearing.
    I can report to you that these wires that are now shown 
under the door had been removed. Those wires were not at Ford's 
Theater last week.
    These boxes that you see in the ceiling that were covering 
those sprinkler heads are no longer there. The superintendent 
accompanied us when we did this inspection a week ago. The 
superintendent was not there in April when we went in with the 
DC Fire Marshal.
    So there has been immediate corrective action. Prince 
William Park is buying smoke detector batteries. So there are 
immediate actions being taken, and that is encouraging.
    Mr. Herger. That is encouraging, and thank you.
    But we have a number of others. As was mentioned, 1997, 
1,900 just in this one report, and we owe it to the American 
public.
    And I appreciate the fact that I believe I hear a 
commitment that you will get with your associates and come up 
with some time frame, realistic time frame that we can correct 
these.
    Thank you very much.
    Ms. Finnerty. Thank you.
    Mr. Radanovich. Thank you.
    Mr. Gutknecht. Mr. Chairman, if I could, I apologize for 
being late. We had another hearing. In fact, I have got three 
hearings going on at the same time.
    I just wanted to thank you for having this hearing. This is 
an ongoing effort by this budget committee to hold Federal 
agencies accountable, and I think, you know, it is something, I 
think, that our taxpayers, the shareholders of this company we 
call the Federal Government, expect some accountability, and I 
think the more we begin to turn over some rocks, the more 
questions that need to be asked, and I think it is our job.
    And I apologize for not being here earlier, but I 
understand that you have had a vigorous hearing here today, and 
I think it is just one more step in bringing more 
accountability back to our Federal Government.
    So I thank you for having the hearing, and I apologize that 
I have got too many other things going on today.
    Mr. Radanovich. Thank you, Mr. Gutknecht. It is good to 
have you here. We appreciate you making it.
    I would like to clarify one thing, if I could, Ms. 
Finnerty. Will you be submitting a timetable? Is that what I 
understand?
    And will this be a timetable not just for the six parks 
that were mentioned in the report, but will be a timetable for 
the implementation of these initiatives?
    Ms. Finnerty. Yes. We need to go back obviously and gather 
the various--as I understood the request, it was looking at the 
six parks that were in the report and what progress was being 
made and what has been accomplished and what plans to be 
accomplished and when that is going to get done.
    I also offered that once we had these 25 parks that we are 
going to be looking at over the next month or two, depending on 
what those assessments show, that we could have some discussion 
of how big an issue that is going to be and maybe set out some 
time frames for getting some of that resolved over the next 
year or so.
    So I hear it is broader than just the six parks; is that 
correct?
    Mr. Radanovich. Correct, yes.
    What will be the consequences to the managers if they do 
not fulfill these, if they do not clean up the issues in their 
parks? Will there be accountability?
    Ms. Finnerty. Well, the Director has made it pretty clear 
in a recent memo, as recently as a week ago, that he fully 
intends this to be a top priority. These things need to be 
addressed and dealt with, and if they are not. Then the people 
will be held accountable, and their performance will be 
determined by how well they either comply or do not comply. So 
I think that is pretty strong.
    Mr. Radanovich. You mentioned the Director many times. Is 
the Secretary engaged in this as well?
    Ms. Finnerty. The Secretary, of course, all of the reports 
go to the Secretary, and he is certainly well aware of this, 
and he may have had some discussions with the Director. All of 
my conversations have been with the Director. I can tell you it 
definitely has his attention.
    Mr. Radanovich. In closing, I just have one question for 
both of you. Do you think Americans should feel safe when they 
are in these buildings in the national parks?
    Mr. Wells. Concerned, yes.
    Mr. Radanovich. Safer?
    Mr. Wells. Concerned, yes.
    Mr. Radanovich. OK.
    Mr. Wells. They should be concerned.
    Mr. Radanovich. Ms. Finnerty.
    Ms. Finnerty. I would guess I would maybe be concerned 
depending on where they are and depending on what we find. I 
mean, I do not know that I could make a blanket statement 
because, again, we do not have the baseline information on 
everything.
    I know many of our buildings are very safe, and I know that 
buildings that have had renovations and those kinds of things, 
a lot of these issues have been dealt with and addressed.
    So obviously we need to be sure they are all in as good of 
shape as we can get them.
    Mr. Radanovich. OK. Well, I want to thank you both very 
much for coming today and testifying and answering the 
questions.
    I want to thank members of the panel for being a part of 
this hearing.
    And with that, this hearing is closed. Again, thank you 
very much.
    [Whereupon, at 11:23 p.m., the Task Force was adjourned.]


Controlling Wildfires in the Future: What Strategies and Resources Are 
                                Needed?

                              ----------                              


                     WEDNESDAY, SEPTEMBER 13, 2000

                  House of Representatives,
                           Committee on the Budget,
           Task Force on Natural Resources and Environment,
                                                    Washington, DC.
    The Task Force met, pursuant to call, at 2:05 p.m. in room 
210, Cannon House Office Building, Hon. George Radanovich 
(chairman of the Task Force) presiding.
    Chairman Radanovich. Welcome to the hearing. I want to 
advise you that we are waiting for at least one more member to 
show up, so it will be a couple more minutes. Thanks. [Recess.]
    Good afternoon and welcome to the final hearing on the Task 
Force for Natural Resources and the Environment.
    As you know, a large portion of the western United States 
has been on fire this past summer. These fires have been 
nothing short of catastrophic, costing people their homes, 
their possessions and, in the case of some firefighters, their 
lives. In his radio address this weekend, President Clinton 
claimed that extreme weather and lightning strikes helped spark 
the many fires this summer. Others in the Clinton 
administration have made similar claims when explaining these 
fires. And while the claim may be true, it does not tell us why 
the fires have been so intense and so difficult to contain.
    Extreme weather and lightning strikes in the West are not 
some sort of anomaly. Dry weather and lightning have been a 
presence in the West since time immemorial. So the question 
remains, just why are these fires so severe? As we will hear in 
later testimony, the role of the government management policy 
is a key element of this problem. This issue was addressed in a 
General Accounting Office report issued in April of last year, 
well before the fires started. To summarize, the report noted 
that an overaccumulation of vegetation leading to an increasing 
number of large, intense, uncontrollable, and catastrophically 
destructive wildfires were in part a product of the Forest 
Service's decades-old land management practices.
    Those land management practices include an emphasis on 
roadless policies and an overreliance on prescribed burns, with 
little use of mechanical thinning and failure to heed the 
warnings of the past. The new plan we will be discussing 
presents an opportunity to reverse these trends and provide for 
greater public and private sector involvement in fuels 
reduction.
    When the GAO released its report almost 18 months ago, the 
Forest Service recognized 39 million acres of forestland in the 
interior West was at high risk of wildfire.
    Yet, it was not until just a few days ago that the 
President released his plan, accepting the recommendations of 
the Secretary of Agriculture and Secretary of Interior to 
reduce fuels on public lands. While we are pleased this 
proposal has finally been put forth, some of my colleagues and 
I remain skeptical that it will be implemented. After all, 
there has been a minimal response by this administration to the 
years of warnings by the GAO, the Forest Service, and others 
that fires like those burning now would happen someday.
    Additionally, we have some concerns about a number of 
aspects of the plan. I expect that our discussion of the issues 
involved in this proposal will make for a fruitful dialogue 
this afternoon.
    Finally, I want to thank the witnesses for taking the time 
to be here today. They are Barry Hill, the Associate Director 
for Energy and Science Issues at the General Accounting Office; 
Randy Phillips, Deputy Chief for Programs and Legislation at 
the U.S. Forest Service; and Robert Nelson, Senior Fellow for 
Environmental Studies at the Competitive Enterprise Institute 
and a professor of environmental policy at the School of Public 
Affairs at the University of Maryland.
    We look forward to your input on this matter and with that, 
Mr. Price, I will invite you to make any opening statement that 
you wish to do.
    [The prepared statement of Mr. Radanovich follows:]

   Prepared Statement of Hon. George Radanovich, a Representative in 
                 Congress From the State of California

    Good afternoon, and welcome to the final hearing of the Task Force 
on Natural Resources and the Environment.
    As you know, a large portion of the western United States has been 
on fire this past summer. These fires have been nothing short of 
catastrophic, costing people their homes, their possessions--and in the 
case of some firefighters--their lives.
    In his radio address this past weekend, President Clinton claimed 
that ``extreme weather and lightning'' strikes helped spark the many 
fires this summer. Others in the Clinton administration have made 
similar claims when explaining these fires. And while the claim may be 
true, it does not tell us why the fires have been so intense and 
difficult to contain. Extreme weather and lightning strikes in the West 
are not some sort of anomaly. Dry weather and lightning have been a 
presence in the West since time immemorial. So the question remains--
just why are these fires so severe? As we will hear in later testimony, 
the role of government management policy is a key element of the 
problem.
    This issue was addressed in a General Accounting Office report 
issued in April of last year, well before the fires started. To 
summarize, the report noted that an ``overaccumulation of vegetation'' 
leading to ``an increasing number of large, intense, uncontrollable, 
and catastrophically destructive wildfires'' were in part a product of 
the Forest Service's decades-old land management practices.
    Those land management practices include an emphasis on roadless 
policies, an over-reliance on prescribed burns with little use of 
mechanical thinning, and a failure to heed warnings of the past. The 
new plan we will be discussing presents an opportunity to reverse these 
trends and provide for greater public and private sector involvement in 
fuels reduction.
    When the GAO released its report almost 18 months ago, the Forest 
Service recognized 39 million acres of forestland in the interior West 
was at high risk of wildfire.
    Yet, it was not until just a few days ago that the President 
released his plan--accepting the recommendations of the Secretary of 
Agriculture and Secretary of Interior--to reduce fuels on public lands. 
While we are pleased that this proposal has finally been put forth, 
some of my colleagues and I remain skeptical that it will be 
implemented. After all, there has been a minimal response by this 
administration to the years of warnings by the GAO, Forest Service and 
others that fires like those burning now would happen someday.
    Additionally, we have concerns about a number of aspects of the 
plan. I expect that our discussion of the issues involved in this 
proposal will make for a fruitful dialogue this afternoon.
    Finally, I want to thank the witnesses for taking the time to be 
here today. They are Barry Hill, Associate Director for Energy and 
Science issues at the General Accounting Office; Randy Phillips, Deputy 
Chief for Programs and Legislation at the U.S. Forest Service; and 
Robert Nelson, Senior Fellow for Environmental Studies at the 
Competitive Enterprise Institute, and professor of environmental policy 
at the School of Public Affairs at the University of Maryland. We look 
forward to your input on this matter.

    Mr. Price. Thank you, Mr. Chairman. I don't have a formal 
statement but I do want to welcome the witnesses here and thank 
them for appearing.
    As we know, the 2000 wildfire season has been one of the 
most serious on record, with more than 6\1/2\ million acres of 
public and private land being burned. That is more than double 
the 10-year national average. We will be interested in learning 
more today about the reasons for this and the ways that we can 
protect ourselves in the future.
    There are lots of allegations and accusations that have 
been raised, and naturally when a catastrophe like this occurs, 
you see some of that. We would like to know about the 
relationship of logging policy to this year's wildfires and 
their severity. What are the indications in terms of more or 
less commercial logging and its relationship to the potential 
for disaster? Are there relationships to the so-called roadless 
initiatives or any other policies currently in place? And what 
are the funding implications for these fire-related Forest 
Service programs, in terms of the direction in which they ought 
to go.
    I am sure that you will help us understand the complexity 
of this issue. It is not a matter of simplistic solutions. But 
we await your testimony and look forward to your contributing 
to the ongoing deliberations over how to deal with this very 
serious national crisis. Thank you.
    Chairman Radanovich. Thank you, Mr. Price.
    Congressman Herger, do you have an opening statement you 
would like to make?
    Mr. Herger. I do. Thank you very much, Mr. Chairman.
    I particularly appreciate you having this hearing on an 
issue that is so important to our Nation and certainly to the 
northeastern part of California that I represent, which has 
parts of or all of 11 national forests in it. It is the site, 
regrettably, of the Storrie Fire that was in the news, national 
news, for about a month and a half earlier this summer; some 
40,000 acres burned there, about 80,000 acres throughout my 
district.
    And again, this hearing is so important because the people 
of our Nation and certainly of our district deserve, I believe, 
accountability from those who are managing our forests.
    If we look back, it is not like we did not know our forests 
were going to burn. It is not if they are going to burn, it is 
when they are going to burn unless we do something about it.
    I am reminded of a report by the National Commission on 
Wildfire Disasters in 1994 which warned of an extreme fire 
hazard for the extensive buildup of dry, highly flammable, 
forest fields across the West. That was 6 years ago. Then in 
1995 the Forest Service itself in a report estimated that one-
third or 39 million acres of interior West lands--I am quoting 
here--it manages were at risk of, quote, ``large 
uncontrollable, catastrophic wildfires,'' close quote. That is 
5 years ago the Forest Service itself was aware of this. Today 
that has gone from 39 million to 56 million acres at risk.
    I guess we are wondering why this is happening; why 
something has not happened over the last 5 or 6 years, and I am 
sure our witnesses will shed some light on that. What is 
important is that we change this, what I feel is a lack of 
policy, lack of implementing policy, including the Quincy 
Library legislation which I passed, or I authored, in this 
House a year ago; passed overwhelmingly, almost unanimously 
passed out of the Senate on bipartisan vote--Senator Feinstein 
carried it in the Senate--and which is a plan to help prevent 
fires and yet is being--the Forest Service is throwing every 
monkey wrench they can in the system not to implement that 
which Congress has overwhelmingly said to implement.
    So there are a lot of these questions I have, and hopefully 
they will be answered by this hearing today. Thank you very 
much, Mr. Chairman.
    [Material submitted by Mr. Herger follows:]
                                 Hon. Wally Herger,
                                  House of Representatives,
                                Washington, DC, September 20, 2000.
Hon. John Kasich,
Chairman, Committee on the Budget, Cannon House Office Building, 
        Washington, DC.
    Dear Mr. Kasich: Pursuant to the unanimous consent request 
made at the Task Force on Natural Resources and the 
Environment's September 13, 2000, hearing, I hereby request 
that the attached report from the Congressional Research 
Service be made a part of the hearing record. The report 
relates to a line of questioning pursued during the hearing 
regarding the impact of cutting trees on the frequency of 
wildfires on public lands.
    Thank you for your attention to this matter.
            Sincerely,
                                              Wally Herger,
                                                Member of Congress.

          [Memorandum from the Congressional Research Service]

                                                September 20, 2000.
From: Ross W. Gorte, Natural Resource Economist and Senior Policy 
        Analyst, Resources, Science, and Industry Division.
Subject: Forest Fires and Forest Management.
    Following release of an August CRS memorandum on timber harvests 
and forest fires, CRS has received numerous comments and requests for 
clarification and analysis. The earlier memorandum statistically 
explored the limited and possibly misleading question of a potential 
relationship between acres burned and timber volume harvested in the 
national forests, without providing background information: (1) on the 
context of the relationship between forest management and wildfires 
more generally; (2) on the limits of the data used for statistical 
analysis; or (3) on the limitations of the statistical techniques 
employed. This memo broadens the discussion with more complete 
recognition of wildfires as an enormously complex phenomenon; for more 
information, see CRS Report 95-511 ENR, Forest Fires and Forest Health. 
1
---------------------------------------------------------------------------
    \1\ A CRS long report updating and expanding on the information in 
Forest Fires and Forest Health is in preparation.
---------------------------------------------------------------------------
    The volume of timber harvested is not the principal forest 
management question involved in assessing the extent and severity of 
fires. Public and private forestry practices and policies--commercial 
logging and slash disposal, thinning, road construction or obliteration 
(closing the road and attempting to restore it to near-natural 
conditions), roadless area protection, etc.--can alter a forest's 
susceptibility and resistance to fire and other threats, and its 
resilience to changes. However, other independent variables, such as 
recent and past weather patterns (e.g., short-term and long-term 
drought, wind speeds and patterns) and site-specific factors (e.g., 
slope, aspect, and fuel loads) are critical factors in determining the 
extent and severity of any particular fire.
    The extent to which timber harvesting from the national forests in 
any particular year, or even over several years, affects fire extent 
and/or severity in a given year cannot be determined from the available 
data, as suggested by the following table and figure that were included 
in the August 22 memorandum. 2 For example, two of the four 
worst fire seasons in the past 80 years--1987 and 1988--occurred in a 
decade with relatively high timber harvest levels, yet the other two 
worst fire seasons--1994 and 1996--occurred in a decade with relatively 
low timber harvest levels. In other years with high harvest levels 
(e.g., 1986 and 1989), the fire seasons were relatively mild, while 
other years with low harvest levels (e.g., 1995 and 1997), also had 
relatively mild fire seasons. Thus, these data suggest that one cannot 
draw conclusions about the severity of a fire season based on the level 
of timber harvested nationally.
---------------------------------------------------------------------------
    \2\ These data re only for Forest Service protected lands. Of the 
6.8 million acres burned to date in the 2000 fire season, 33 percent of 
the acres burned have been Forest Service protected lands. Other lands 
burned include other Federal lands (36 percent) and State and private 
lands (31 percent).
---------------------------------------------------------------------------
    Although one cannot draw conclusions at the national level, at the 
local level, on a specific site, timber harvesting can affect the 
extent and intensity of wildfires. The severity of a fire (rate of 
spread and level of damage) depends on numerous site-specific factors, 
such as the slope and aspect of the site and the flora and fuel load on 
the site, as well as on both general and site-specific weather factors, 
such as humidity and fuel moisture content, ambient temperature, and 
especially wind. Timber harvesting can alter the flora and fuels on a 
site, removing the relatively large diameter wood that can be converted 
into wood products, but leaving behind the ``slash'' (e.g., the 
branches and needles). Fire protection is one of the principal reasons 
for disposing of logging slash. 3 Slash disposal following 
the timber harvest is standard practice on public and private lands, 
and in most national forest timber sales, the Forest Service requires 
purchasers to deposit funds into a special account (called ``brush 
disposal'') which are then permanently available to the agency to pay 
for slash disposal. 4 However, information on the extent of 
various slash treatments, and on the fuel reduction resulting from such 
treatments is lacking. In addition, other treatments, such as 
precommercial thinning and prescribed burning, are also used to reduce 
fuel loads, and might be as, or more, effective and efficient at 
reducing fuel loads as timber harvesting with slash disposal, depending 
on the site-specific circumstances.
---------------------------------------------------------------------------
    \3\ David M. Smith, The Practice of Silviculture, 7th ed. (New 
York, NY: John Wiley & Sons, Inc., 1962), pp. 312-313.
    \4\ The U.S. General Accounting Office (Forest Service: Better 
Procedures and Oversight Needed to Address Indirect Expenditures, GAO/
RCED-98-258, August 1998) found that, from 1993-1997, the Forest 
Service had spent nearly $40 million (27 percent) of deposits to the 
brush disposal fund to pay for overhead and other expenses not directly 
related to the purposes of the brush disposal fund.
---------------------------------------------------------------------------
    Finally, it should be noted that the public's attention generally 
focuses on the extent of fires (i.e., acres burned), but not on the 
severity or intensity of fires. However, intensity is of greater 
consequence for assessing the effects of fires. ``Light'' fires that 
burn surface fuels (e.g., grasses and needles) at relatively low 
intensity can produce significant ecological benefits, even if they 
cover large areas; recognition of these benefits led to modification of 
the policy of aggressive fire suppression efforts on all wildfires in 
the late 1970's, and is the basis for today's prescribed burning 
efforts. Areas with heavier fuel loads may burn more intensely than 
areas with lower fuel loads, and thus may cause more resource damage, 
as well as be more likely to burn structures. Timber harvesting (with 
effective slash disposal) and other treatments remove fuels. It is 
logical, and widely accepted, that reducing fuels will reduce the 
severity of wildfires, but no research literature documenting this 
relationship has been found. Furthermore, damage appraisal methods are 
not adequate to quantify the magnitude of the benefits of various fuel 
treatments and their relationship to other factors contributing to 
wildfire area and intensity.

