Department of Energy: External Regulation Savings in Safety and
Health Activities at DOE Science Laboratories (14-MAY-03,
GAO-03-633R).
The Department of Energy (DOE) is unusual among federal agencies
in that it regulates and inspects its own facilities to protect
the safety and health of its workers and of the communities
surrounding its vast complex of research laboratories. With few
exceptions, all other federal facilities must comply with
national standards set by the Nuclear Regulatory Commission (NRC)
for nuclear safety and by the Occupational Safety and Health
Administration (OSHA) for worker safety and health. DOE asserts
that, for the most part, its safety and health standards meet or
exceed those promulgated for facilities regulated by NRC and
OSHA. At DOE's 10 science laboratories, which are run by
management and operating (M&O) contractors, the department and
its contractors use a contract administration process to select
standards appropriate to current worker hazards and public safety
issues. Both DOE and the M&O contractors are involved in safety
and health activities. DOE's field offices, most of which are
located at the laboratories, provide continuous safety and health
oversight of the M&O contractors. DOE headquarters offices
provide policy guidance to the field offices and also conduct
some oversight of the laboratories. Safety and health personnel
working for the M&O contractors take actions to comply with the
safety and health standards and conduct their own self-assessment
activities. DOE's field offices track contract compliance through
direct observations and through the review of safety and health
reports and other related information provided by the M&O
contractors. Over a decade ago, DOE began considering whether to
end self-regulation of its facilities to improve safety and
public trust in the department, among other reasons. However,
after much study, the department concluded that the costs of
shifting to external regulation would exceed the potential
benefits of doing so. We have taken a position different from
DOE. For example, in a 2002 report, we observed that external
regulatory agencies' "greater independence, coupled with use of
national nuclear and worker safety standards and enforcement
powers, would make them more cost-effective regulators [than
DOE]." In addition, any resource savings to the department in
shifting to external regulation could potentially be redirected
to other mission priorities. The conference report accompanying
the Energy and Water Development Appropriations Act for fiscal
year 2002 directed DOE to prepare an implementation plan for
shifting the department's science laboratories to external
regulation. In July 2002, DOE presented a plan that was one month
late and lacked important information. A subsequent committee
report accompanying the 2003 appropriations bill criticized DOE
for providing the "grossly inadequate" plan. This report
concluded that DOE "cannot be relied upon to provide accurate and
objective information in response to Committee requests for
information on this issue." Congress therefore requested us to
determine (1) how much DOE spends on safety and health activities
at its science laboratories and (2) how much DOE might save after
shifting to external regulation of these facilities.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-633R
ACCNO: A06710
TITLE: Department of Energy: External Regulation Savings in
Safety and Health Activities at DOE Science Laboratories
DATE: 05/14/2003
SUBJECT: Federal regulations
Internal controls
Safety regulation
Self-regulatory organizations
Strategic planning
Occupational safety
******************************************************************
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GAO-03-633R
Page 1 GAO- 03- 633R External Regulation of DOE May 14, 2003 The Honorable
David L. Hobson Chairman
The Honorable Peter J. Visclosky Ranking Minority Member Subcommittee on
Energy and Water Development Committee on Appropriations House of
Representatives
Subject: Department of Energy: External Regulation Savings in Safety and
Health Activities at DOE Science Laboratories The Department of Energy
(DOE) is unusual among federal agencies in
that it regulates and inspects its own facilities to protect the safety
and health of its workers and of the communities surrounding its vast
complex of research laboratories. With few exceptions, all other federal
facilities must comply with national standards set by the Nuclear
Regulatory Commission (NRC) for nuclear safety and by the Occupational
Safety and Health Administration (OSHA) for worker safety and health.
DOE asserts that, for the most part, its safety and health standards meet
or exceed those promulgated for facilities regulated by NRC and OSHA. At
DOE*s 10 science laboratories, which are run by management and operating
(M& O) contractors, the department and its contractors use a contract
administration process to select standards appropriate to current worker
hazards and public safety issues. 1 Both DOE and the M& O contractors are
involved in safety and health
activities. 2 DOE*s field offices, most of which are located at the
laboratories, provide continuous safety and health oversight of the M& O
contractors. DOE headquarters offices provide policy guidance to the field
offices and also conduct some oversight of the laboratories. Safety and
1 These science laboratories are also known as nonmilitary energy
laboratories or nondefense science laboratories. 2 DOE and contractor
safety and health personnel are involved in emergency preparedness,
fire protection, industrial hygiene, industrial safety, occupational
medical services, nuclear safety, radiation safety, transportation safety,
and management of oversight and reporting on these safety and health
activities.
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 03- 633R External Regulation of DOE health personnel working
for the M& O contractors take actions to comply with the safety and health
standards and conduct their own
self- assessment activities. DOE*s field offices track contract compliance
through direct observations and through the review of safety and health
reports and other related information provided by the M& O contractors.