          TABLE 1.--NATIONAL FOREST TIMBER HARVESTS AND ACRES BURNED ON FOREST SERVICE-PROTECTED LANDS
                               [In millions of board feet and total acres burned]
----------------------------------------------------------------------------------------------------------------
         Fiscal year           Harvest volume    Acres burned      Fiscal year    Harvest volume   Acres burned
----------------------------------------------------------------------------------------------------------------
1980.........................         9,178.2         308,400   1990............        10,500.3         346,350
1981.........................         8,036.2         209,631   1991............         6,558.9         163,540
1982.........................         6,747.3          44,622   1992............         7,289.6         585,052
1983.........................         9,244.0          66,498   1993............         5,916.9         208,376
1984.........................        10,548.7         141,139   1994............         4,815.3       1,476,402
1985.........................        10,941.3         568,297   1995............         3,865.9         218,993
1986.........................        11,786.5         353,128   1996............         3,724.6       1,092,672
1987.........................        12,712.1       1,162,757   1997............         3,285.3         143,663
1988.........................        12,596.4       1,549,955   1998............         3,297.6         172,582
1989.........................        11,950.9         475,799   1999............         2,938.6         605,000
----------------------------------------------------------------------------------------------------------------

Figure 1. Forest Service Acres Burned in Relation to Millions of Board 
                                Feet Cut



    Chairman Radanovich. Thank you, Mr. Herger. We look forward 
to having some answers to these questions.
    I would ask unanimous consent that all members and 
witnesses would be given 5 days to submit non-extraneous 
statements for the record. If there are no objections, it is so 
ordered.
    Again, I want to welcome our guests and those testifying.We 
will allow every speaker to give their opening statement, and 
when we are done with Mr. Nelson, we will go ahead and open up 
for questions. If you read your statements first and then we 
will go to questions afterwards, that is how we will start this 
thing.
    Chairman Radanovich. Welcome, Mr. Hill. And again, please 
begin your testimony. Let me properly introduce you as the 
Associate Director for Energy and Science Issues at the General 
Accounting Office.
    Mr. Hill, please begin.

 STATEMENT OF BARRY T. HILL, ASSOCIATE DIRECTOR FOR ENERGY AND 
           SCIENCE ISSUES, GENERAL ACCOUNTING OFFICE

    Mr. Hill. Thank you, Mr. Chairman and members of the 
committee. I will briefly summarize my prepared statement and 
submit the full statement for the record.
    Chairman Radanovich. Sure.
    Mr. Hill. It is very sobering to be here today to discuss 
the status of efforts to reduce the risk of catastrophic 
wildfires to communities and natural resources in dry, lower-
elevation regions of the interior western United States. So far 
this year, such wildfires have burned over 6.5 million acres of 
public and private land, and that is more than twice the 10-
year national average and more than in any other year in 
decades.
    Lives have been lost, over 1,000 homes have been destroyed, 
and the estimated damage to human property and forest and 
rangeland and ecosystems totals billions of dollars. The cost 
to the United States Treasury to suppress these fires and to 
rehabilitate and restore burned areas will exceed $1 billion in 
this fiscal year alone.
    Reducing the future risk of catastrophic wildfires to human 
lives and property as well as to the forest and rangeland 
ecosystems will require development and implementation of a 
comprehensive management strategy that includes three 
components. Two of these components are reactive: Suppressing 
wild fires after they have become wildfires, and rehabilitating 
and restoring forests and rangelands after they have burned. 
The third component is proactive. That is, reducing the risk of 
future fires by removing accumulated hazardous fuels including 
small trees, underbrush, and dead vegetation.
    As requested, my testimony today will focus on the 
proactive hazardous fuel reduction component. Specifically, I 
will discuss the following three points: First, why conditions 
on Federal forests and rangelands have reached the point that 
they now pose a significant risk to the nearby communities and 
to the ecological sustainabilty of lands and natural resources. 
Second, the history and status of efforts by the Department of 
Agriculture's Forest Service and the Department of Interior to 
reduce these risks. And third, budget-related issues that 
should be addressed to better ensure that the agencies spend 
effectively and account accurately for funds appropriated to 
reduce hazardous fuels. I may also add that my comments today 
are based primarily on GAO products that we have issued over 
the last decade.
    In summary, the media and others have attributed much of 
the blame for this year's destructive wildfire season to the 
prolonged drought that has gripped the interior West. However, 
the Forest Service has observed that in hindsight, quote, 
``Uncontrollable wildfires should be seen as a failure of land 
management and public policy, not as an unpredictable act of 
nature,'' end quote.
    Past land management practices that contributed to current 
conditions included harvesting timber by selectively removing 
the larger, more valuable, fire-tolerant trees or by 
clearcutting, which is removing all of the trees from a site at 
one time.
    In addition, millions of acres of forest and wildlands were 
cleared for agricultural crops and livestock pastures, and 
grass cover and soil were lost as a result of intensive 
livestock grazing. Moreover, during most of the 20th century, 
the Federal Government's policy was to suppress all fires, and 
for 75 years, Federal land management agencies were highly 
effective at implementing this policy.
    The Federal Government's approach to reducing hazardous 
fuels has evolved over time in response to new information and 
events. From the 1950's to the 1970's, land managers within 
Interior experimented with allowing fires ignited both by 
lightning and by the managers themselves to burn under 
controlled conditions. By 1972, both Interior and the Forest 
Service had formally adopted the policy of using fire as a tool 
to reduce the buildup of hazardous fuels. Until recently both 
agencies continued to emphasize prescribed fire as the tool of 
choice in reducing the accumulation of hazardous fuels.
    However, in the past several years, land managers have 
increasingly recognized that in many areas the volume of 
accumulated fuels has increased to the point that thinning and 
mechanical treatments must be used before fire can be 
reintroduced into the ecosystems.
    Both the Congress and the administration now appear to be 
prepared to fund an aggressive campaign to reduce hazardous 
fuels. It is therefore imperative that the Forest Service and 
Interior act quickly to develop a framework to spend 
effectively, and account accurately for what they accomplish 
with these funds. For example, according to the Forest Service, 
priority for treatments to reduce hazardous fuels should be 
given to areas where the risk of catastrophic wildfires is the 
greatest to communities, watersheds, ecosystems, or species. 
Identifying these areas is particularly important in that even 
if the agency receives the $12 billion it says it needs over 
the next 15 years to reduce hazardous fuels, it estimates that 
at the end of that time, 10 million acres would either remain 
at high risk of long-term damage or would have already suffered 
long-term damage as a result of catastrophic wildfires.
    However, currently neither the Forest Service nor the 
Interior knows how many communities, watersheds, ecosystems and 
species are at high risk of catastrophic wildfires, where they 
are located, and what it will cost to lower this risk. 
Therefore, they cannot prioritize them for treatment or inform 
the Congress about how many will remain at high risk after the 
appropriated funds are expended.
    In addition, rather than allocating funds to the highest 
risk area, the Forest Service allocates funds for hazardous 
fuels reduction on the basis of the numbers of acres treated. 
Similarly, both the Forest Service and the Interior use the 
number of acres treated to measure and report to the Congress 
their progress in reducing the threat of catastrophic 
wildfires, rather than using the number of acres treated in the 
highest priority areas or reductions in areas at high risk of 
long-term damage from wildfires.
    In closing, we are faced with a pay-me-now or pay-me-later 
situation in which paying me now is likely the most cost-
effective alternative. However, restoring fire-adapted 
ecosystems and protecting the communities that have developed 
alongside and in these ecosystems will require that the 
resources for reducing the threat of catastrophic wildfires be 
well spent. To do so will require that the Forest Service and 
the Interior clearly identify not only how they spend funds 
appropriated to reduce hazardous fuels, but also what they will 
accomplish with these funds.
    Mr. Chairman, that concludes my statement.
    Chairman Radanovich. Thank you.
    [The prepared statement of Mr. Hill follows:]

Prepared Statement of Barry T. Hill, Associate Director for Energy and 
             Science Issues, U.S. General Accounting Office

    Mr. Chairman and members of the Task Force, it is very sobering to 
be here today to discuss the status of efforts to reduce the risk of 
catastrophic wildfires to communities and natural resources in dry, 
lower-elevation regions of the interior western United States. So far 
this year, such wildfires have burned over 6.5 million acres of public 
and private land--more than twice the 10-year national average and more 
than in any other year in decades. Lives have been lost, over 1,000 
homes have been destroyed, and the estimated damage to human property 
and forest and rangeland ecosystems totals billions of dollars. The 
costs to the U.S. Treasury to suppress these fires and to rehabilitate 
and restore burned areas will exceed $1 billion in this fiscal year 
alone.
    Reducing the future risk of catastrophic wildfires to human lives 
and property as well as to forest and rangeland ecosystems will require 
development and implementation of a comprehensive management strategy 
that includes three components. Two are reactive--suppressing wildland 
fires after they have become wildfires and rehabilitating and restoring 
forests and rangelands after they have burned. The third component is 
proactive--reducing the risk of future fires by removing accumulated 
hazardous fuels, including small trees, underbrush, and dead 
vegetation. As requested, our testimony today will focus on the 
proactive hazardous fuels reduction component. Specifically, we will 
discuss (1) why conditions on Federal forests and rangelands have 
reached the point that they pose a significant risk to nearby 
communities and to the ecological sustainability of lands and natural 
resources, (2) the history and status of efforts by the Department of 
Agriculture's Forest Service and the Department of the Interior to 
reduce this risk, and (3) budget-related issues that should be 
addressed to better ensure that the agencies spend effectively and 
account accurately for funds appropriated to reduce hazardous fuels. 
Our comments are based primarily on GAO products issued over the last 
decade.\1\
---------------------------------------------------------------------------
    \1\ See App. I for Relevant GAO Products on Hazardous Fuels 
Reduction.
---------------------------------------------------------------------------
    In summary:
     The media and others have attributed much of the blame for 
this year's destructive wildfire season to the prolonged drought that 
has gripped the interior West. However, the Forest Service has observed 
that, in hindsight, ``uncontrollable wildfire should be seen as a 
failure of land management and public policy, not as an unpredictable 
act of nature.'' Past land management practices that contributed to 
current conditions included harvesting timber by selectively removing 
the larger, more valuable fire-tolerant trees or removing all of the 
trees from a site at one time (clearcutting). In addition, millions of 
acres of forests and wildlands were cleared for agricultural crops and 
livestock pastures, and grass cover and soil were lost as a result of 
intensive livestock grazing. Moreover, during most of the 20th century, 
the Federal Government's policy was to suppress all fires, and for 75 
years, Federal land management agencies were highly effective in 
implementing this policy.
     The Federal Government's approach to reducing hazardous 
fuels has evolved over time in response to new information and events. 
From the 1950's to the 1970's, land managers within Interior 
experimented with allowing fires ignited both by lightning and by the 
managers themselves to burn, under controlled conditions. By 1972, both 
Interior and the Forest Service had formally adopted the policy of 
using fire as a tool to reduce the buildup of hazardous fuels. Until 
recently, both agencies continued to emphasize prescribed fire as the 
tool of choice in reducing the accumulation of hazardous fuels. 
However, in the past several years, land managers have increasingly 
recognized that in many areas, the volume of accumulated fuels has 
increased to the point that thinning and mechanical treatments must be 
used before fire can be reintroduced into the ecosystems.
     Both the Congress and the administration are now prepared 
to fund an aggressive campaign to reduce hazardous fuels. It is, 
therefore, imperative that the Forest Service and Interior act quickly 
to develop a framework to spend effectively and to account accurately 
for what they accomplish with the funds. For example, according to the 
Forest Service, priority for treatments to reduce hazardous fuels 
should be given to areas where the risk of catastrophic wildfires is 
the greatest to communities, watersheds, ecosystems, or species. 
However, currently neither the Forest Service nor Interior knows how 
many communities, watersheds, ecosystems, and species are at high risk 
of catastrophic wildfire, where they are located, or what it will cost 
to lower this risk. Therefore, they cannot prioritize them for 
treatment or inform the Congress about how many will remain at high 
risk after the appropriated funds are expended. In addition, rather 
than allocating funds to the highest-risk areas, the Forest Service 
allocates funds for hazardous fuels reduction on the basis of the 
number of acres treated. Similarly, both the Forest Service and 
Interior use the number of acres treated to measure and report to the 
Congress their progress in reducing the threat of catastrophic 
wildfires rather than using the number of acres treated in the highest-
priority areas or reductions in areas at high risk of long-term damage 
from wildfire.
the increasing risk of uncontrollable wildfires reflects an unintended 
 
        Consequence of Past Land Management and Public Policy
    The media and others have attributed much of the blame for this 
year's destructive wildfire season to the prolonged drought that has 
gripped the interior West. However, the Forest Service has observed 
that, in hindsight, ``uncontrollable wildfire should be seen as a 
failure of land management and public policy, not as an unpredictable 
act of nature.''\2\
---------------------------------------------------------------------------
    \2\ Course to the Future: Positioning Fire and Aviation Management, 
U.S. Department of Agriculture, Forest Service (May 1995).
---------------------------------------------------------------------------
    More than a century ago, most forests in the interior West and 
their associated species were fire-adapted and some--known as short-
interval, fire-adapted ecosystems--relied on frequent, low-intensity 
fires to cycle nutrients, check the encroachment of competing 
vegetation, and maintain healthy conditions. However, before the turn 
of the last century, these short-interval, fire-adapted ecosystems and 
species--such as ponderosa and other long-needle pines--began to be 
replaced by fire-intolerant ecosystems and species--such as Douglas and 
other firs. These changes resulted mostly from the nation's increased 
demand for fiber and food. As a result, (1) the larger, more valuable 
fire-tolerant trees were removed by selective timber harvesting or all 
of the trees from a site were removed at one time (clearcutting); (2) 
millions of acres of forests and wildlands were cleared for 
agricultural crops and livestock pastures; (3) grass cover and soil 
were lost as a result of intensive livestock grazing; and (4) burning 
by Native Americans was curtailed to accommodate other land uses. In 
addition, during most of the 20th century, the Federal Government's 
policy was to suppress all fires, and for 75 years, Federal land 
management agencies were highly effective in implementing this policy.
    As a result of these human activities, the composition and 
structure of the forests changed from open, park-like stands of 
approximately 50 large, older-aged, and well-spaced fire-tolerant trees 
per acre to dense ``dog-hair'' thickets of more than 200 mostly small, 
fire-intolerant trees per acre. Unnaturally dense forests cause 
individual trees to compete for limited quantities of water, and during 
drought conditions, weakened trees become susceptible to insect 
infestations and disease outbreaks. Such trees die in unnaturally high 
numbers, adding to hazardous fuel loads.
    The composition of many rangelands has also changed. Native grass 
species, including Idaho fescue and bluestem, have been replaced by 
invasive plant species, such as cheat grass, that fuel and thrive on 
wildland fires. These exotic species follow fire wherever it goes, are 
opportunistic, and repopulate a burned landscape faster than native 
species. Cheat grass grows earlier, quicker, and higher than native 
grasses and then dies, dries, and becomes fuel for the next year's 
fires.
    As the composition and structure of public forests and rangelands 
in the interior West were changing, so too was their interface with 
human structures and other property. Communities have developed 
alongside and in these forests and rangelands, resulting in a patchwork 
of homes interspersed among public lands. These areas are collectively 
referred to as the ``wildland-urban interface.''

   The Federal Government's Approach to Reducing Hazardous Fuels has 
                           Evolved Over Time
    The Federal Government's approach to reducing hazardous fuels has 
evolved over time in response to new information and events. From the 
1950's to the 1970's, land managers within the Department of the 
Interior experimented with so-called ``prescribed fire programs.'' 
Under these programs, fires ignited by lightning as well as by land 
managers themselves are allowed to burn, under controlled conditions, 
so that the ecological benefits of fire can be reintroduced into fire-
adapted ecosystems.
    By 1972, both Interior and the Forest Service had formally adopted 
the policy of using fire as a tool to reduce the buildup of hazardous 
fuels. From then until 1988, Federal land managers allowed thousands of 
prescribed fires to burn in wildlands. This changed in 1988, when a 
number of fires started by lightning in and around Yellowstone National 
Park burned out of control, resulting in a controversy over what the 
media termed the government's ``let burn'' policy. In 1989, an 
interagency review team reaffirmed the benefits of fire and tasked 
Federal land managers to (1) reevaluate the use of management-ignited 
fires and other methods for reducing hazardous fuels and (2) develop 
fire management plans for each of their land units before allowing a 
prescribed fire to burn. However, some land managers continued to 
subscribe to the policy of suppressing all fires, and some land units 
were slow to develop the required plans.
    During the early 1990's, both the Forest Service and Interior 
emphasized prescribed fire as the tool of choice in reducing the 
accumulation of hazardous fuels. As recently as in its fiscal year 1997 
budget justification, Interior made no mention of other methods to 
reduce accumulated hazardous fuels, such as thinning dense stands of 
trees and mechanically removing underbrush. However, in the past 
several years, land managers have increasingly recognized that in many 
areas, the volume of accumulated fuels has increased to the point that 
thinning and mechanical treatments must be used before fire can be 
reintroduced into the ecosystems.

   The Forest Service and Interior Must Develop a Framework to Spend 
  Effectively and to Account Adequately for What They Accomplish With 
              Funds Appropriated to Reduce Hazardous Fuels
    An aggressive campaign to reduce accumulated fuels will require 
money. However, before this fire season, neither the administration nor 
the Congress assigned a high funding priority to reducing the threat of 
catastrophic wildfires. Both the Congress and the administration are 
now prepared to fund an aggressive campaign to reduce hazardous fuels. 
It is, therefore, imperative that the Forest Service and Interior act 
quickly to develop a framework to spend effectively and to account 
accurately for what they accomplish with the funds.

               A Lack of Funds Has Been a Limiting Factor
    For a number of years, both the Congress and the administration 
have been aware of the increasingly grave risk of catastrophic 
wildfires as well as the need to aggressively reduce hazardous fuels. 
However, until recently, neither had assigned a high funding priority 
to reducing the threat.
    In a 1994 report, the National Commission on Wildfire Disasters 
stated that:
    ``The vegetative conditions that have resulted from past management 
policies have created a fire environment so disaster-prone in many 
areas that it will periodically and tragically overwhelm our best 
efforts at fire prevention and suppression. The resulting loss of life 
and property, damage to natural resources, and enormous costs to the 
public treasury, are preventable. If the warning in this report is not 
heeded, and preventative actions are not aggressively pursued, the 
costs will, in our opinion, continue to escalate.''\3\
---------------------------------------------------------------------------
    \3\ Report of the National Commission on Wildfire Disasters (1994). 
The Commission was established on May 9, 1990, by the Wildfire Disaster 
Recovery Act of 1989 (P.L. 101-286).
---------------------------------------------------------------------------
    The Commission observed that: ``The question is no longer if 
policymakers will face disastrous wildfires and their enormous costs, 
but when.'' To mitigate this risk, the Commission recommended, among 
other things, that Federal land management policies, programs, and 
budgets place a high priority on reducing hazardous fuels in high-risk 
wildland ecosystems ``for at least a decade or more.''
    Similarly, in 1995, the administration undertook a comprehensive 
interagency review of wildland fire policy. On the basis of the review, 
which was summarized in a 1995 statement,\4\ the Departments of 
Agriculture and the Interior predicted serious and potentially 
permanent environmental destruction and loss of private and public 
resource values from large wildfires.
---------------------------------------------------------------------------
    \4\ Federal Wildland Fire Management Policy and Program Review, 
Department of the Interior and Forest Service, Department of 
Agriculture (Washington, D.C.: 1995).
---------------------------------------------------------------------------
    In April 1999, we reported that 39 million acres on national 
forests in the interior West are at high risk of catastrophic wildfire 
and that the cost to the Forest Service to reduce fuels on these lands 
could be as much as $12 billion over the next 15 years, or an average 
of about $725 million annually. We observed that this was more than 10 
times the $65 million appropriated for reducing fuels in fiscal year 
1999, and that the agency, contrary to its earlier plans, had requested 
the same amount for fiscal year 2000. We also observed that funding to 
address the increasingly grave risk of catastrophic wildfires may be 
too little too late.
    In December 1999, the Forest Service estimated that it would need 
up to $825 million a year and almost $12 billion over 15 years to 
reduce fuels on 40 million acres nationwide.\5\ However, the agency's 
fiscal year 2001 budget justification, submitted to the Congress 2 
months later, requested $75 million.
---------------------------------------------------------------------------
    \5\ Protecting People and Sustaining Resources in Fire-Adapted 
Ecosystems: A Cohesive Strategy (Draft), Forest Service (Dec. 1999).
---------------------------------------------------------------------------
    Interior has not, to our knowledge, developed similar cost 
estimates. However, the Department spent about $34 million in both 
fiscal years 1999 and 2000 to reduce hazardous fuels. It requested $52 
million for these activities in fiscal year 2001, even though, 
according to Interior, more than half of the 95 million acres of 
Federal wildlands identified as requiring periodic burning or other 
fuel treatment are on lands managed by the Department.

    The Congress and the Administration Agree that Funds Should Be 
                  Increased to Reduce Hazardous Fuels
    The Congress and the administration now agree that money should be 
made available to begin an aggressive campaign to reduce hazardous 
fuels. The Congress is considering appropriating an additional $240 
million--about $120 million to both the Forest Service and Interior--in 
fiscal year 2001 to reduce hazardous fuels in high-risk wildland-urban 
interfaces. Similarly, for fiscal year 2001, the administration is now 
requesting an additional $115 million for the Forest Service and an 
additional $142 million for Interior.\6\ Thus, between $367 million and 
$395 million may be available in fiscal year 2001 to reduce hazardous 
fuels. Moreover, the Forest Service estimates that up to an additional 
$325 million a year could be made available from within its existing 
budget to fund hazardous fuels reduction activities and research.
---------------------------------------------------------------------------
    \6\ Managing the Impact of Wildfires on Communities and the 
Environment: A Report to the President in Response to the Wildfires of 
2000, U.S. Departments of Agriculture and the Interior (Sept. 8, 2000).
---------------------------------------------------------------------------

               Accountability Must Now Become a Priority
    With the Congress and the administration now prepared to double or 
triple the Forest Service's and Interior's funding for reducing 
hazardous fuels and with up to five times the current fiscal year's 
appropriation already available from within the Forest Service's 
existing budget for these activities and related research, we believe 
that the Forest Service and Interior must act quickly to develop a 
framework to spend effectively and to account accurately for what they 
accomplish with the funds.
    For example, according to the Forest Service, priority for 
treatments to reduce hazardous fuels should be given to areas where the 
risk of catastrophic wildfires is the greatest to communities, 
watersheds, ecosystems, or species. However, currently neither the 
Forest Service nor Interior knows how many communities, watersheds, 
ecosystems, and species are at high risk of catastrophic wildfire, 
where they are located, or what it will cost to lower this risk. 
Therefore, they cannot prioritize them for treatment or inform the 
Congress about how many will remain at high risk after the appropriated 
funds are expended. According to the report on managing the impact of 
wildfires released by the administration last Friday, regional and 
local interagency teams will be assigned the responsibility for 
identifying communities that are most at risk.
    Moreover, rather than allocating funds to the highest-risk areas, 
the Forest Service allocates funds for hazardous fuels reduction to its 
field offices on the basis of the number of acres treated. Thus, the 
agency's field offices have an incentive to focus on the easiest and 
least costly areas, rather than on those that present the highest risks 
but are often costlier to treat, including especially the wildland-
urban interfaces. Similarly, both the Forest Service and Interior use 
the number of acres treated to measure and report to the Congress their 
progress in reducing the threat of catastrophic wildfires. For 
instance, they report that they have increased the number of acres 
treated to reduce hazardous fuels from fewer than 500,000 acres in 
fiscal year 1994 to more than 2.4 million acres in fiscal year 2000. 
However, they cannot identify how many of these acres are within areas 
at high risk of long-term damage from wildfire.
    The Forest Service and Interior note that reducing the threat to 
communities, watersheds, ecosystems, and species can often take years 
and that annual measures of progress must, therefore, focus on actions 
taken. We agree, but believe that they must be able to show the 
Congress and the American public that these actions, such as the number 
of acres treated, occur within the highest-priority areas. Furthermore, 
over time, they should be able to show reductions in areas at high risk 
of long-term damage from wildfire.
    Finally, although we have not examined this issue as thoroughly at 
Interior, our work to date at the Forest Service has shown that, over 
time, the link between how the Congress appropriates funds and how the 
agency spends them has weakened as the Forest Service's field offices 
have been required to address issues and problems--such as hazardous 
fuels reduction--that are not aligned with its budget and 
organizational structures. Forest Service field offices must now 
combine projects and activities from multiple programs and funding from 
multiple sources to accomplish goals and objectives related to reducing 
hazardous fuels. We have observed that the agency could better ensure 
that the up to $325 million a year that may already be available from 
within its existing budget to fund hazardous fuels reduction activities 
and research will be used for these purposes by replacing its 
organizational and budget structures with ones that are better linked 
to the way that work is routinely accomplished on the national forests. 
We have also observed that the Forest Service's research division and 
state and private programs should be better linked to the national 
forests to more effectively address hazardous fuels reduction as well 
as other stewardship issues that do not recognize the forests' 
administrative boundaries.\7\ However, according to the Forest Service, 
it has no plan to replace its program structure with one that is better 
linked to the way that work is routinely accomplished on the national 
forests.
---------------------------------------------------------------------------
    \7\ Forest Service: Actions Needed for the Agency to Become More 
Accountable for Its Performance (GAO/T-RCED-00-236, June 29, 2000).
---------------------------------------------------------------------------
    In closing, we are faced with a pay-me-now or pay-me-later 
situation in which paying me now is likely the more cost-effective 
alternative. However, restoring fire-adapted ecosystems and protecting 
the communities that have developed alongside and in these ecosystems 
will require that the resources for reducing the threat of catastrophic 
wildfires be well spent. To do so will require that the Forest Service 
and Interior clearly identify not only how they spend funds 
appropriated to reduce hazardous fuels but also what they accomplish 
with these funds.
    Mr. Chairman, this concludes my formal statement. I will be pleased 
to respond to any questions that you or other Members of the Committee 
may have.

Appendix I.--Relevant GAO Reports and Testimonies on Reducing Hazardous 
                         Fuels on Federal Lands
Federal Fire Management: Limited Progress in Restarting the Prescribed 
            Fire Program (GAO/RCED-91-42, Dec. 5, 1990).
Western National Forests: Catastrophic Wildfires Threaten Resources and 
            Communities (GAO/T-RCED-98-273, Sept. 28, 1998).
Western National Forests: Nearby Communities Are Increasingly 
            Threatened by Catastrophic Wildfires (GAO/T-RCED-99-79, 
            Feb. 9, 1999).
Western National Forests: A Cohesive Strategy Is Needed to Address 
            Catastrophic Wildfire Threats (GAO/RCED-99-65, Apr. 2, 
            1999).
Western National Forests: Status of Forest Service's Efforts to Reduce 
            Catastrophic Wildfire Threats (GAO/T-RCED-99-241, June 29, 
            1999).
Fire Management: Lessons Learned From the Cerro Grande (Los Alamos) 
            Fire (GAO/T-RCED-00-257, July 27, 2000).
Fire Management: Lessons Learned From the Cerro Grande (Los Alamos) 
            Fire and Actions Needed to Reduce Fire Risks (GAO/T-RCED-
            00-273, Aug. 14, 2000).

    Chairman Radanovich. Before we begin our next presentation, 
you might note that we have two bells, that there is a vote 
call going on. We will go ahead and go to the next 
presentation. If it is a little bit long, Mr. Phillips, I may 
need to cut you off, if that is OK. Then we will recess 
quickly. We will run off and vote and be back here and start up 
shortly after.
    Chairman Radanovich. Our next speaker is Mr. Randle 
Phillips, who is the Deputy Chief for Programs and Legislation 
for the United States Forest Service. I believe we have met 
before under similar circumstances, Randle. Welcome to the 
hearing and please begin.

  STATEMENT OF RANDLE PHILLIPS, DEPUTY CHIEF FOR PROGRAMS AND 
           LEGISLATION, UNITED STATES FOREST SERVICE

    Mr. Phillips. Thank you, Mr. Chairman. I want to thank you 
for the opportunity to speak today concerning the wildland fire 
situation and the GAO report on the need to develop a strategy 
to address these catastrophic threats. I will briefly summarize 
my testimony and ask that my full text be submitted for the 
record.
    Mr. Chairman, this fire season is one of the worst in 
recent memory, and it is not over yet. Fire has burned, as 
previous people have said, more than 6 million acres not of 
just Federal land, but also State, tribal and private lands. 
The Forest Service to date has spent over 650 million in its 
attempt to contain these fires and prevent loss of life, 
property, and protect critical natural resources. Forest 
Service firefighters and their interagency partners, including 
volunteer fire departments, have done an outstanding job in 
very difficult situations. So far this year, they have put out 
76,000 fires.
    This year's fires also reflect a long-term disruption in 
the natural fire cycle that has increased the risk of 
catastrophic fires in our forests and grasslands. During the 
last century, the fires have been aggressively extinguished in 
the West. As a result, the annual acreage consumed by wildfires 
in the lower 48 States have dropped from 40 to 50 million acres 
a year in the early 1930's, to about 5 million acres in the 
1970's.
    Now, while the policy of aggressive fire suppression has 
successfully protected homes and forests for the most part 
during the last century, it has also inadvertently prevented 
fires from naturally clearing out brush, shrubs, and downed 
material that can fuel fires and make them hotter and more 
difficult to control. Invasive species such as cheatgrass, 
which is pervasive on today's western landscape, have also 
caused problems. It grows earlier, quicker, higher than native 
grasses; then dies, dries out, and becomes fuel for fires.
    Decades of aggressive fire suppression have drastically 
changed the look, fire behavior, and ecological condition of 
western forests and rangelands and, ironically, increased the 
costs and difficulty of suppressing those wildfires when they 
occur.
    In addition to the unnatural fuel buildup developing in our 
forest and rangelands, wildland firefighting has become more 
complex in the last 2 decades because of drastic increases in 
the West's population. Of the 10 fastest growing States in the 
United States, 8 are in the interior West. As a result, new 
development is occurring in fire-prone areas often adjacent to 
Federal land, creating a wildland/urban interface situation. 
Wildland firefighters today are often spending a great deal of 
more time in an effort to protect these structures than in 
earlier years.
    The Forest Service and its interagency partners have 
increased their efforts to reduce risk associated with the 
buildup of brush, shrubs, small trees, and other fuels in the 
forest with a variety of approaches including controlled burns, 
the physical removal of undergrowth, and the prevention and 
eradication of invasive plants.
    In 1994 the Forest Service was treating approximately 
385,000 acres across the United States. Today we have 
successfully increased that annual treatment almost fourfold. 
Last year we treated about 1.4 million acres of hazardous 
fuels.
    The GAO report of April 1999 indicated, as has been stated, 
the most extensive and serious problem related to the health of 
national forests in the interior West is overaccumulation of 
vegetation. Regional forester for the Rocky Mountain Region, 
Lyle Laverty, lead a team that developed a draft report known 
as the Cohesive Strategy to Respond to Concerns Raised by GAO. 
The report is a strategic blueprint that utilizes national data 
to assess the problem of fuel buildup across the West. But it 
will be up to regional and local Forest Service leadership to 
collaborate with the public and use the best science to decide 
the most effective strategies in the context of determining the 
right balance of management among all the resources.
    I think it is important to realize also the first round of 
forestland management plans that occurred in the early 1980's 
did not include fuel management strategies, with the exception 
of some of the southern forests, because the overall national 
policy at that time was still to extinguish all fires at all 
costs.
    Now, during his trip to visit fires in Idaho on August 9, 
the President requested reports from the Secretaries of 
Agriculture and Interior, outlining the agencies' plans for 
immediate and short-term activities that will help rehabilitate 
burned areas and assist the rural communities to recover from 
the impact of fire.
    The President's report covers five major areas: continuing 
to make the necessary firefighting resources available to 
protect communities and forests as the fire season continues; 
restoring landscapes and rebuilding communities impacted by the 
fires; investing in projects to reduce fire risk; working 
directly with communities to increase local firefighting 
capacity and reduce fire hazards; and being accountable through 
the creation of a Cabinet-level coordinating team.
    The President's report builds on many actions that we have 
already undertaken and that were outlined in the draft cohesive 
strategy. However, given the magnitude of the fire season and 
its effects, there is clearly a need for additional action and 
resources that would otherwise, then, be possible within our 
baseline programs. Burned area emergency teams are already 
mobilizing and conducting preliminary assessments and projects 
needed to present further loss of life, property, and 
resources.
    The recommendations in the President's report would also 
expand our efforts working with the National Association of 
State Foresters, National Fire Protection Association, and 
local firefighting organizations to help ensure that home 
protection capabilities are improved. Our FIREWISE program has 
been very successful in helping homeowners and communities 
reduce damage to their homes.
    The President's report recommends increased resources to 
continue making progress in reducing fuels, particularly in the 
wildland/urban interface areas. The recommendations are 
entirely consistent with our draft Cohesive Strategy for 
Hazardous Fuels Reduction.
    In the area of accountability, the President's report 
establishes a Cabinet-level coordinating team to ensure that 
actions recommended by the Department receive the highest 
priority.
    Chairman Radanovich. Mr. Phillips, I am sorry to interrupt 
you.
    Mr. Phillips. That's OK.
    Chairman Radanovich. I want to make sure we have the full 
benefit of your testimony. Let's recess briefly now and then we 
will vote and we will continue with the conclusion of your 
statement.
    Mr. Phillips. OK.
    Chairman Radanovich. Thank you very much. [Recess.]
    Thank you very much. We are back in session and if you will 
please continue, Mr. Phillips, we would appreciate it. Thank 
you for waiting.
    Mr. Phillips. My pleasure.
    I was going to wrap up by touching on the accountability 
aspect of the actions under the President's report in the draft 
cohesive strategy.
    The President has called for a Cabinet-level coordinating 
team so that the Departments would receive the highest 
priority. And the integrated management teams in the regions 
that are also called for should take primary responsibility for 
implementing the fuels treatment, restoration, and preparedness 
programs.
    The report to the President identifies a need for an 
additional $1.57 billion per year for the Departments of the 
Interior and Agriculture, starting in 2001, to implement the 
recommendations. Increasing funding for the work that needs to 
be accomplished will require new investments beyond our current 
program capabilities.
    In closing, I want to stress that it is important to 
recognize that as hazardous fuels in the West built up over 
many decades, restoring the health and resilience of these 
ecosystems while protecting nearby communities from the effects 
of catastrophic fire will take many years. Our strategic 
approach will be led by the Departments of Agriculture and 
Interior in concert with our partners and will treat areas that 
pose the highest risk to people, property, and natural 
resources. This will require working with a lot of people, will 
require resources and a commonsense approach to avoid needless 
controversy.
    This concludes my statement. I will be happy to answer any 
questions at the appropriate time.
    Chairman Radanovich. Thank you, Mr. Phillips.
    [The prepared statement of Mr. Phillips follows:]

 Prepared Statement of Randle Phillips, Deputy Chief, Forest Service, 
                     U.S. Department of Agriculture

    Mister Chairman and members of the Task Force, thank you for the 
opportunity to speak with you today concerning the wildland fire 
situation and the GAO report on the need to develop a strategy to 
address catastrophic wildfire threats in our western national forests. 
I am Randle Phillips, Deputy Chief for Programs and Legislation of the 
Forest Service.
    I appreciate your interest in what the agency is doing with respect 
to catastrophic wildfire. The 2000 fire season is one of the worst in 
recent memory, and it is not over yet. Fire has burned over 
approximately 6.6 million acres of federal, State, tribal, and private 
land so far this year. The Forest Service has spent over $650 million 
in its attempt to contain these fires and prevent loss of life and 
property, and protect critical natural resources. Six battalions of 
military have assisted our fire-fighting efforts, and specialists, 
equipment, and crews have been called in from several other countries 
to supplement our resources.
    I would like to cover two major topics today:
     The GAO Report and the Forest Service's response;
     The President's request for a report strategizing 
restoration efforts and actions to reduce wildfire effects on 
communities;
    Before I get into the details of these topics, I would first like 
to briefly discuss some of the reasons why we are in this dire 
situation today.
    This fire season is a result of extremely hot and dry weather 
conditions in the west. The weather phenomenon known as La Nina, 
characterized by unusually cold Pacific Ocean temperatures, changed 
normal weather patterns when it formed 2 years ago. It caused severe, 
long-lasting drought across much of the country, drying out our forests 
and rangelands. The situation was exacerbated by the fact that the 
drought followed several seasons of higher-than-normal rain, which 
fueled the growth of grasses and other plants that quickly dried when 
the rains stopped. This left millions of acres susceptible to fires. To 
make matters worse, this weather pattern also spawned a series of 
mostly dry thunderstorms with heavy lightning across the West. Because 
of the drought conditions, lightning strikes have ignited more new 
fires than would normally be associated with such storms.
    The current season corresponds to a historical pattern of extensive 
wildfires during similar unusual weather conditions. The result has 
been an extended, severe fire season with wildfires burning 
simultaneously across the western United States. Forest Service's fire 
fighters and their interagency partners have done an outstanding job in 
these difficult conditions. So far this year, they have put out a 
remarkable 76,000 fires.
    This year's fires also reflect a longer-term disruption in the 
natural fire cycle that has increased the risk of catastrophic fires in 
our forests and rangelands. During the last century, fires have been 
aggressively extinguished in the West. As a result, the annual acreage 
consumed by wildfires in the lower 48 states dropped from 40 to 50 
million acres a year in the early 1930's to about five million acres in 
the 1970's. During this time, firefighting budgets rose dramatically 
and firefighting budgets rose dramatically and firefighting tactics and 
equipment became increasingly more sophisticated and effective.
    While the policy of aggressive fire suppression has successfully 
protected homes and forests during the last century, it has also 
inadvertently prevented fire from naturally cleaning out brush, shrubs, 
downed material, and small trees that can fuel fires making them hotter 
and more difficult to control. In some cases, peat management practices 
including timber harvesting and grazing practices may also have been a 
contributing factor to the loss of large, fire resistant trees and the 
over accumulation of brush. Invasive species such as cheatgrass, which 
is pervasive on today's Western landscape, have also caused problems. 
Cheatgrass is one of the first plants to establish after a fire, and it 
grows earlier, quicker, and higher than native grasses. Then it dies, 
dries, and becomes fuel for fires.
    In short, decades of aggressive fire suppression have drastically 
changed the look, fire behavior, and ecological condition of western 
forest sand rangelands and ironically increased the cost and difficulty 
of suppressing fires. Forests a century ago were less dense and had 
larger, more fire-resistant trees. For example, in northern Arizona, 
some lower elevation stands of ponderosa pine that once held 50 larger 
trees per acre, now contain 200 or more smaller trees per acre. In 
addition, the composition of our forests have changed from more fire-
resistant tree species to nonfire resistant species such as grand fire, 
Douglas fire, and subalpine fir. As a result, studies show that today's 
wildfires, typically burn hotter, faster, and higher than those of the 
past.
    In addition to the unnatural fuel buildup developing in our forests 
and rangelands, wildland firefighting has become more complex in the 
last two decades due to dramatic increases in the West's population. Of 
the ten fastest growing states in the U.S., eight are in the interior 
West. While the national average annual population growth is about 1 
percent, the West has growth rates ranging from 2.5 to 13 percent. As a 
result, new development is occurring in fire-prone areas, often 
adjacent to Federal land, creating a ``wildland-urban interface''--an 
area where structures and other human development meet or intermingle 
with undeveloped wildland. This relatively new phenomenon means that 
more communities and structures are threatened wildland. This 
relatively new phenomenon means that more communities and structures 
are threatened by fire. Wildland firefighters today often spend a great 
deal more time and effort protecting structures than in earlier years. 
Consequently, firefighting has become more complicated, expensive, and 
dangerous.
    The Forest Service and its interagency partners have increased 
their efforts to reduce risks associated with the buildup of brush, 
shrubs, small trees and other fuels in forest and rangelands through a 
variety of approaches, including controlled burns, the physical removal 
of undergrowth, and the prevention and eradication of invasive plants. 
In 1994 the Forest Service was treating approximately 385,000 acres 
across the United States to reduce hazardous fuels. Today, we have 
successfully increased annual treatment almost four-fold. Last year we 
treated approximately 1.4 million acres. Reversing the effects of a 
century of aggressive fire suppression will take time and money 
targeted to high priority areas of protecting people, homes, critical 
watersheds, and wildlife habitat.
    Today, high-risk areas such as the wildland/urban interface have 
become our high priority for treatment. There are many opportunities to 
treat these high priority areas to reduce fuels. Our approach, with 
needed new investments, focuses on protecting communities at risk from 
unnaturally intense fires by removing small, generally noncommercial 
fuels through a combination of thinning, prescribed fire, and working 
with landowners to reduce fuel buildups and other hazardous conditions 
on their own property.
    The work anticipated to address fuels reduction and other needs 
associated with the President's Report would be done under all existing 
environmental laws. Full public involvement will be done, with 
collaboration between the agency, cooperators, and with the public.
    At the request of the New Mexico delegation, we recently outlined 
our approach for reducing fire risks by removing small-diameter trees 
and nonmerchantable material in the wildland/urban interface. I would 
like to submit for the record Chief Dombeck's May 23, 2000, letter to 
the New Mexico delegation.