Over a decade ago, DOE began considering whether to end self- regulation
of its facilities to improve safety and public trust in the department,
among other reasons. However, after much study, the department concluded
that the costs of shifting to external regulation would exceed the
potential benefits of doing so. We have taken a position different from
DOE. For example, in a 2002 report, we observed that external regulatory
agencies* *greater independence, coupled with use of national nuclear and
worker safety standards and enforcement powers, would make them more cost-
effective regulators [than DOE].* 3 In addition, any resource savings to
the department in shifting to external regulation could potentially be
redirected to other mission priorities.
The conference report accompanying the Energy and Water Development
Appropriations Act for fiscal year 2002 directed DOE to prepare an
implementation plan for shifting the department*s science laboratories to
external regulation. 4 In July 2002, DOE presented a plan that was 1 month
late and lacked important information. A subsequent committee report
accompanying the 2003 appropriations bill criticized DOE for providing the
*grossly inadequate* plan. 5 This report concluded that DOE *cannot be
relied upon to provide accurate and objective information in response to
Committee requests for information on this issue.* You therefore requested
us to determine (1) how much DOE spends on safety and health activities at
its science laboratories and (2) how much DOE might save
after shifting to external regulation of these facilities. To address
these objectives, we substantially relied on data collection instruments
that we sent to DOE and M& O contractor officials associated with the 10
science laboratories. We briefed your offices on the results of our review
on March 28, 2003, using the enclosed slides. This is report summarizes
the results of that briefing.
3 U. S. General Accounting Office, Department of Energy: Observations on
Using External Agencies to Regulate Nuclear and Worker Safety in DOE*s
Science Laboratories, GAO- 02- 868R (Washington, D. C.: June 26, 2002). 4
H. R. Rep. No. 107- 258, October 30, 2001, at 109- 110.
5 H. R. Rep. No. 107- 681, September 24, 2002, at 133- 134.
Page 3 GAO- 03- 633R External Regulation of DOE In FY 2002, DOE spent
about $145 million on safety and health activities at its 10 science
laboratories, and we believe that this spending level has not
varied much during the last 4 years. This expenditure represented about 16
percent of all safety and health costs department wide. Virtually the
entire expenditure went to cover the more than 1,400 federal and M& O
contractor personnel involved in safety and health activities* about 95
percent of whom worked for the M& O contractors. The reported safety and
health costs do not include any maintenance costs, which are
accounted for separately. A shift to external regulation of the science
laboratories could decrease DOE*s annual safety and health costs by up to
about $41 million, or increase these costs up to about $5 million
depending on the level of continued department oversight of these
activities. Any potential savings in DOE safety and health costs, however,
would likely be applied to
reduce other costs associated with external regulation and would,
therefore, not produce immediate overall budgetary savings. Costs would be
incurred to bring the laboratories into compliance with national safety
and health standards and to supplement the staffs of the external agencies
to take on regulatory and inspection responsibilities for the numerous
facilities at each science laboratory. In addition, both DOE and the M& O
contractors might transfer safety and health personnel to other functional
areas in their respective organizations rather than eliminate these
positions to reduce overall operating costs. Further reductions in safety
and health costs might be possible through staff reductions at DOE
headquarters offices. However, these offices contend that personnel
reductions are unlikely because staff will still be needed to self-
regulate other facilities, such as the defense laboratories, and to
interact with the external regulators.
Any reduction in DOE safety and health costs after shifting to external
regulation would stem from DOE altering its approach to overseeing safety
and health activities. If DOE continues with its current oversight
approach
after regulatory authority shifts to NRC and OSHA, safety and health costs
could actually increase up to about $5 million annually. These additional
costs would result from DOE increasing its current safety and health
staffing levels to interact with the external regulatory agencies, and the
M& O contractors increasing their safety and health staffing levels to
respond to reporting requirements and information requests from both the
external regulators and DOE. We found that the DOE safety and health
oversight approach, which drives staffing levels, is substantially
reflected
in the number of contractually required safety and health reports and
frequent ad hoc information requests of the M& O contractors. Eliminating
Summary
Page 4 GAO- 03- 633R External Regulation of DOE redundant information
requests and oversight after shifting to external regulation could justify
a reduction in or redirection of safety and health
personnel that would lower safety and health costs. External regulation of
the science laboratories would provide a number of benefits. In a 2001
report, we found that eliminating DOE self- regulation of safety and
health activities and taking other actions would improve the
accountability of the department. 6 For a 2002 report, our examination of
federal and foreign laboratories comparable to DOE*s science laboratories
suggested that *external regulators can potentially oversee [the
laboratories] more efficiently and at less cost than DOE*s internal
staff.* 7 In a subsequent testimony, we concluded *the issue is not should
DOE shift to external regulation of its science laboratories, but how.* 8
Shifting to external regulation of the science laboratories will entail
federal government costs to bring the laboratories into compliance with
national standards and annual cost increases for the regulatory agencies.
Any potential reduction in safety and health costs within DOE and its M& O
contractors is expected to help offset these other costs. To ascertain the
greatest of these anticipated costs, the conference report on continuing
appropriations for FY 2003 directed NRC and OSHA to conduct compliance
audits of the 10 science laboratories, with funding support from DOE, and
to cooperate with the department in preparing cost estimates to bring the
laboratories into compliance with external regulations. 9 The final DOE
report is due no later than April 30, 2004.