            The GAO Report and the Forest Services Response
    The General Accounting Office (GAO) issued a report in April, 1999, 
titled: Western National Forests: a Cohesive Strategy is Needed to 
Address Catastrophic Wildfire Threats (GAO/RCED-99-65). The GAO 
asserted, ``The most extensive and serious problem related to the 
health of national forests in the interior west is the overaccumulation 
of vegetation.''
    Regional Forester Lyle Laverty led a team that has developed a 
draft report, known as the cohesive strategy, to respond to the 
concerns raised by GAO. The report is not operational in nature, but 
rather is a strategic blueprint that utilizes coarse-scale national 
data to assess the problem of fuel buildup across the west.
    In addition to this data, the draft report calls on the agency to 
consider fire management strategies that would be consistent with 
current forest plans or within the context of revising or amending 
forest management plans. The strategies mentioned in the report that 
may be useful for the agency to consider are those that remove brush, 
small trees, and other fuels through mechanical methods or controlled 
burning or a combination of both. It will be up to regional and local 
Forest Service leadership to collaborate with the public and use the 
best science to decide the most effective fire strategies in the 
context of determining the right balance of management among all of the 
resources within ecosystems. Two examples of this already happening are 
the planning efforts underway for the Sierra Nevada Mountains and the 
Interior Columbia River Basin.
    With regard to implementation, it is important to realize that the 
first round of forest management plans that were written in the 1980's 
did not include fire management strategies, with the exception of some 
of our southern forests, because the overall national policy was still 
``extinguish all fires at all costs.'' Therefore, many innovative 
approaches to reduce fuels in forests and near communities are stymied 
by these outdated forest plans. However, the opportunity to change 
these plans has never been better. As required by law, the agency is 
presently revising or has plans to revise most of its 150 or more 
forest plans, a process that will take most of the next 5 years or more 
to complete. As Congress discusses the amount of money to be made 
available for fuel treatment, it must also consider the money needed to 
revise and amend forest plans. Innovative projects to fire proof 
communities and forests must be supported and in compliance with 
innovative forest plans.
    In the past year, we have also issued reports addressing large fire 
costs and workforce capacity and configuration. Teams are in place to 
begin implementing the recommendations of these reports. As you can 
see, we have been working on many fronts to deal with fire management 
issues.

The President's Request for a Report Outlining Restoration Efforts and 
Actions the Agencies Can Take to Reduce Wildfire Effects on Communities
    During his trip to visit fires in Idaho on August 9, 2000, the 
President requested a report from the Secretaries of the Interior and 
Agriculture outlining the agencies' plans for immediate and short-term 
activities that will help rehabilitate burned areas and assist rural 
communities to recover from the impacts of fires. In addition, the 
President asked us to develop actions to help protect communities and 
natural resources from the risk of future unnaturally intense fires. 
The Secretaries have completed the report and the President has 
accepted the report (hereafter referred to as the President's Report) 
and its recommendations. I would like to share the major findings and 
points made in the President's Report with you today.

    The President's Report covers five major areas:
     Continuing to make all necessary firefighting resources 
available to protect communities and forests as the fire season 
continues;
     Restoring landscapes and rebuild communities and 
landscapes impacted by the fires;
     Investing in projects to reduce fire risk by removing 
brush, shrubs, and small trees;
     Working directly with communities to increase local 
firefighting capacity and reduce fire hazards, and;
     Being accountable through creation of a cabinet-level 
coordinating team.
    The President's Report builds on many of the actions that we are 
already taking. However, given the magnitude of the fire season and its 
effects, there is clearly a need for additional action and resources 
than would otherwise be possible within our baseline programs.

   Continuing to Make All Necessary Firefighting Resources Available
    The President's Report's recommendations reinforce the need to have 
additional initial attack and extended attack resources. It also 
reinforces the need to address firefighter pay equity issues. As a 
first priority, the Departments will continue to provide all necessary 
resources to ensure that firefighting efforts protect life and 
property.

            Restoring Landscapes and Rebuilding Communities
    Burned area emergency rehabilitation teams are already mobilized 
and conducting preliminary assessments and rehabilitation projects 
needed to help prevent further loss of life, property, and resources 
from the first damage-producing storms that may cause excessive 
erosion, water quality degradation, and other damage from burned areas. 
In addition to this work, we will invest in landscape restoration 
efforts such as tree planting, watershed restoration, and soil 
stabilization and revegetation.
    The recommendations in the President's report would also expand our 
efforts working with the National Association of State Foresters, the 
National Fire Protection Association, and local firefighting 
organizations to help ensure that home protection capabilities are 
improved and to educate homeowners in fire-sensitive ecosystems about 
the consequences of wildfires and techniques in community planning, 
homebuilding, and landscaping to protect themselves and their property. 
Our FIREWISE program has been very successful in helping homeowners and 
communities reduce damage to their houses.

 Investing in Projects to Reduce Fire Risk by Removing Brush, Shrubs, 
                            and Small Trees
    As stated earlier, we are steadily increasing our capacity to 
reduce hazardous fuels and are focusing these efforts on the wildland/
urban interface, but the scale of the problem is beyond our current 
means. The President's Report recommends increased resources to 
continue making progress in reducing fuels, particularly in the 
wildland/urban interface areas. The recommendations are entirely 
consistent with our draft cohesive strategy for hazardous fuels 
reduction.

   Working Directly with Communities to Increase Local Firefighting 
                    Capacity and Reduce Fire Hazards
    Working with local communities is a critical element in restoring 
damaged landscapes and reducing fire hazards near homes and 
communities. This will be pursued through expanding community 
participation, increasing local capacity, and learning from the public.
being accountable through creation of a cabinet-level coordinating team
    The President's Report establishes a Cabinet-level coordinating 
team to ensure that the actions recommended by the Departments receive 
the highest priority. The Secretaries of Agriculture and the Interior 
will cochair this team, and integrated management teams in the regions 
should take primary responsibility for implementing the fuels 
treatment, restoration, and preparedness programs.

                       Funding and Budget Issues
    The report to the President identifies a need for an additional 
$1.57 billion per year for the Departments of Interior and Agriculture 
starting in FY 2001 to implement the recommendations. This funding will 
be used for fire preparedness, fire operations, State and volunteer 
fire assistance, forest health management, and economic action programs 
related to accomplishment of the report's recommendations.
    Increasing funding for the work that needs to be accomplished will 
require new investments. Congress and the Administration must work 
together to address this issue in order to help the agencies achieve 
this important goal of reducing the threat of catastrophic wildfire 
across the landscape and implement an effective recovery and 
rehabilitation program.

                                Summary
    The Forest Service and other Federal agencies with firefighting 
responsibilities are committed to minimizing the losses from future 
unnaturally intense fires such as those in New Mexico, Idaho, Montana, 
and across the interior West. The Forest Service is committed to 
working with communities to implement a strategy to restore and 
maintain healthy ecosystems on National Forest System lands. That means 
reducing hazardous fuels, while ensuring cautious and consistent 
protocols in any use of prescribed fire.
    We will continue to provide the national leadership and to work 
with our federal, State, and local firefighting cooperators, and 
Congress to ensure that the Federal firefighting agencies and their 
cooperators have the resources needed to assist in educating home and 
land owners about fire risks, fire risk reduction strategies, and to 
protect the public, property, and resources when fires occur.
    As I have stated before, it is also essential to recognize that 
hazardous fuels buildups in the West occurred over many decades. 
Restoring the health and resilience of these ecosystems while 
protecting nearby communities from the effects of catastrophic fire 
will take many years. That reality, however, is no excuse for inaction. 
Our strategic approach, which will be led by the Departments of 
Agriculture and the Interior, will treat areas that pose the highest 
risk to people, property, and natural resources, and to do so in the 
most expeditious manner possible. This will require partnerships, 
resources, and common sense approaches that avoid needless controversy.
    This concludes my statement. I would be happy to answer any 
questions you or the members of your Task Force might have.

    Chairman Radanovich. Next up is Robert H. Nelson, who is 
the Senior Fellow in Environmental Studies with the Competitive 
Enterprise Institute and a professor of environmental policy at 
the School of Public Affairs at the University of Maryland.
    Mr. Nelson, welcome and we look forward to your testimony. 
Please begin.

 STATEMENT OF ROBERT H. NELSON, SENIOR FELLOW IN ENVIRONMENTAL 
  STUDIES, THE COMPETITIVE ENTERPRISE INSTITUTE, PROFESSOR OF 
 ENVIRONMENTAL POLICY, SCHOOL OF PUBLIC AFFAIRS, UNIVERSITY OF 
                            MARYLAND

    Mr. Nelson. I am pleased to be here. I might also add that 
I worked from 1975 to 1993 in the Office of Policy Analysis, 
Office of Secretary of the Interior, so that is part of my 
background on this subject.
    The principle conclusions are summarized in seven points 
which I will go over quickly. The first is that the forest 
fires of 2000 have shown the need to rethink some of the basic 
assumptions of Federal land management. Forest fire is partly 
an accident of the weather and other circumstances. It is also 
subject to extensive human influence. A forest can be managed 
to be much more or less susceptible to catastrophic fire. The 
management decisions made over many decades left the national 
forest in a tinderbox condition. So there were many 
administrations that were responsible. This included many 
decades of suppression of fire. And then in the decade of the 
1990's, far too little was done to redress the dangers created 
in the previous decades. All this failure calls for a broad 
review of the Federal forest management regime which created 
such unacceptable results over such a sustained period.
    The problems of wildfires in the West this year to some 
extent are illustrative of broader problems of the Forest 
Service. Its land use planning system, by wide agreement, does 
not work well. The General Accounting Office has studied the 
decision-making process of the Forest Service on a general 
basis and described it as ``broken.'' A state of gridlock is 
the normal characterization of the current Forest Service 
situation.
    I think Congress itself can share in some of the blame for 
these broader problems, because it itself has been gridlocked 
in attempts to resolve some of the land use planning problems 
and to change some of the basic statutory framework for the 
Forest Service, despite abundant evidence that these problems 
exist.
    Point number two is that actions are urgently needed to 
reduce excess fuel loads in order to restore the national 
forests and other western Federal forests to a healthier and 
less fire-prone condition. Since at least the early 1990's, 
various expert groups have been warning that excess fuel levels 
were building up on western forests, posing the risk of 
widespread catastrophic fire. Such warnings have been issued by 
the National Commission on Wildfire Disasters, the Forest 
Service, the Secretaries of Agriculture and Interior in a 1995 
report, and the General Accounting Office in 1998 and 1999.
    There was some, but nowhere near enough, response of the 
Federal forest agencies in comparison with the magnitude of the 
problem. They in effect gambled with the lives and property of 
the West. You might say they were hoping for good weather and 
low winds and lost the gamble in the summer of 2000.
    We now at this point need a large-scale program of fuels 
reduction. Not all the acreage is going to require action, but 
the upper limit of activity involves 50 million acres in the 
worst condition, and another 50 million or so forest acres 
which are in deteriorating condition and which face abnormal 
fire-prone conditions.
    Point three: States and local communities should take the 
lead in developing plans for reducing fire hazards in their 
vicinity, including Federal forests. Basic social values will 
be involved in resolving the best management strategy. 
Prescribed burning will require that nearby residents and 
property owners put up with smoke and possible health hazards 
and take the risk that the fire might get out of control, 
potentially even threatening their lives. Mechanical thinning 
will require a willingness to cut large numbers of trees on 
national forestlands, a position that has been anathema to many 
vocal environmental groups in recent years. Doing nothing may 
involve the fewest immediate costs but will pose the risk that 
the whole forest might burn up in a catastrophic fire.
    We also have the problem that various studies and 
experiments have been conducted, but there are many large 
technical and ecological uncertainties that remain with respect 
to fuels reduction. The same treatment methods that work in one 
place may yield much different results in another place.
    For many years the track record of the Forest Service has 
been to overstate the degree of scientific knowledge and then 
to seek to impose common answers from a national level in the 
service of a fictitious scientific consensus; the most recent 
example has been the emphasis on prescribed burning and 
resistance to mechanic thinning which dominated the response of 
the 1990's.
    It is a time for a new approach and a new era. This will 
mean much more real decentralization of authority and much less 
unilateral assertion of Federal authority. It will be a 
continuation of existing trends already seen in the 1990's.
    The watershed movement represents an important effort to 
decentralize. A 1996 report by the Colorado Law School 
documented and studied closely the role of 76 watershed groups 
that had formed to seek solutions to common problems at the 
local level. More of that will be needed.
    Point four: The Forest Service should be directed to 
publish full forest fire risk assessments for each community in 
close proximity to a Federal forest, giving estimates of the 
likelihood of various fire outcomes within specified time 
frames. If communities are going to take the lead in developing 
fire and fuels management plans, they need to have better 
information. That is a role that the Forest Service can very 
effectively play, to provide that kind of information.
    Point five: The cost of the fuels reduction program can be 
substantially held down by selling commercially marketable wood 
and other products resulting from fuels reduction efforts. A 
program of government-subsidized thinning, costing hundred of 
millions of dollars and at Federal taxpayer expense, is not 
needed. Contrary to a wide impression, the total volumes of 
wood on the national forest have been increasing steadily for 
many years. The composition of the national forests, however, 
has shifted radically to small-diameter and, thus, lower-
quality trees. At present, these small-diameter trees have a 
limited commercial market. This can be a short-term situation, 
however. The demand for wood and paper in the United States 
continues to grow unabated. There has been a steadily growing 
use by the timber industry of low-quality trees across the 
United States.
    The national forests now contain large supplies of this 
kind of lower-quality wood that can be used to meet the needs 
of the timber industry and can be sold even for positive 
revenue at a gain to the Federal treasury.
    A large new program of selling small-diameter trees on a 
much larger scale can be a win-win situation, economically it 
saves the government money, helps the economy of small 
communities in the West, and environmentally reduces fuel 
loads, cuts the risk of fire, and saves the ecological harms 
that often result from current fires.
    It will be necessary, however, to provide some certainty of 
future supply for mill operators and others involved in the 
utilization of low-diameter trees that does not exist at 
present. No one can be expected to invest money in a new small-
diameter mill in the West that may take 10 years to earn a fair 
return when the supply of small-diameter trees from the 
national forests, where the largest concentrations exist, could 
dry up at any time under current confrontational land use 
planning and other working arrangements on the national 
forests.
    Congress needs to act in this area, because existing law 
will not allow the existing security of supply to provide the 
right incentives to get private sector behavior.
    Point number six: I believe a cost-sharing formula should 
be implemented in conjunction with the much larger role of 
State and local governments, wherein the Federal Government 
shares the burdens of fuel reduction programs with 
participating State and local governments. Cost-sharing has 
many benefits and it is used in many Federal programs. It 
provides an incentive for States and local governments to seek 
cost solutions, and in many cases they are the ones who have 
the real authorities, such as zoning and so forth, that are 
necessary to managing these fire dangers.
    And point number seven and the final point: Prompt action 
to reduce excess fuels on national forests will require limits 
on the existing ability of many parties to national forest 
decision-making to exercise in effect a unilateral veto power 
over future management actions. Because of all the appeals 
processes and procedural hurdles that now exist, the current 
system is in effect strongly biased in favor of those who favor 
a no-action alternative. It is possible for a group of 
concerned parties to discuss forest management options, develop 
a fuels reduction plan that has wide community support, and yet 
any one of those parties at the end of process can have the 
ability to prevent its implementation. It is an impossible 
situation for workable achievement of rapid response to a 
problem such as we are seeing now with western fires.
    I believe that if Congress wants to see any action soon to 
address the problems of western national forests, it will have 
to confront this problem as well. And so, as I said at another 
point in my testimony, I think that Congress in various policy 
areas has to resolve certain disagreements within its own body, 
as well as the Forest Service taking much more effective action 
than they have in the past. But their problems are partly 
problems that have been forced on them by congressional 
inaction.
    That concludes my testimony.
    Chairman Radanovich. Thank you, Mr. Nelson.
    [The prepared statement of Mr. Nelson follows:]

Prepared Statement of Robert H. Nelson, Senior Fellow in Environmental 
      Studies, the Competitive Enterprise Institute, Professor of 
 Environmental Policy, School of Public Affairs, University of Maryland

    My name is Robert H. Nelson. I am a Professor of Environmental 
Policy at the School of Public Affairs of the University of Maryland 
and a Senior Fellow of the Competitive Enterprise Institute. From 1975 
to 1993, I worked in the Office of Policy Analysis in the Department of 
the Interior. This office is the principal policy office serving the 
Secretary of the Interior. I served on assignment as the senior 
economist of the Commission on Fair Market Value Policy for Federal 
Coal Leasing (1983-1984), as research manager for the President's 
Commission on Privatization (1988), and as economist of the Senate 
Select Committee on Indian Affairs (1991). I am the author of three 
books on public land management, The Making of Federal Coal Policy 
(Duke University Press, 1983), Public Lands and Private Rights: The 
Failure of Scientific Management (Rowman & Littlefield, 1995) and A 
Burning Issue: A Case for Abolishing the U.S. Forest Service (Rowman & 
Littlefield, 2000). I received a Ph.D. in economics from Princeton 
University in 1971.
    The principal conclusions of my testimony can be summarized as 
follows.
    1. The forest fires of 2000 have shown the need to rethink basic 
assumptions of Federal land management.
    2. Actions are urgently needed to reduce excess fuel loads in order 
to restore the national forests and other western Federal forests to a 
healthier and less fire-prone condition.
    3. States and local communities should take the lead in developing 
plans for reducing fire hazards in their vicinity, including Federal 
forests. They should work in conjunction with the Federal land 
agencies, environmental groups, the timber industry and other elements 
of ``civil society.''
    4. The Forest Service, Bureau of Land Management and other parts of 
the Federal Government should serve primarily to facilitate discussion, 
to provide information and other technical assistance, and to handle 
administrative implementation of resulting fuels reduction plans on 
their own lands.
    5. The Forest Service should be directed to publish full forest 
fire risk assessments for each community in close proximity to a 
Federal forest, giving estimates of the likelihood of various forest 
fire outcomes within certain specified timeframes.
    6. The costs of the fuels reduction program can be limited by 
taking steps to facilitate the sale of commercially marketable wood and 
other products resulting from fuels reduction efforts. A program of 
thinning costing hundreds of millions of dollars at Federal taxpayer 
expense is not needed.
    7. A cost-sharing formula should be implemented whereby the Federal 
Government does share any public burdens of excess fuels reduction with 
participating state and local governments.
    8. Prompt action to reduce excess fuels on Federal forests will 
require limits on the existing ability of many parties to national 
forest decision making to exercise a unilateral veto power over future 
management actions.
    I will address each of these six points in turn.

                   Rethinking Federal Land Management
    Almost a century of fire suppression on the national forests and 
other western forests has led to a build-up of large loads of trees and 
wood. Suppressing fire paradoxically results in an increase in fuel 
loads in the future and increasing fire hazards. Since the 1970's, the 
extent of wildland fires in the West has been growing and these fires 
have been less controllable; have burned at higher temperatures; have 
been more likely to be crown fires; and have often occurred outside the 
range of previous wildland fire experience. The economic losses have 
included destruction of homes and other structures, soaring Federal 
expenditures for fire fighting, loss of tourism, loss of potentially 
harvestable wood, and other costs. Catastrophic wildfires have also 
caused sterilization of the soil, excess siltation and runoff into 
streams, destruction of remaining large trees, loss of biodiversity and 
other environmental damages.
    These trends culminated in the fire season of 2000. Thus far, more 
than 6.5 million acres (about equal to the land area of the State of 
Maryland) have burned, more than twice the normal amount for this time 
of year. At least 1,000 homes have been destroyed. Fire fighting costs 
to the Federal Government will very likely exceed $1 billion in 2000. 
The State government of Montana was forced to limit recreational access 
to forests covering one quarter of the area of Montana. The 
environmental costs are more difficult to quantify but they are large 
and will be visible in the years to come.
    Forest fire is partly an accident of the weather and other 
circumstances; it is also subject to human influence. A forest can be 
managed to be more or less susceptible to catastrophic fire. The 
management decisions made over many decades of the 20th century left 
the national forests in a tinderbox condition. Such a management 
failure--sustained over many decades, and including the 1990's when 
much too little was done to redress the dangers created by suppression 
in previous decades--call for a broad review of the Federal forest 
management regime which created such unacceptable results over such a 
sustained period.
    Early on, the general policy of fire suppression was initially 
resisted by many local communities but was forced on them by a Forest 
Service determined to implement a single vision of ``correct'' forest 
management. This reflected the ethos of ``scientific management'' in 
which the Forest Service was conceived in 1905 and the normal 
expectation in science that there is a one ``right answer.'' In the 
1990's, following the more recent recognition that fuel loads had built 
up to very dangerous levels on the forests, there was again an attempt 
to formulate a single correct policy extending over the national forest 
system. The Forest Service determined that prescribed burning was the 
superior method--more ``natural''--of reducing fuel loads on the 
national forests. The level of prescribed burns on the national forests 
rose by a factor of three or four from 1994 to 1999 (although still 
small relative to the overall acreage of fire prone forest). Although 
many communities and expert groups outside the Forest Service strongly 
advocated the use of mechanical thinning of the national forests as 
well to reduce fuel loads, very little thinning took place.
    The track record of the Forest Service shows that its 
``scientific'' determinations are often influenced by intellectual 
fads, political pressures and other nonscientific elements. Where the 
science is incomplete and the knowledge base weak, the agency has often 
sought to make stronger claims for scientific knowledge than were 
justifiable. The experience and record of forest fire management 
illustrate that an approach of trial and error will have to play a 
larger role in the future than has been the traditional Forest Service 
understanding of ``scientific management.''
    Recent theorists of ``adaptive management'' have called for much 
greater flexibility in natural resource management. It will be 
difficult or impossible to apply forms of adaptive management to 
address forest fire concerns without significant decentralization of 
authority and other basic changes in the institutional arrangements for 
Forest Service management of the national forests.

                   Excess Fuel Loads Must Be Reduced
    Since at least the early 1990's, as shown in Figure 1, various 
expert groups have been warning that excess fuel levels were building 
up on western forests, posing the risk of widespread catastrophic fire. 
Such warnings have been issued by the National Commission on Wildfire 
Disasters (1994); the Forest Service itself (1995); the Secretaries of 
Agriculture and Interior (in a joint 1995 report); and the General 
Accounting Office (1998 and 1999). There was little response of the 
Federal forest agencies in comparison with the magnitude of the 
problem. The predictions of impending catastrophic fire have been 
realized in the 2000 fire season--and in 1994 and 1996 devastating 
fires had already raged across large areas of the West.
    In February 2000 the Forest Service published the first reliable 
data on the extent of the forest health problems and the excess fuels 
buildup on the national forests. As shown below, 28 percent of the 
forested lands in the national forest system are rated as very 
unhealthy and fire prone--characterized by large numbers of smaller 
trees outside the historic range of variability, and representing a 
large fuel load buildup. In total the national forests include 169 
million acres of forested land. The total area of national forest land 
posing the largest fire risk thus equals 47 million acres. Lands in 
deteriorating condition where excess fuel loads and fire risks are 
currently building up and pose an abnormal fire hazard cover another 60 
million acres.
    Not all of these fire prone lands will require fuels reduction 
treatment. Some are in remote areas where fire poses little danger to 
human habitation, the costs of forest treatments would be large and the 
environmental damages from forest fire would not be too great (or fire 
might be beneficial). Mechanical thinning to reduce fire risks would be 
illegal in formally designated wilderness areas. It would be difficult 
to undertake thinning in roadless areas (according to Forest Service 
figures, more than half of the 43 million acres recently placed under a 
road building moratorium are unhealthy and fire prone). Prescribed 
burning is limited in its applicability because of the many hurdles it 
faces, including the risk the fire will get out of control; air 
pollution concerns; administrative costs; and the necessity for the 
right weather conditions. Prescribed burning is not feasible at all in 
many national forest areas because the fuel loads are already so great 
that any fire would soon become a large conflagration that might well 
spread rapidly to other forests.

    TABLE 1.--STATE OF FOREST HEALTH, FORESTED LANDS IN NATIONAL FOREST SYSTEM, BY U.S. FOREST SERVICE REGION
----------------------------------------------------------------------------------------------------------------
                                                                                   Deteriorating
                            FS Region                                 Healthy         health      Very unhealthy
----------------------------------------------------------------------------------------------------------------
Region 1........................................................             20%             41%             39%
Region 2........................................................             41%             43%             15%
Region 3........................................................             15%             42%             43%
Region 4........................................................             59%             34%              7%
Region 5........................................................             24%             28%             48%
Region 6........................................................             14%             47%             39%
Region 8........................................................             70%             22%              8%
Region 9........................................................             43%             26%             31%
All FS Lands....................................................             37%             35%             28%
----------------------------------------------------------------------------------------------------------------
Source: USDA Forest Service, Rocky Mountain Research Station, Fire Sciences Laboratory, Historical Fire Regimes
  by Current Condition Classes (Missoula, Montana: February 15, 2000).

Note: ``Healthy,'' ``Deteriorating Health,'' and ``Very Unhealthy'' correspond to the Forest Service categories
  of ``Class 1,'' ``Class 2,'' and ``Class 3'' lands, respectively.

    There are three options for national forest lands where excessive 
fuel loads pose a large forest fire risk: prescribed burning, 
mechanical thinning, or do nothing (and simply take the chance that no 
fire will break out). There is not likely to be any one answer that is 
universally applicable across the national forest system.

                      Decentralize Decision Making
    Basic social value choices will be involved in resolving the best 
management strategy to deal with existing unhealthy forests and excess 
fuels loads. Prescribed burning will require that nearby residents and 
property owners put up with smoke (and possibly attendant health 
hazards) and take the risk that the fire might get out of control and 
damage their properties or even threaten their lives. Mechanical 
thinning will require a willingness to cut trees on national forest 
lands--contrary to the positions of many vocal environmental groups in 
recent years. Doing nothing may involve the fewest immediate costs but 
will pose the risk that the whole forest might burn in a catastrophic 
fire.
    The science of forest treatments to reduce fuel loads and fire 
risks is still on an early part of the learning curve. Various studies 
and experiments have been conducted but there are many large technical 
and ecological uncertainties that remain. The scientific difficulties 
are compounded by the site-specific character of the problem. The same 
forest treatment methods in one place may yield a much different forest 
outcome at another location. The science of ecology at present lacks 
the ability to make precise predictions.
    For many years the track record of the Forest Service has been to 
overstate the degree of scientific knowledge and then to seek to impose 
common answers from the national level in the service of a fictitious 
scientific consensus. It is time for a new approach and a new era. This 
will mean more decentralization of authority and less unilateral 
assertion of Federal authority.
    It will be a continuation of existing trends already seen in the 
1990's. The ``watershed movement'' already represents an important 
existing effort to decentralize management in the West. In some cases 
it has been driven by the intermingling of state and private lands with 
lands of the Forest Service and other Federal agencies. No one land 
owner is in a position to plan and manage for the interconnections 
among such diverse properties, requiring the development of new 
collaborative mechanisms. A 1996 report by the University of Colorado 
Law School documented the existence of 76 watershed groups that had 
formed to seek solutions to common problems at the local level. The 
Western Water Policy Review Commission in 1998 recommended the 
development of new governance ``mechanisms that help integrate the 
management of river basins and watersheds across agencies, political 
jurisdictions, functional programs and time.''
    In Southwest Colorado, the Ponderosa Pine Forest Partnership was 
formed in the mid 1990's to plan actions to restore forests in the area 
to a healthier condition and to reduce fire hazards on the national 
forests and adjacent state and private lands. The predominant method 
selected was mechanical thinning of the forests, to be followed by 
prescribed burning. The participants in the effort included local 
government, the San Juan National Forest, Fort Lewis College, the 
Colorado timber industry and the Colorado State Forest Service. Because 
of the broad participation and range of local support achieved, a 
mechanical thinning program was carried out on a test basis, an outcome 
that would probably have been impossible at the initiative of the U.S. 
Forest Service alone.
    The effort was initiated and much of the leadership came from the 
Montezuma County Commission and its Federal Lands Program. Commission 
leaders were confronted with finding new management approaches over 
250,000 acres in mixed Federal and nonfederal ownership that had been 
harvested for timber early in the 20th century. In the absence of fire 
over the course of the 20th century, these lands had now evolved into 
fire prone forests of small diameter, stagnated, second growth 
ponderosa pine. The county government decided it would be necessary to 
involve various other groups as well in fact finding, technical 
education, and discussions of fuel reduction options and the 
formulation of plans.

     A New Federal Role: Facilitation and Administrative Assistance
    The many mistakes of past Federal forest management require a new 
Federal modesty of aims and prescriptions. Instead of the controlling 
force (who may listen to others but in the end acts alone), a new 
Federal role is required in which the Federal Government becomes merely 
one participant in a larger group process of decision making. Federal 
officials may bring certain special capacities to the table. These may 
include the money to fund research and other studies, knowledge of 
various technical forestry subjects, and the administrative instruments 
and capabilities to implement elements of group decisions and plans on 
their own lands.
    Traditionally, the Federal Government also held the final decision 
making authority for national forests and other Federal lands. However, 
in a new role the Federal Government will be constrained from acting in 
the absence of wider agreement. When many individual lives and property 
are at stake, and the economic and environmental future of the 
surrounding area depend so much on land management decisions, Federal 
land managers should not presume to possess unique decision making 
capabilities. This is especially the case when the existing state of 
forestry and ecological science at any given time may be capable of 
justifying a wide range of possible options.
    New instruments of cooperation and governance will be necessary for 
the management of Federal forests. Here as well, there is no single 
answer. The Second Century report, the result of a collaborative study 
effort involving the timber industry, environmentalists and other 
parties, recommended in 1999 that five models be considered in 
reorganizing the basic framework for national forest management and 
decision making. All involved significant decentralization. One model 
involved the creation of what would amount to a public board of 
directors to oversee the management of individual national forests. 
Another model would put less emphasis on participative decision making 
and achieve local accountability by requiring individual national 
forests to charge fees and otherwise raise revenues to cover their 
costs. The discipline of the market would act to insure that national 
forest managers do in fact serve public demands. Excess fuel loads 
would be reduced, for example, because this action would increase long 
run revenues--in terms of future timber sales, recreational fee 
collections, hunting and fishing access charges, etc.

                       Community Risk Assessments
    In the role of facilitator, a first key step will be for the Forest 
Service to provide communities throughout the West with more complete 
information on forest conditions and fire risks in their vicinity. A 
full ``risk assessment'' should be prepared and widely distributed for 
each community, giving the probability of different types of fires and 
damages over different time frames. This risk assessment should also 
relate risk projections to possible future changes in forest conditions 
that might result from management actions.
    At Los Alamos, New Mexico, the Los Alamos National Laboratory in 
December 1999 identified ``wildfire as the greatest threat to Los 
Alamos operations.'' In mid April 2000, Diana Webb, the chair of the 
Los Alamos Ecology Group, told a small meeting of concerned citizens 
that ``It's not a matter of if but when wildfire will again threaten 
the Lab, Los Alamos and surrounding areas. We can't stress this 
enough.'' Yet, this risk information was not available in a 
quantitative form and not widely enough disseminated to the Los Alamos 
community. If more citizens had known more precisely and earlier of the 
real large risks to their community, they might have demanded earlier 
and more effective action to reduce fire risks in nearby forests. The 
Los Alamos fire broke out on May 4, 2000, destroying 400 homes and 
doing other large damage.
    The Congress would need to establish a schedule with tight 
deadlines--perhaps first drafts by next summer, final documents by the 
summer of 2002--for the publication of full risk assessments for forest 
fire for each western community in close proximity to a Federal forest. 
Legally fixed deadlines are desirable because the publication of such 
risk assessments is bound to be a sensitive and controversial matter. 
Without an outside forcing action, the Forest Service or other Federal 
agency is likely to be taken up in a long internal discussion and 
debate, possibly delaying for many years any publication of results.

                Commercial Sales of Small-diameter Trees
    Contrary to a widespread impression, the total volumes of wood on 
the national forests have been increasing steadily for many years--the 
result of fire suppression acting to build up wood loads, at the same 
time that levels of timber harvests have been below net growth of wood 
each year. The composition of the national forests, however, has 
shifted radically. As many larger and older trees were harvested as 
part of the traditional timber program, and with fire suppression, 
western forests have increasingly been stocked by stands of small-
diameter trees. In ponderosa pine forests 100 years ago, for example, 
there might have been 30 to 50 large old trees each three to four feet 
in diameter. Today, the same forest might have 300 to 500 trees--
including ponderosa pine, white fir, grand fir, and lodgepole pine, 
among other possibilities--packed together in dense stands, most of the 
trees in the range of 4 to 12 inches in diameter. It is these new 
conditions of densely packed stands of small-diameter trees--virtual 
kindling wood for fires--that create the much greater fire hazard 
currently being faced.
    At present, the small-diameter trees have a limited commercial 
market. This can be a short term situation, however. The demand for 
wood and paper in the United States continues to grow unabated. The 
national forests now contain large supplies of wood fibres that can be 
used to meet these needs. At the same time, large reductions in the 
excess fuel loads of small-diameter trees in the national forests are 
needed to reduce fire risks and improve forest health. It can be a win-
win situation economically and environmentally. With appropriate 
government policies, forest health can be improved, fire risks reduced, 
and large supplies of wood provided for home building and other 
purposes. Rural communities in the West--some depressed economically--
can also receive a significant income and employment boost.
    Much increased utilization of small-diameter trees can also bring 
in substantial revenue to the Federal Government. There are various 
suggestions being made at present for large new commitments of Federal 
funds for a program of thinning of overstocked western forests. This 
large expenditure of public money is unnecessary and undesirable. There 
is no need to create a new large drain on Federal revenue sources and 
national taxpayers--and a large accompanying bureaucratic apparatus--
when small diameter trees themselves have a large commercial potential. 
A recent study published in August 2000 in the Journal of Forestry 
found that in southwest Colorado, for example, ``forest restoration 
projects can achieve ecological objectives and pay for themselves.''
    The potential uses of small diameter trees are numerous. Various 
wood products--including oriented strand board, house logs, laminated 
lumber, studs, excelsior products, waferboard, posts and poles, and 
firewood--are possible. Oriented strand board was minimally produced 
until the early 1980's but now supplies 11.2 billion board feet of 
sheet and other wood products per year, equal to 63 percent of the 
volume of total U.S. plywood production. The timber industry in the 
United States has generally been shifting in many areas toward the use 
of chips and particles from lower quality trees and wood--for example, 
making increasing use of hardwoods as a wood fibre source. Better glues 
and other technology make it possible to create newly strong and 
attractive wood products from such lower quality sources. In 1950, the 
total wood outputs represented 70 percent by weight of the wood inputs 
going into the production process. Today, because of increased 
utilization of all parts of trees, this figure has increased to 95 
percent.
    Small trees can also supply pulp for paper production. Still 
another important and potentially profitable use of small-diameter 
trees is as a source of biomass to generate electricity.
    As with any new product area, it will take time to develop the 
technology of utilization of small-diameter trees and to find the most 
suitable and profitable uses. The development of new wood processing 
technology has been most rapid in areas such as hardwoods where much of 
the wood supply is on private land. In the case of the western United 
States the supply uncertainties and other problems of doing business 
with the Federal Government on Federal forests have inhibited a similar 
pace of technological and industrial infrastructure development. If 
every computer manufacturer had had to depend on a Federal ``chip'' 
supplier with the same bureaucracy and reliability as the U.S. Forest 
Service supplies wood ``chips,'' the U.S. personal computer industry 
would likely still be back somewhere in its infancy.
    Small-diameter trees also are limited in their marketability in the 
West at present because there are few contractors with the best 
harvesting equipment for these trees and few local mills with the 
capacity to handle them. The small-diameter trees thus are often 
harvested inefficiently and then sent to distant markets where the 
transportation costs can be half or more of the total costs.
    The best future role of the Federal Government--focused on 
technical assistance and other facilitation efforts--in forest 
management is illustrated by the work of the Forest Products Laboratory 
in Madison, Wisconsin, a joint effort of the University of Wisconsin 
and the Forest Service. In recent years it has conducted various 
studies of the economic potential of small-diameter trees and 
explorations of potential markets. For example, the Forest Productions 
Laboratory is working with the Watershed Research and Training Center 
in Hayfork, California. Experience to date has shown that removal of 
small-diameter trees costs $208 per thousand board feet for sale as 
green raw logs and that these logs can earn $200 in revenue per 
thousand board feet--thus involving a small loss but much lower net 
costs than simply paying for removal of the logs with no subsequent 
commercial sale. Use of the trees for processing and sale as flooring 
increases the costs to $800 per thousand board feet; the revenues, 
however, rise to $1,200 per thousand board feet, yielding a substantial 
profit surplus in this form of utilization of small-diameter trees.
    The Los Alamos fire this year focused new attention on similar fire 
prone forests in the watershed area for the nearby city of Santa Fe, 
New Mexico (the Los Alamos fire started as a prescribed burn on 
Bandelier National Monument but then escaped and soon spread to the 
Santa Fe National Forest where it erupted in the tinderbox conditions 
of this forest and where most of the actual burning occurred). If a 
similar fire were to burn in the Santa Fe watershed, massive siltation 
and runoff might threaten the city water supply. Seeking protection 
against this outcome, the city and its water board are working with 
various groups to plan a thinning program. Given the large procedural 
hurdles and delays facing actions on Federal lands, the first thinning 
efforts planned in the watershed will take place on private lands. It 
is expected that some of the thinned trees will be sold commercially, 
thereby reducing the expected bids from contractors to complete the 
job.
    It will require new legislation to achieve the full large potential 
for utilization of small-diameter trees. The legislation will need to 
authorize planning for forest thinning over a longer time frame and 
government commitments to make sufficient wood volumes available to 
justify new local mills designed for processing of small-diameter 
trees. The supply commitment might have to cover a five to 10 year 
period in order to allow for a sufficient period to pay off an 
investment in a mill and other facilities. Similar considerations have 
dictated long term contracts of up to 10 years duration with 
concessionaires in the National Park System. Transfer of the park 
concession model to fuels reduction programs on the national forests 
might prove appropriate in other respects--for example, a specific 
large area for tree thinning could be designated (perhaps as a result 
of a local collaborative process) in an area surrounding a community 
and then a long term contract might be awarded to a ``concessionaire/
tree harvester'' to do the job, including the building of a new mill to 
process the small-diameter trees.

                    Cost-sharing of Fuels Reduction
    Although commercial sale of small-diameter trees can significantly 
reduce the public costs of thinning forests to reduce fire hazards, 
many fuels reduction efforts may still require some element of public 
funds. The state and local government partners in the planning and 
development of these efforts should also contribute a share of the 
costs. Much of the benefit of excess fuels reduction will accrue to the 
citizens of the states and localities. It is often their actions in 
building homes and other structures in forested areas that increase the 
dangers of wildland fire and the costs of fire fighting. States and 
localities have the regulatory authority to control the location of 
such development in fire prone areas. In general, states and localities 
will have an incentive to plan for a more cost-effective approach to 
fuels reduction in surrounding forests, if they are contributing a 
share of the costs.
    An equal division, 50 percent Federal and 50 percent state and 
local, might be an appropriate cost sharing formula.

                     Curbing Unilateral Veto Power
    Numerous observers have described the current decision making 
process for the national forests as ``broken.'' The land use planning 
system, by most accounts, does not work. It promotes conflict and 
polarization as much as agreement. The process of planning takes long 
periods and causes many delays. In the end, the land use plan often 
fails to provide the basis for actual management decisions. Land use 
planning thus becomes more a matter of public relations, or litigation 
strategy, than the basis for rational decision making that was 
originally the goal of Congress in mandating planning in the 1970's.
    The land use planning and other procedural requirements afford so 
many opportunities for appeals and other delays that outside groups in 
effect can often exercise a unilateral veto power--if not forever, at 
least for the duration of the appeal process, and then perhaps through 
continuing rounds of further appeals. Litigation then often arises 
which involves its own burdens and delays.
    The effect of the current system is often to impose a de facto 
management decision of no action. Reforming the current system has been 
complicated by the fact that some groups have in fact preferred the no 
action alternative, and thus have strenuously resisted any efforts to 
curb the existing opportunities for delay and obstruction. It may have 
seemed that no action was a reasonable approximation to a policy of 
achieving ``natural'' conditions on the forests--if no management 
actions were taken, then the human role would seemingly be minimized 
and natural forces might appear to be driving the system.
    However, the forest fires of 2000 have shown the limitations of a 
no action strategy, and the fact that it will not achieve ``natural'' 
conditions on the forests. Because of a century of fire suppression, 
the fires that have burned have been much more intense and otherwise 
far out of the range of ``natural'' fire. They in fact have imposed a 
substantial human-caused change on the ecological condition of the 
national forests. There is in fact probably no management strategy at 
this point in time--including no action--that could validly be 
described as achieving a ``natural'' result.
    Yet, the current system in effect is strongly biased in favor of 
those who prefer the no action alternative. It is possible for a group 
of concerned parties to discuss forest management options and develop a 
fuels reduction plan that has wide community support, and yet any one 
of these parties will have the ability to prevent its implementation. 
Indeed, marginal parties who may disagree and who may not have 
participated in the management decision process will also have this 
unilateral veto power, if they possess a minimum of money and legal 
skill.
    The existence of an outside veto power partly reflects the distrust 
of the Forest Service and other Federal agencies on the part of many 
people in the West. They are reluctant to let the agencies act on their 
own when the agencies have made so many mistakes in the past. However, 
if management decisions on Federal forests reflect a much wider range 
of participation and buy-in, the existence of an outside veto power is 
less justifiable and in fact becomes a serious obstacle to effective 
management actions.
    If a veto power on the actions of Federal agencies is necessary, it 
should in any case not be a unilateral veto power available to anyone. 
It should be assigned to a state or local official who in fact 
represents politically a much wider segment of public opinion. The 
approval of the governor of a state, for example, might be required in 
order to implement any fuels reduction plan on the national forests. Or 
a similar requirement for approval might be given to the mayor of the 
community in the immediate vicinity of a national forest where a 
prescribed burn or thinning were being planned.
    In any case, if the Congress wants effective action to improve 
forest health and reduce forest fire hazards at any time in the near 
future, it will have to address the problem of the procedural hurdles 
to management action created by numerous past statutory requirements 
for planning, environmental impact statements, and other decision 
making requirements.

            Figure 1.--1990's Warnings of Catastrophic Fire
    1993--A panel of leading American foresters meets in Sun Valley, 
Idaho. Its report states that the policy of suppressing forest fire, as 
has been followed in western forests for most of the twentieth century, 
has resulted in a large buildup of ``excess fuels'' As a consequence, 
``Wildfires in these ecosystems have gone from a high-frequency, low-
intensity regime which sustained the system, to numerous high-intensity 
fires that require costly suppression attempts, which often prove 
futile in the face of overpowering fire intensity. High fuel loads 
resulting from the long-time absence of fire, and the abundance of dead 
and dying trees, result in fire intensities that cause enormous damage 
to soils, watersheds, fisheries, and other ecosystem components.''
    1994--The National Commission on Wildfire Disasters, created by 
Congress, declares that ``millions of acres of forest in the western 
United States pose an extreme fire hazard from the extensive build-up 
of dry, highly flammable forest fuels.''
    May 1995--The U.S. Forest Service publishes Course to the Future: 
Repositioning Fire and Aviation Management, declaring that under 
current policies ``the potential for large, catastrophic wildfires 
continues to increase'' and when they occur, as they inevitably will, 
``it will directly conflict with our ecosystem goals.''
    December 1995--The U.S. Secretaries of Agriculture and of the 
Interior jointly issue a report on Federal Wildland Fire Management, 
stating that ``millions of acres of forests and rangelands [are] at 
extremely high risk for devastating forest fires to occur.'' The 
Secretaries declare that many forested areas are ``in need of immediate 
treatment'' to reduce fire hazards.
    1997--A panel of leading foresters reports to Congress that ``fires 
in the [wetter] Pacific Northwest occur less frequently than in the 
inland West, but can be even more catastrophic because of the high fuel 
volumes (dead trees). The limited road system and infrastructure make 
Federal lands in this region increasingly susceptible to catastrophic 
fires.''
    1998--Barry Hill, Associate Director for Energy, Resources, and 
Science issues of the General Accounting Office, testifies to the 
Congress that as a result of past policies of fire suppression in the 
interior West, ``vegetation accumulated, creating high levels of fuels 
for catastrophic wildfires and transforming much of the region into a 
tinderbox.''
    1999--The General Accounting Office issues a report on Western 
National Forests--A Cohesive Strategy is Needed to Address Catastrophic 
Wildfire Threats. The report finds that the Forest Service ``has not 
yet developed a cohesive strategy for addressing several factors that 
present significant barriers to improving the health of the national 
forests by reducing fuels. As a result, many acres of national forests 
in the interior West may [still] remain at high risk of uncontrollable 
wildfire at the end of fiscal year 2015.''

    Chairman Radanovich. I appreciate the comments from all 
three members of the panel. I will begin with a few questions 
and then we will open it up for questions from other members.
    Mr. Hill, given the fact that there was a report in 1994 by 
the National Commission on Wildfire Disasters, 1994, I will say 
again, why did the Forest Service need a report from you 
highlighting a lack of a cohesive strategy even in April 1999 
in order to force the Service to produce such a report? Why did 
it take that long?
    Mr. Hill. Well, that is a good question. I don't know if I 
have the right answer. My speculation would be that, hopefully 
at least, our report served as a catalyst to kind of bring it 
all together into one document, what the problem was and the 
need for a strategy. Certainly, as you point out, there have 
been a number of studies done over a number of years since 1994 
that have pointed out the seriousness of the problem and the 
fact that it would take priority efforts and funds in order to 
address it.
    And the other thing I think is since the early 1990's, the 
trend has been an increasingly growing number of fires each 
year, an increasingly growing number of acres that are burned 
each year, a significantly increasing number of catastrophic 
wildfires that have occurred year after year. And certainly it 
culminated this summer in the disastrous fire season that we 
have had this year.
    So I think there are a number of factors that have gotten 
the Forest Service to the point where they realize this is a 
desperate situation that perhaps requires some bold action at 
last.
    Chairman Radanovich. Did the administration react directly 
after the release of your report in April 1999? Or maybe you 
can educate us as to what the difference was or maybe the 
possible reaction when your report came out and then the 
reaction by the President who recently toured--I guess it was 
Montana and Idaho and the fires there just recently, and his 
call for another strategic plan or something?
    Mr. Hill. Right. In our April, 1999, report, we did 
recommend that the Forest Service develop a cohesive strategy 
that would deal with the problem. Shortly thereafter--they 
agreed with the recommendation, and shortly thereafter they set 
to work to develop such a cohesive strategy, and we saw an 
early draft of that late last year. To my knowledge, they have 
been continuing the work on that draft. We have not seen the 
draft come out in final yet. We understand it still is in 
draft. Certainly the President's action that occurred recently 
triggered the report to the President has been the most formal 
action that has been taken since our report was issued.
    Chairman Radanovich. Mr. Phillips, what happened between 
1994 and this fire season this year?
    Mr. Phillips. The draft cohesive strategy is not the first 
study. It probably culminated several studies that had taken 
place previously, one by regional forester Bob Jacobs and 
Michael Raines that looked at individual fires, large fires 
that had occurred and identified where some problems were. So 
we had a lot of information that, when the GAO took a look at 
the situation and said you need to bring it all together in a 
cohesive strategy, a lot of that information was there. We had 
identified the existence of high-risk areas across the country. 
So the work that we did after the GAO report was not the first 
effort. But I would compliment the GAO on helping us bring it 
all together with the way they looked at it.
    Chairman Radanovich. As I understand, in the President's 
plan it emphasizes local decisionmaking as part of the 
decisions on management of forests. Yet that reminds me of a 
California forest plan called the Quincy Library Group which, 
as you know, was a forest plan that was put together by the 
three adjoining forests in Mr. Herger's district not long ago 
that included timber harvesting as an effective management tool 
to manage the environment within the three national forests in 
that area, a plan that the President encouraged the development 
of when he toured the effort during the Spotted Owl wars I 
think during 1992.
    The community took him seriously, put together a plan that 
included timber harvesting, came to the Congress with it and 
met stiff opposition from the administration until they 
realized that that is what they were out there encouraging in 
the first place, and then it passed by 426 votes in the 
Congress, and eventually the President signed it into law.
    Now that we have accomplished--those of us that believe 
that timber harvesting is part of a good management tool for 
the forests believe that we have had a victory. It then met to 
be stymied by the administration through its policies and is 
currently not being enacted and has almost run out of its 
charter in Quincy. How do you respond to that when the 
President or at least in part of this plan is encouraging local 
decisionmaking and local input when, to this point, it has been 
demonstrated it has been ignored so far?
    Mr. Phillips. I have had a particular interest in this. I 
have met with Congressman Herger on a couple of occasions to 
look at where some of the stumbling blocks were to get this 
moving along.
    I started my career on the Plumus, either marking timber or 
fighting forest fires, so I have a large interest in the 
success of this.
    Let's look at what has happened since Congress passed the 
bill that I am aware of. They had about, I think, 300 days to 
complete the EIS and came pretty close to meeting that, maybe a 
couple of days over. So they are really in their first year of 
implementation in terms of getting the projects out. A big part 
of that was defensible fuel profile zones, testing a lot of 
those concepts. This year they will have accomplished somewhere 
between 17 and 19,000 acres. They are also working on an 
additional 25,000 acres of projects for next year.
    We are talked about getting the funding strategy together 
that they need to fund those projects. So I think they are 
making some progress. They are doing a lot of the work on the 
east side, low elevation east side. If you look at a fire map--
--
    Chairman Radanovich. Isn't that where none of the timber 
is, though? You are really talking about areas and acreage 
where there is very little, if any, forest; and you are talking 
about the area within these forests that are nonproductive for 
timber purposes.
    Mr. Phillips. But a big part of this strategy is to reduce 
fire hazard.
    Chairman Radanovich. Isn't a part of the strategy of the 
administration to squelch any idea of selective timber 
harvesting in any of the Nation's forests? Even when it was law 
that was passed and signed into law by the President, he is 
still using that administrative force or the administrative 
authority to stop the implementation of a plan that encourages 
local control?
    Mr. Phillips. I don't believe so.
    Chairman Radanovich. You are talking about areas within 
that forest that are not productive forest-wise at all, very 
simple to maintain because there is very little forest there.
    Mr. Phillips. Again, they are trying to concentrate where 
the defensible fuel profiles need to be placed. There are 
issues over viability of the owl that we are having to work 
through with Fish and Wildlife Service. I think we are making 
progress there.
    Chairman Radanovich. Isn't the implementation of the owl 
standards more focused on the areas of the Quincy Library Group 
than there are more so than any other part of the forests in 
California or Oregon simply because the harsher standards are 
put there to stop the implementation of the Quincy Library 
Group plan?
    Mr. Phillips. I don't think so. I have seen documentation 
from leading owl biologists that say that there is a large 
concern over viability; and what we are trying to do under the 
law which said we had to comply with all Federal laws, we are 
trying to meet that intent.
    Chairman Radanovich. Isn't the implementation, though, of 
that plan in that area to stop what some environmental groups 
perceive or desire and that is lack of footprint or management 
or harvesting in any way as far as the management of forest 
health or forest maintenance?
    Mr. Phillips. Not by the Forest Service. But it is no 
secret that there is not a unanimous agreement among the public 
that this is a good project. But our intent is to implement the 
law.
    Chairman Radanovich. Thank you.
    Mr. Nelson, I was just out in my district in California and 
took a tour of the Manter fire, which was a fire that was 
recently happening in the Sequoia National Forest. It burned 
thousands of acres. I am not sure of the total. But I had an 
interesting discussion with some of the Forest Service 
employees in that area who had mentioned with regards to the 
use of fire as an understory, as a maintenance tool in the 
management of forests.
    Their statement was--if you are not familiar with the 
Sierra forest system, there are 10 national forests in the 
Sierra Nevada mountains; and their statement was that in 
order--if you had to depend solely on fires for maintenance of 
understory and such and not rely on timber harvesting, that you 
would have to harvest or, excuse me, burn a total of 20,000 
acres per each of those 10 forests in order to keep up with the 
fuel load buildup. And that, on an average year, there is about 
5,000 acres that burn per forest, not just in the forest but 
down lower elevations in BLM land and in private land.
    So for the Sierra Nevada system, as you know, it is right 
next to a very large basin, the San Joaquin Valley, which has 
an inversion layer and over a million people in the basin that 
might suffer air quality problems if 20,000 acres per forest of 
the 10 forests were burned every summer in order to keep up 
with the fuel load. I guess my question is, when are people 
going to realize that you can't depend on fire as a means of 
forestry management and understory load and that timber 
harvesting of big and small trees in addition to controlled 
burns is really the best fire forest management tool available?
    Mr. Nelson. Well, of course, as you probably know, I can't 
answer exactly when people are going to realize that, but I 
think you have put your finger on the problem. Why hadn't we 
done anything after, say, the National Commission on Wildfire 
Disasters came out with its report in 1994, which itself was 
actually part of the followup to the 1988 Yellowstone and other 
fires across the West. So in the year 2000, we already had 
indications 12 years ago that we were getting into a new kind 
of fire regime with much hotter and more rapidly spreading 
fires.
    I think that the answer really at the fundamental level 
goes to certain attitudes which have been very prevalent in the 
environmental movement, that the goal of national forest 
management should be to achieve a natural form of management. 
And it is hard to figure out what natural actually means in 
practice, but people have been making the effort.
    One conclusion they reached, applying this general 
philosophy, was that prescribed fire was at least an 
approximation of natural--although, if you set it, fire really 
wasn't exactly natural. But that thinning was not natural and, 
in fact, that thinning came in the same category as timber 
harvesting. Also, a lot of the environmentalists--to tell you 
the truth, it was not a big surprise--don't trust the Forest 
Service. And they were concerned that if you let thinning in 
the door, it would be the opening wedge for what they regarded 
as a large new program of logging the forests. So, the 
environmental movement in this country has basically been very 
strenuously opposed to a thinning program.
    Then, as I mentioned earlier, there are all the loopholes 
in the law which allow for unilateral veto powers on the part 
of a lot of people when it comes to Federal management actions.
    So if you have an important group with a fair amount of 
money, a lot of political clout, some good lawyers, their 
wishes can often dominate the final outcome. And, in effect, 
for a lot of environmentalists, they preferred no action. They 
preferred it even though in fact no action can lead to burning 
down the forests and all kinds of negative environmental 
consequences. Once we had all these years of suppression, no 
action could never be truly natural. Still in the way a lot of 
environmental groups think--and, of course, they had a lot of 
influence on the administration--they thought of no action as 
being natural. So for them, they weren't that unhappy with the 
idea of a system of unilateral vetoes that basically produced 
no action.
    So when is that going to change? I think actually the fires 
this summer are causing a reassessment, even within the 
environmental movement. A lot of the change has to take place 
there, given its large influence. It is partly because these 
fires have driven home the recognition that by just sitting 
there and doing nothing, it in fact may produce an extremely 
undesirable result.
    Chairman Radanovich. Thank you very much, Mr. Nelson.
    Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.
    I would like to get at this association or a lack of 
association between logging practices and susceptibility to 
these devastating fires.
    As you know, the Congressional Research Service recently 
analyzed the relationship between the level of logging and the 
number of forest acres burned and found a basically nonexistent 
relationship. It found there is very little correlation between 
the volume of timber harvested in national forests and the 
acres of forests that burned over the period 1960 to 1999. In 
fact, for some years within that period they found a positive 
relationship, that more timber harvest had correlated with more 
acres burned. But basically they found no relationship.
    I would like to invite all of you to comment on that, 
whether that is a credible finding and, if not, how you would 
dispute it.
    And, Mr. Phillips, I would like to ask you in particular 
the follow-up on the underlying question. Are this year's 
wildfires the result of reduced logging in our national forests 
and would allowing more commercial logging--and by commercial 
logging I mean the removal of large, commercially valuable 
trees--would that reduce the threat of catastrophic wildfire?
    Mr. Phillips. Since this fire season, there have been a lot 
of reports issued by a variety of different organizations. A 
lot of it is anecdotal. What is really important in the forest 
in terms of the effect on wildfire is how much fuel you have 
and where it is located. Is it located on the forest floor? Is 
it located at the midstory that allows the flames to jump into 
the overstory? Or is all that fuel biomass located in, in fact, 
the overstory?
    I would say that, from my experience timber harvesting, as 
long as you deal with the fuels that are left, the logging 
slash, as long as you treat that, you are probably not going to 
create a situation that is going to exacerbate a fire when it 
comes through there.
    I will refer to--probably one of the best examples was when 
I was a ranger in Denver we did a lot of harvesting and allowed 
fuel, that was really the demand at that time, to be used as 
the by-product from that harvesting. So the forest floor was 
left fairly clean. We would also go back in and do a prescribed 
burn on the needles and the limbs that were left.
    This summer, early this summer, the high meadows fire 
burned through that area. I went back and looked at that about 
a month ago. You could see where the fire burned in the 
untreated area, in other words, lots of stems per acre, lots of 
trees per acre. When it hit the area that had been managed, 
where there was fuel reduction that had taken place, the fire 
basically fell out of the tops of the trees on the ground; and 
they were able to control it a lot better. So it is really a 
function of how you treat the area when you are in there 
managing it.
    Let me just--if one of the staff could take these pictures, 
I will show you an example of where on the Shasta Trinity 
National Forest, Congressman Herger, where we went in and did 
some mechanical treatment and what this looks like after we did 
it. Category III areas, that we classified Category III, high 
hazard fuels, you are going to have to do some level of 
mechanical treatment in most cases. You can't go in and 
prescribe-burn it.
    Mr. Nelson. If I could answer your question about that CRS 
study, technically, in terms of the calculations, there was 
nothing wrong, but the question posed was simply the wrong 
question; and the result in terms of the issue that we are 
addressing here was bordering on meaningless. The study 
basically asked, is there a correlation between the level of 
timber harvesting in this year and the level of fires in this 
year. Nobody, even the most severe critics of the 
administration that I am aware of, has ever suggested that that 
is the relationship.
    These critics claim that a predisposition against logging 
got transferred over by environmentalists into a very negative 
attitude about mechanical thinning. As a result of the 
antagonism to logging that was reflected in the fact that 
logging in the national forests fell from 12 billion board feet 
in 1989 to less than 3 billion board feet in 1999, there was an 
associated reduction, there was an unwillingness, a refusal to 
expand the thinning program. Thinning is what would have been 
necessary, as has just been mentioned, to expand the fuel 
reduction effort on the national forest system.
    So as far as logging itself, in any given year the total 
logging program of the Forest Service has never involved more 
than about 500,000 acres at a time. And we are talking in terms 
of a magnitude of the total national forest acreage which is 
exposed to fire hazard of about 100 million acres. So obviously 
500,000 acres, whatever you do on it, even if the logging 
promoted or didn't promote fire, wouldn't have much effect on 
the level of fire in that year. In fact, the magnitude of fires 
this year is something like 15 times the total area logged in 
the normal timber harvest season.
    Mr. Price. Yes, but we are talking, aren't we in this 
study--and I don't want to quibble over this. Maybe you could 
submit something for the record if you wish to. But we are 
talking here, not talking 1 year at a time, we are talking 
about a cumulative period from 1960 to 1999, is that not true?
    Mr. Nelson. I don't think so. Unless I misunderstand the 
analysis--and it wasn't perfectly clear--but I believe what it 
did was a statistical correlation as to whether there was a 
relationship between the level of timber harvesting in 1 year 
and the level of fires in 1 year, looking at a 20-year period.
    Mr. Price. That is not the way the findings were presented.
    Mr. Nelson. I think that there may have been some 
motivation on the part of people to take the study title, which 
is no relation between logging and harvesting, and not look in 
detail into the actual analysis done. As I say, it wasn't 
explained with a crystal clarity. But at least to the extent I 
was able to understand it, and I looked at it and spent some 
time studying it, what was actually done was a correlation--a 
statistical correlation or regression analysis, if you want to 
call it that--where the explanatory element was the level of 
logging in any given year, and the dependent variable, or the 
number that was being correlated with, was the level of fire or 
acreage burned in that year.
    I think anyone who knows how these kinds of statistics work 
would understand there is not going to be any relationship of 
that nature. The real question is, to what degree over a number 
of period of years have we engaged in a thinning program to 
reduce the level of excess fuels on the national forests? If 
someone could show that, well, there are certain areas where 
there were excess fuel reductions over a certain period of time 
and that had no effect on the levels of fire in those areas, 
well, that would be a significant analysis. But I don't believe 
this is what was done.
    Mr. Price. The study aside, do you agree with what I 
understand Mr. Phillips to be saying, namely, that whether or 
not the removal of large, commercially valuable trees is taking 
place is not the critical variable? That what the critical 
variable is is whether these smaller trees and other materials 
are removed. That is the critical variable.
    Mr. Nelson. Absolutely. That is the question. The argument 
that is being made is that these forests have developed these 
very large numbers of very small diameter trees, between 4 and 
12 inches, let's say, which historically have been marginal 
commercially but increasingly are being used on a commercial 
basis because the industry finds they need to turn to this. And 
those trees are virtual kindling wood and they built up because 
of fire suppression over many decades, the danger was 
recognized by the 1970's in some circles. But by the 1990's, on 
a widespread basis in the forestry profession, people were 
saying, this is a kindling wood situation out there. These 
forests are going to burn if you don't somehow get rid of this 
wood.
    The Clinton administration knew about it, but they were 
tied to the idea of prescribed burning as opposed to mechanical 
thinning because thinning, in the lingo of these perceptions, 
became logging and logging was bad. We had just been through 
the spotted owl episode. The environmental movement had won a 
great victory in their mind. They had sharply reduced logging 
in the Pacific Northwest, and then similar environmental 
pressures caused it to decline all over the West.
    All of a sudden, from their perspective, they were 
confronted with the possibility that this surrogate policy 
called fuels reduction, which they had never heard of until 
recently, was going to be used as a way of sneaking back into 
the Forest Service and the national forests a massive new 
timber program. That was anathema to many leading 
environmentalists so they used every means at their disposal to 
resist this effort to, as they saw it, reestablish a logging 
program in the name of fuels reduction program, by going in and 
taking these 4- to 12-inch trees, of which there is an enormous 
volume.
    Contrary to most perceptions on the national forests, in 
the West the volume of wood on the national forests has 
increased steadily over the decades. Taking the Intermountain 
West--I actually looked it up here just before I came here or 
else I wouldn't have the number right at hand--but the volume 
of wood on the intermountain national forests--that is where 
all these fires have burned this summer--was 57 billion cubic 
feet in 1952. In 1992, it was 70 billion cubic feet. And there 
are projections that if we don't increase our levels of harvest 
way above what we are thinking of in terms of this environment 
of no timber harvesting that we are in right now, we are going 
to see continuing increases, as much as 20 or 30 percent more 
in the next 20 or 30 years.
    What will probably happen, of course, is that some of that 
wood, the volume won't increase, because it will actually burn 
instead of increasing. But that is part of the choice we have 
to make at this time.
    Mr. Price. Mr. Phillips, let me get back to you. I know we 
have limited time here.
    Apart from whatever allegations anyone wants to make about 
people's motivations, I would like to just return, if we could, 
to what the fact of the matter is here. And the fact of the 
matter seems to be that whether we are or are not removing 
these large, commercially valuable trees is basically not 
related to the fire hazard. The critical variable is the 
smaller trees, the brush, the material closer to the ground. Is 
that right?
    Mr. Phillips. Those are the critical variables. But I also 
want to be clear that if you remove the large trees and don't 
treat the limbs and such, the fuels that are left over that you 
don't take out of the woods, if you don't treat those, then you 
do run the potential of increasing the fire hazard.
    Mr. Price. Absolutely. That seems very clear.
    Mr. Phillips. I would also say, the reduction of the fuel 
hazard situation around the country, I hate to see it turn into 
a logging/no logging debate. It is really about removing fuels, 
treating the hazardous fuels that need to be treated.
    Mr. Price. I think it is very important to get past the 
logging/no logging debate. That is exactly where I would like 
to take us today in the line of questioning I am trying to 
pursue.
    There is a problem, isn't there, though, that most of these 
small trees, the other materials that need to be removed in the 
thinning operations, have very limited commercial value? What 
are the possibilities of devising commercial uses, for 
stimulating the development of commercial products that rely on 
these materials? Any comment on that?
    Mr. Phillips. As I mentioned earlier, when I was a district 
ranger in Denver, there was a high demand for fuel wood. We 
could sell it for a lot of money. Unfortunately, that demand is 
not what it was then. However, we have been doing a lot of work 
in trying to find new products, and the President's report 
actually addresses the need to do more of that.
    We have a project called the Four Corners Project where we 
are working with local communities to better sort the products, 
to make them more available. Our research program is doing some 
really--what I call unique work, consider unique work on the 
development of small diameter materials into products that are 
more usable. I will send this up for you to look at. But it is 
basically using what we see in 2 by 4s today, joining them in 
finger joints on a circular plane, so you can take material, 
especially a lot of the large pole pine that you find in the 
West, and join that and make a more valuable product out of it.
    Mr. Price. Thank you. I will pick up on this in the second 
round of questioning.
    Chairman Radanovich. Mr. Herger, you are up.
    Mr. Herger. Mr. Chairman, thank you very much.
    I want to again thank each of our witnesses for being here 
today, Mr. Hill, Mr. Phillips, Mr. Nelson. I really appreciate 
the fact that we are getting into what I believe is some of the 
crux of the problem.
    I would like to invite my colleagues to join us in what--we 
have an annual woods tour in our district. It is usually at the 
base of 14,000 foot Mount Shasta in which we do what we term, 
as Paul Harvey says, tell the rest of the story. And a lot of 
the questions I think that have been asked are answered during 
this period of time of this woods tour. We have had 
approximately 40 Members of Congress over the years in 10 
different tours that have been there.
    I would like to address just some of what I see as the crux 
of this challenge we have. I remember back when I was first 
elected in my first term in 1987, I was in a hearing in the 
Agriculture Committee in the Forestry Subcommittee and one of 
the witnesses, one of my friends from the environmental 
community, made a statement that 90 percent of the trees had 
been cut.
    Having flown and driven through our district, which is 
96,000 square miles in our area, you can drive for hours and 
fly for hours and all you see is forest. I asked him, I said, 
let me make sure I understand this. Ninety percent. That means 
nine out of every 10 trees has been cut. There is only one left 
out of 10? Kind of think a little bit.
    But I think this really is an example of the misinformation 
that we have been hearing for years concerning what our 
challenges are out in preserving the health of our national 
forests. I think it really stems as something that is 
relatively simple, I believe.
    I heard a comment used earlier, I believe it might have 
been from you, Mr. Phillips, which I certainly agree with, and 
that is returning to the natural process. I think probably all 
of us would like to do that. But I would like to address that a 
bit.
    We do not have a natural process going in the forest now. 
We should all be aware of that. Those of us who aren't--the 
reason we don't is, starting at the beginning of this century, 
very well-meaning people, as we began building more and more 
homes out in our forests, began preventing forest fires. As a 
matter of fact, we prevented all of them--the Smokey the Bear 
program which has been very successful over the years.
    What has happened is that, unlike the natural process, 
which even the American Indians, the Native Americans, would 
promote because they would set fires out in which you would 
have regular fires going through our forests where the brush, 
the smaller trees would be thinned out and you would have the 
large trees, the commercial trees, as my colleague Mr. Price 
was pointing out, that would be large, and it would be a 
positive thing. What has happened when we prevented all these 
forest fires is that now we have fire ladders. We have forests 
that are not 90 percent missing. Just the opposite is true. We 
have forests that are three and four times denser than they 
have been, as was alluded to.
    These are interesting statistics. In 1952, was it you, Mr. 
Nelson--I was trying to write this down--we have 57 billion 
board feet.
    Mr. Nelson. In the intermountain West.
    Mr. Herger. In the intermountain. That had increased to 70 
billion. We have some forests that are two to three to four 
times denser because we have eliminated fires.
    Now in addition to that, what we have now are fire ladders. 
So now when we get the natural process, when we get a lightning 
strike or when a fire starts or when our own government goes 
out, as we saw happen in New Mexico and has happened in my 
district up around the Lewiston fire just last year where we 
actually go out and set the fires ourselves, a so-called, 
quote, control burn which ends up burning hundreds of thousands 
of acres because it gets away from us, we have these fire 
ladders that we can't control. It is not natural anymore.
    The only way we can return to that is to begin going in and 
thinning this out, removing the brush, returning it to the way 
it was historically. We can't do it by just setting a match 
there and starting it, because everything burns down, we have a 
catastrophic fire. But what we do do is go in and do it in the 
right way.
    That is what the Quincy Library bill is about, which is 
bipartisan, which passed this House in 1998, a bill that I 
authored, 429-1. You might say it was unanimous. We had a 
former Libertarian who votes no on everything, was the only no 
vote. Everyone voted for this bill. It was bipartisan.
    In the Senate, Senator Feinstein, a member of the other 
party, sponsored the bill over there. It passed overwhelmingly 
there. It was signed by the President.
    But that is where we get into the controversy here, Mr. 
Phillips. Because, as Mr. Radanovich was asking questions 
earlier about its implementation in the district, I can 
represent--I can tell you that those people who wrote the 
bill--and I didn't write it. We had the local community write 
it, the local environmentalists wrote it, local people worked 
in the forest products, locally elected individuals.
    The reason it was called Quincy Library is that is where 
they met, because they thought that is the only place they 
wouldn't yell at each other. Therefore, they met for several 
years, worked out a plan that they all agreed on.
    This is impossible, what happened. But they did the 
impossible. It was a plan that was environmentally safe that 
they worked on. It was a plan that protected the environment. 
It implemented all the current science and all the current laws 
in a way that they could go in and begin restoring these 
forests the way they were historically, going in and thinning.
    Mr. Price, let me mention what they do there is not go in 
and take out all the commercial trees. They basically are 
thinning. And as was pointed out by Mr. Nelson, Mr. Phillips 
and others is, fortunately, we are beginning to learning how to 
use the smaller trees as we thin them out. We see an example of 
that. But we also occasionally need to take a larger tree here 
and there, not clear-cut them but thin them out so as to make 
sure that the plan that they came out with--guess what; this is 
unbelievable--it doesn't cost the taxpayer money. As a matter 
of fact, it makes $3 for every $1 they invest.
    These are environmentalists that are working. It is just 
some common sense that they used to make it--so there is a 
little bit of incentive there, and the taxpayers aren't paying 
for it. But, actually, it is a win-win-win, something almost 
unheard of in this environmental logjam, everybody disagreeing 
with everybody else like we are living in today. Therefore, 
just a little bit of background, a little bit of history.
    Mr. Price, I would like to personally invite you to our 
next woods tour where we go out and look at all of this and 
allow you a chance to ask questions. We have it every year, so 
if you can't make it this next spring, the invitation is open 
to you. We would love to have you and your wife come out and 
see the rest of the story.
    With that, let me ask a question, if I could, Mr. Phillips. 
And I want to thank you and I want to thank what I hear now 
coming from the administration right now of they are beginning 
to talk about thinning. I think those of you have explained it 
very well, how it is beginning to evolve. Hopefully, we are 
getting now where we can work together to save the environment. 
There aren't any Spotted Owls can live when we have these 
catastrophic burns we have. Nothing can live there. And we 
lost--what is the number--about 6.2 million acre feet of burn 
this year. That is more than double or triple the national 
average.
    It is not like it is something we didn't know was coming. 
It has been projected since 1994, at least--even by the Forest 
Service itself. But maybe it takes this little bit of extra 
push to get us all working together to do this. As you 
mentioned, hopefully the environmental community itself will 
begin working with us rather than against us.
    I do have to refer, though, to this Quincy Library plan 
which passed virtually unanimously. I can tell you that these 
individuals--and I would like to have you comment again if you 
would like to--but the individuals who wrote it, who live in 
these communities, could not be more unhappy--and I am putting 
that very mildly. They do not agree with your comment earlier 
that Mr. Radanovich asked you how it was being implemented. And 
you felt it was being implemented--I think you said, basically, 
well, you gave some statistics of what they had been working.
    I would just like to remind you that this is only a third 
of what the law says that you would treat, that we were talking 
about east side. East side of the Sierra Nevada mountains is 
where it is being implemented. Most people have no idea what 
that means but let me, being born and raised around there, tell 
those who are listening what it means.
    The east side is the desert side of the mountain, as you 
know. As the rain comes off the Pacific or the clouds come off 
the Pacific Ocean and work their way up the mountains, it 
falls. We have very healthy, fast-growing forests. As it gets 
around to the east side, there isn't any more rain anymore, and 
so you have basically a desert. You have trees that basically 
don't grow.
    So to be treating in that area, I am not going to say it is 
a waste of time, but, comparatively, it is almost a waste of 
time. And where we need to be treating is where we have this 
three and four times growth. Yet the Forest Service, for 
whatever reason, the Clinton-Gore administration for whatever 
reason, the direction coming down is not allowing the Quincy 
Library plan to be implemented where it has this greatest need.
    If that weren't bad enough, the forest right around these 
three, they are cutting two and three times more in those areas 
than they are an area that we need to be treating. And the big 
forest fire that we read in the news and saw the story fire, 
that is 40 or 60,000 acres that have burned within this same 
area.
    Again, it is tragic. We do have a plan that has been worked 
out. I think we have a model that we can work on that everyone 
agreed on and the Congress said you will implement, but yet for 
some reason the Forest Service is not implementing. I would 
certainly appreciate your comment.
    Mr. Phillips. I would just reiterate my earlier comments. I 
talked to the forest supervisors out there. I feel that they 
are working very hard to implement it.
    The east side, if you look at a fire history map of the 
Plumus and the Lassen, the east side and the lower elevation 
west side is where most of the fires occur. I understand also 
the need to treat the center part of that around Quincy, 
Greenville and those towns also. They are trying to work 
through the environmental concerns that are raised in order to 
implement that. It doesn't do us any good to get tied up in 
court. They are trying to do a product that allows them to move 
forward. There is already one lawsuit on the project right now 
that they are trying to work through.
    Mr. Herger. That lawsuit is probably suing because you are 
not enforcing it enough, I believe.
    Let me also make a comment about working hard. I want to 
commend the Forest Service, the people, my constituents, who 
live in that area that work very hard, that are dedicated 
people. My concern is these policies that are coming down from 
the Clinton-Gore administration that tend to not allow them to 
implement or do what I feel they would like to do and as they 
are trained to do. But I just want to let you know that the 
people who wrote this legislation, the real experts, not me but 
them, who live there, environmentalists as well, are very 
unhappy with the near lack of the implementation of the Forest 
Service. I am just telling you that is what they tell me.
    Mr. Phillips. I talk with them, also.
    Mr. Herger. You must hear the same thing I do.
    Mr. Phillips. I talk with them. I hope to get out there 
after Congress adjourns and look closer at the implementation.
    Mr. Herger. I can assure you they are not happy campers.
    Again, thank you. I thank each of you. Hopefully, we are 
beginning to turn the corner where we can begin doing the type 
of thing that will preserve these forests and doing it in a way 
that we don't cut down all the commercial trees, just a few of 
them, along with the thinning which we are learning to be able 
to utilize as well and make it a win-win.
    By the way, I have 42 mills that have closed just in the 10 
counties that I represent, in an area where my statistics are 
probably higher than what you mentioned in the Rocky Mountains 
as far as the amount of trees, that we have more today than we 
had back in the 1950's.
    Mr. Nelson. If I could make just a comment.
    Mr. Herger. Please do.
    Mr. Nelson. When the Congress deals with these situations 
like the Quincy Library and it finds that it is unable to get 
the results that it is looking for, as I said, I think that 
these fires and the whole situation of excess fuels has created 
a situation where Congress needs to look at the whole framework 
and a lot of the basic assumptions of public land management.
    But one option, and I don't think--it certainly wouldn't 
work for the Forest Service as a whole--but on, say, an 
experimental basis, possibly five areas or something like that, 
would be to take something like Quincy Library and go much 
further in actually decentralizing the authority and move into 
the role of thinking about actually empowering local groups in 
a much more vigorous way than we have seen so far. Having the 
Federal Government move out of the role of the final 
controlling manager and more into the facilitator, source of 
information, source of technical assistance and maybe 
implementor of some of the actions on their own lands but where 
you might have, for example, a board of directors that would 
actually have some kind of legal authority that would be 
composed of local government officials and timber people and 
environmentalists.
    There are many ideas that are floating around. Lots of 
study groups and so forth have been looking at some of these 
out of the box solutions in terms of traditional forest 
management. As I say, I can't imagine that anyone would propose 
them at this point for the Forest Service system as a whole, 
but it seems to me that the time may at least be getting close 
where these things could be done experimentally for particular 
situations.
    Mr. Herger. Thank you, Mr. Nelson.
    Of course, that was the whole purpose of Quincy Library. It 
was a pilot plan over parts of three national forests, 5 years, 
to see whether it works. What is so--we feel it will work. I 
think we can look at examples, places that we can see where 
parts of it has been, where we have thinned out, how it has 
worked--several of you have given examples of that--but to see 
how--at least through the Clinton-Gore administration has been 
disallowing this 5-year program to go forward is incredibly 
distressing to our area, and I think is very harmful to our 
Nation and to our natural resources.
    Thank you.
    Chairman Radanovich. Thank you, Mr. Herger.
    I, too, want to reiterate Wally's concern for Forest 
Service and the great job that they have done in fighting the 
fires. The rank and file of the Forest Service are incredible 
people, including you, Mr. Phillips, and the work that you do.
    The problem I do have is with the administration and the 
powers that be that influence that administration on forest 
policy. I am really kind of concerned about this idea that if 
you buy fuels management as a means, commingle it with fires 
for maintaining fuels management and forest health that you 
have got to leave the big trees out of that. What is the long-
term objective if you are going into the forest consistently 
clearing out underbrush and taking out small trees and leaving 
big trees? Don't you end up with a forest of big trees that is 
less dynamic, that all die at once, that you are all back in 
the same situation at one time where you have fuels buildup and 
it is just in the form of dead big trees? That is a pretty 
undynamic way of looking at forest management, wouldn't you 
agree, Mr. Phillips?
    Mr. Phillips. In some respects, yes. In others, it really 
depends on the objectives you have for that piece of land. If 
your objective is to manage that land for commercial purposes, 
then you might do both of them simultaneously. If your 
objectives are to manage it for some other type of use, you may 
go in for an action just to reduce fuel. It really depends on 
the objectives for that area. Those objectives are determined 
by the public through the land management plans, and then the 
local people on the ground who are trained determine the best 
way to manage that.
    Chairman Radanovich. Mr. Nelson, do you want to comment on 
that?
    Mr. Nelson. Yes. I think that, as most everyone here knows, 
in the 1990's the Forest Service has been implementing the idea 
of ecosystem management which is a somewhat fuzzy idea, but you 
can say that it shifts the attention from the old multiple-use 
idea, which was that basically the forests existed to serve 
human uses, to an idea that the goal of management now is to 
actually achieve a certain forest condition, ecologically 
speaking.
    So that raised the question, well, OK, what are we trying 
to accomplish by our ecosystem management? If it is not 
maximizing human uses like we used to do, taking all the uses 
into account, figuring out how to maximize the value, what is 
our ecosystem target?
    The people in the field have kind of struggled, and out of 
a struggle that has gone on a few years has basically come the 
following idea, that what we are trying to do is establish 
something which is natural. We don't exactly know what natural 
is. So as a practical matter, if we have to implement 
something, we will define natural to be the forest condition 
prior to European settlement in the West. That means before 
human action came along in a heavy-handed way and started 
changing the forests, fire suppression and all the rest.
    So, actually, if you look at what the Forest Service is 
doing now and other Federal agencies, they have extensive 
research teams out there which are trying to figure out what 
the condition of the forest was in approximately 1870 or 1880 
or maybe 1850. It depends on the place that you are talking 
about; and then the goal of management is going to be to return 
the forest and the ecological system to about where it was in 
1870.
    I consider that that is a pretty radical shift in the 
nature of management for the national forests, which are, after 
all, 10 percent of the United States. In a State like Idaho, 40 
percent of the land area of Idaho is in the national forest.
    Some people who look at this in a somewhat cynical way say 
we are almost creating theme parks out there. It is like 
Williamsburg or something, except a natural version of this, 
and that we are recreating something real, even assuming we can 
do it, which in many cases is quite questionable. It may 
actually be more of a fantasy that we have accomplished this 
than we have actually accomplished it. But let's even assume we 
can do it. Is it really true that we want to take 10 percent of 
the land in the United States and try to manage it according to 
what its condition was in 1870?
    It certainly raises some questions in my mind, and I would 
also think that before we would do that as an operational basis 
for management that the U.S. Congress ought to give some fairly 
clear and explicit instructions rather than the Forest Service 
just go ahead to do this on its own, which is the way things 
have been working out.
    Chairman Radanovich. Thank you.
    Mr. Hill, is there evidence to suggest that parts of the 
areas covered under the President's roadless policy are near 
urban areas? And what would be the impact of that agency's 
ability to fight fires in roadless areas?
    Mr. Hill. Yes, there is evidence that there are some 
roadless areas near urban areas. But most of them--most of the 
roadless areas are in remote areas. There is not sufficient 
information--I think that is part of the problem we have noted 
in terms of this issue, is there is not a lot of clear 
information as to where these urban interface areas are in 
relation to some of these more open areas and where the roads 
are and where the high-risk areas are and how it all kind of 
fits together. That is part of the problem here.
    As far as the impact on fighting these fires in these 
roadless areas, yes, they are currently fighting them in the 
roadless areas. It is a little more difficult, a little more 
costly. The fact is they can fight them, but it is just more 
costly and more difficult.
    Chairman Radanovich. Mr. Phillips, I am not sure of the 
area, but as you know a few years ago there was a bark beetle 
infestation. I think it was during the drought. It seems to me 
it was responsible in part for the intensity, say, of the Boise 
National Forest fire, I think the Yosemite fires which I was 
involved in back in 1989, 1990. During that time the Congress I 
think passed a law that would allow the burned areas to be 
logged in order to get a lot of the dead debris out of there, 
keep it from falling, number one, harvest it while it was good 
for commercial purposes before it fell on the ground and rotted 
but also to prevent fuels buildup in the future.
    Yet the administration I think--I know that passed the 
Congress, and I understand that the administration held that up 
as well. I believe that the lack of the harvesting of some of 
the dead and dying trees that were due to the bark beetle 
infestation, it was very likely the cause of some of the fire 
buildup that has been happening even this year. Do you 
anticipate the same type of administration reaction when the 
concern about going in and logging up some of that dead and 
burned trees come before the Congress?
    Mr. Phillips. I think it is reasonable to expect that there 
will be some commercial sales, whatever is needed in many cases 
to restore the land to the way it needs to be, to a healthy 
condition. So I don't anticipate there will be any direction 
prohibiting commercial sales.
    I would also point out that in the last couple of years we 
did in Idaho go in and assist the forest with policy to harvest 
some insect salvage that they had there. So we are trying to 
help there where we can.
    Chairman Radanovich. By and large, most of those infested 
trees were left rotting on the ground, though.
    Mr. Phillips. Where is this?
    Chairman Radanovich. By and large, on the average, I think 
most of those trees were left dead and dying.
    Mr. Phillips. Are you talking about from the 1990 
situation?
    Chairman Radanovich. Yes.
    Mr. Phillips. Are you referring to the salvage rider?
    Chairman Radanovich. Yes.
    Mr. Phillips. I may not have my facts correct. I was the 
forest supervisor in North Carolina at the time. I know that we 
implemented that there. Nationally, I can't really respond.
    Chairman Radanovich. I think nationally the evidence would 
show--and we will both have to go look up our facts, that it 
was effectively stopped, at least in the Sierra and Stanislaus 
National Forests, the areas that I represent.
    Mr. Phillips. I know there was a volume target associated 
with that. I believe there was. And I had heard that nationally 
that target was met by the agency, but, again, I can't say that 
for sure.
    Chairman Radanovich. Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.
    I suspect we are not going to settle here today some of the 
underlying issues that have been addressed. Suffice it to say 
that, on the question of whether it is necessary or even 
desirable to include the harvest of these large, commercially 
valuable trees as part of these management plans is open to 
active question and dispute.
    I would like to refer in the record here to testimony of 
three professors of forestry from the western States, 
Professors Morgan, Neuenschwander and Swetnam, last year before 
the Subcommittee on Forests and Forest Health, Committee on 
Resources, where they say, and I am quoting, it is very 
important to leave the large trees in the forest when we thin 
or burn. These trees are the insurance for the future. They are 
critical to ecosystem resilience. Foresters call the needed 
prescription thin from below because it removes the smaller 
trees and their crowns while leaving the bigger trees. If there 
are few tree crowns of low bulk density near the ground and 
there is little vertical continuity between the crowns of the 
small and big trees, forests can often withstand surface fires 
even in dry, windy conditions. This will limit the development 
and spread of crown fires, particularly if the horizontal 
continuity of the crown bulk density in the principal canopy 
layer is also broken. It is the small trees that contribute the 
most to fire risk as they provide ladders for the fires to 
climb from the surface into the crowns.
    So perhaps at least we can agree on that. We are talking 
essentially about clearing out these smaller trees; and that is 
a challenge in terms of commercial viability, as you begin to 
describe, Mr. Phillips. You say there are some commercial uses 
for these materials, some possibility for developing commercial 
products. That is where I would like to pick up here in this 
period of questioning.
    I just wonder, we have had here a minor reflection, I 
suppose, of the timber wars today with some of the claims back 
and forth. I wonder if this September 8 report to the President 
from the Interior and Agriculture Departments represents 
something of an opportunity to get past this conflict between 
the environmental communities and the logging communities. To 
what extent does an increased and aggressive effort to reduce 
fuels in the national forest offer the prospect of commercial 
development, of employment opportunities for communities that 
have depended on logging in the past?
    Mr. Phillips. Do you want to go ahead?
    Mr. Price. Mr. Phillips first, then I will hear from the 
others.
    Mr. Phillips. I think it offers some good potential for 
contracts. Again, I will go back to when I was working on a 
Ranger district, we had a situation like that and made 
contracts available to local people who came in and did the 
thinning and gained some employment from that. So I think there 
is a lot of potential. Whether you have a merchantable product 
or not, you still have a need to go in and treat the fuels, and 
we will do a lot of that through contracts.
    Mr. Nelson. Well, the small-diameter trees, I think there 
is a very large potential market out there. I would cite, for 
example, a product called oriented strand board, which was 
virtually zero in terms of national production as recently as 
1980 and is now up to about 11 billion board feet a year. The 
production of oriented strand board, which has some 
similarities in use to plywood, is up to two-thirds of the 
level of plywood in the United States. So it has actually 
become just in 20 years a major part of the wood supply of the 
United States, and one of its attractions is that oriented 
strand board can be made from these small-diameter trees.
    There are other things that are going on. Again, partly 
because of the pressure of reductions in traditional softwood 
harvests, the timber companies have been making increasing use 
of hardwoods as a source of supply. And, again, they often use 
it--these are inferior quality woods--by chipping it, they make 
it into particles. They now have superior glues.
    I think actually we are only really at the beginning of 
these technologies, and the technology responds to the demand. 
As long as lumber was cheap and we had abundant supplies, the 
industry did not have the incentive. But now that we are 
getting to a situation where these low-quality trees may be one 
of our main sources of wood fiber supply in the United States, 
I think that there are many more technological developments out 
there that have not even been discovered. However, at least as 
far as the Federal lands are involved, the incentive is still 
not there right now.
    No one is going to invest in a mill in Colorado or Idaho, a 
new mill, in the current supply situation. They need 10 years 
to recover their investment. And right now who would know 
whether they would even get 1 year of supply. And to the extent 
that the technologies are fairly site-specific, they have to 
have local adaptations, they are not even going to invest in 
the research and development effort to find the best 
technologies to work in Colorado or Idaho.
    The Forest Service, which does not have to worry about 
making a profit, actually has done some very valuable work in 
this area in Madison, WI. For the last 5 or 10 years, their 
Forest Products Laboratory has been devoting increasingly large 
amounts of time to both the technological and also the economic 
aspects of small-diameter trees. And they have put out a series 
of reports that are available for anyone who wants to look at 
them, basically talking about what the current economic 
situation is, but also what the prospects are. And in general 
if you read through the reports, they are very optimistic about 
the potential economically of this form of wood utilization.
    Mr. Hill. If I may add a quick comment to that. Our past 
work has also demonstrated the lack of a commercial use for 
some of the smaller undergrowth. And regardless of whether you 
take the big trees down or not, aside from that debate, you 
will have to take the smaller trees out. And there really is no 
commercial market right now for using a lot of that biomass. 
And I think that is something that has to be encouraged and 
provide incentives and developed, because if we can develop the 
commercial industry to use this smaller biomass, that will help 
pay for a lot of the expense of doing the work that is needed 
to be done.
    Mr. Price. Thank you. I know we have a vote on the floor, 
and we are trying to wrap up. I again thank you all for being 
here. It has been very enlightening testimony.
    Chairman Radanovich. Thank you, Mr. Price.
    Mr. Herger.
    Mr. Herger. Are we starting a new round?
    Chairman Radanovich. No. You are finishing up the second 
round, if you would like.
    Mr. Herger. Sure.
    Mr. Nelson, do you have any estimate about the government 
revenues that might come in if we were to begin?
    Mr. Nelson. Well, I have tried to figure this out. I do not 
have any definitive numbers. These are sort of back-of-the-
envelope calculations. So the Forest Service or somebody can do 
a more definitive study, but I would think if we could provide 
assurances of continuity of supply so that someone could invest 
in a mill, and they would be assured that they would have 
enough supply to continue for 10 years, we could probably get 
maybe $25 to $50 a thousand board feet in stumpage fees for a 
lot of these small trees.
    And we are talking about enormous amounts of boardfeet. I 
mean, if this industry develops, it will not be a minor fringe 
industry. It will be a major contributor to the total wood 
supply in the United States, because as I mentioned before, 
just in the intermountain West there are 70 billion cubic feet 
of wood in the intermountain West. No one is saying we will cut 
it all, but even if we cut 10 or 20 percent in the areas where 
fire hazards are the greatest, we are talking about large 
supplies of wood, and I believe it can actually earn revenue. I 
would say in the future we could certainly be talking about a 
half-billion dollars a year or something like that in revenue.
    Mr. Herger. We are talking about net over expenses?
    Mr. Nelson. I am talking about stumpage fees. I am assuming 
we would still sell by competitive bid like we have under the 
old timber program, but now we would be selling the small-
diameter trees.
    I think our bidding procedures have to be looked at and 
revised. I think Congress will have to take a look at that, 
because I don't think the existing bidding system for timber 
sales works very well when you don't have a mill there. So you 
are going to have to combine the investment aspect of the 
situation with making the timber available in a more integrated 
way. When someone agrees to buy the timber, they also need an 
assurance of long-term supply. They need enough supply to be 
capable of building a mill. Or at least they need to know where 
they will send any purchased small-diameter timber to a mill. 
If they have to send it 250 miles away, they will not be 
willing to bid anything. But if a lot of policy changes are 
made, and a lot of these will be in the hands of Congress, to 
revise its timber sale policy and then the Forest Service 
implement them, I could certainly see $500 million a year or 
something like that in sale revenues. Again, this is a back-of-
the-envelope calculation.
    Mr. Herger. Let me try to clarify, if we can. So we are 
talking about not just spending hundreds of millions of 
dollars, of taxpayer dollars, to go out and thin out these 
small trees in the brush so as to make our forests more fire-
resistant, but we are actually talking about an industry, if it 
is done right, that we can actually produce dollars----
    Mr. Nelson. It can be a major new wood product industry.
    Mr. Herger [continuing]. For the economy and help open up 
some of these 42 mills that have closed in my area.
    Mr. Nelson. It is a win-win situation all the way around. 
It is environmentally beneficial, forestry beneficial, 
economically beneficial to the Treasury, and produces jobs and 
income for rural communities, some of which have suffered a 
lot. But the question is whether we can move fast enough.
    Mr. Herger. Before it all moves down.
    Mr. Nelson. And people all move away, and even the existing 
mills close, which I doubt right now. I don't think that under 
the existing system that it is capable of moving fast enough.
    Mr. Herger. Thank you very much.
    The Chairman said we were running out of time. I thought he 
was talking about the vote. But he was really referring to we 
are running out of time before the forests burn down before we 
do this. So it just emphasizes how important it is that we all 
work together, and I think this example that was set in Quincy, 
a small little town of a few hundred people in the Sierra 
Nevada Mountains maybe 60 miles north of Lake Tahoe where the 
environmentalists and the wood products people and everyone got 
together and worked out a plan, that this, I think, is an 
example of what we can do nationally to solve these very real 
problems we have of our forests completely burning down and 
having no environment left. So hopefully we can all work to do 
that again.
    Mr. Chairman, thank you very much.
    Chairman Radanovich. Thank you.
    Forgive me. We are just closing up our meeting before we 
have to go scamper off and go vote.
    Last I checked, every American runs into wood products 
every day of their lives, and I think it is a little 
disingenuous for us to have a national policy of a no-cut 
policy in the National Forest when it is a part of our daily 
lives and we are all consumers--even the most ardent 
environmentalist is a consumer--of wood products. As long as we 
can harvest and maintain forest health and a dynamic forest, I 
see nothing embarrassing about making a buck off of trees in 
our forests. I think that needs to be reiterated as we close 
this hearing.
    Mr. Hill, thank you.
    Mr. Phillips, good to see you again. Thank you for being 
here.
    Mr. Nelson, thank you for contributing to what I think is 
an excellent hearing.
    Thanks again, and we will adjourn the hearing.
    [Whereupon, at 4:05 p.m., the Task Force was adjourned.]