According to DOE, the transition costs to external regulation could be
high, depending on the flexibility of the regulators in applying their
standards to the department*s unique facilities without compromising
safety. We have previously reported, however, that DOE would likely incur
many of these costs anyway if the department were to bring the
6 U. S. General Accounting Office, Department of Energy: Fundamental
Reassessment Needed to Address Major Mission, Structure, and
Accountability Problems, GAO- 02- 51 (Washington, D. C.: December 21,
2001).
7 GAO- 02- 868R. 8 Department of Energy, Observations on Externally
Regulating Nuclear and Worker Safety in DOE*s Science Laboratories, GAO-
02- 974T (Washington, D. C.: July 25, 2002).
9 H. R. Rep. No. 108- 10, February 12, 2003, at 898- 899. Background
Page 5 GAO- 03- 633R External Regulation of DOE laboratories into
compliance with DOE*s own safety and health standards. The annual costs
after transition are primarily associated with increasing
NRC and OSHA staffs to assume regulatory responsibilities for the science
laboratories. In a DOE implementation plan for external regulation
submitted to the Congress in July 2002, 10 these agencies anticipated they
would need an additional $6.9 million annually for this purpose. 11 In FY
2002, DOE spent $145.3 million on safety and health activities
associated with its 10 science laboratories. DOE data indicate that this
level of spending has not changed much in the previous 4 years. 12 This
expenditure represented about 16 percent of total department spending on
safety and health activities in FY 2002, compared to the 35 percent spent
at National Nuclear Security Administration sites and the 45 percent spent
at DOE environmental management sites. 13 The reported expenditure does
not include corrective maintenance for the repair of failed or
malfunctioning equipment.
Of the safety and health costs for the science laboratories, the portion
spent on DOE oversight was about $8.6 million. This $8.6 million covered
primarily the cost of the approximately 74 full- time equivalent (FTE)
employees involved in safety and health policy development and oversight
of the laboratories, most of whom (approximately 89 percent) were located
in field offices.
The M& O contractors, however, incurred the vast majority of the $145.3
million in safety and health costs. The cost of their safety and health
activities in FY 2002 was $136.7 million. For the most part, this
expenditure supported the nearly 1,334 FTEs involved in these activities,
comprising 3 to 9 percent of the laboratories* workforces. As reported to
us, expenditures on safety and health activities by the M& O contractors
represented about 3 percent of their total budgets. 10 Department of
Energy, Implementation Plan for External Regulation of Non- Defense
Science Laboratories. (Washington, DC: July 1, 2002). 11 The regulatory
agencies anticipate the need for an additional 24 full- time employees at
NRC and an additional 19 at OSHA. 12 Based on data obtained from DOE*s
Functional Cost Report of 30 Major DOE Contractor Sites, the variation in
safety and health costs since 1998 has been less than a 5 percent. 13 The
remaining small percentage of total safety and health costs went to
miscellaneous activities. DOE Spends About $145 Million Annually
on Safety and Health Activities
Page 6 GAO- 03- 633R External Regulation of DOE Table 1 summarizes the
safety and health FTE levels and costs for DOE and the M& O contractors
and compares these costs with overall budgets.
Table 1: Safety and Health FTEs and Costs in Fiscal Year 2002
Dollars in millions Location Safety and health FTEs Safety and
health costs Overall budget Percent of
budget
DOE field offices 65.3 $7.5 $137.5 5.4 DOE headquarters 8.5 1.1 98.3 1.1
M& O contractors 1,333.8 136.7 4,201.3 3.3
Total 1,407.6 $145.3 $4,437.2 a 3.3
Source: Figures for safety and health FTEs and costs were derived from
responses to data collection instruments sent to cognizant managers in
these organizations. The overall budget figure for the DOE headquarters
offices is based on their program direction funding in fiscal year 2002.
The budget figures for the DOE field offices affiliated with the 10
science laboratories and their M& O
contractors came from responses to our survey. a Total does not add up
because of rounding.
Up to about $41 million annually in DOE*s safety and health cost savings
might accrue after the department shifts to external regulation, depending
on the level of continued departmental oversight of safety and health
activities. However, if DOE does not alter its oversight approach,
especially through a reduction of contractual reporting requirements and
ad hoc information requests of the M& O contractors, shifting to external
regulation might require additional safety and health personnel,
potentially increasing annual DOE safety and health costs by up to about
$5 million.
Our data collection instruments included three scenarios that asked DOE
and M& O contractor safety and health managers how staffing levels might
change under various levels of DOE oversight after NRC and OSHA begin
regulating and inspecting the science laboratories. We developed a fourth
scenario to provide an independent assessment of potential safety and
health staff reductions for both DOE and its M& O contractors based on the
experiences of another federal agency and its science laboratory which is
already externally regulated. We selected the Jet Propulsion Laboratory,
owned by the National Aeronautics and Space Administration (NASA), as a
performance benchmark because DOE had already identified
it as a federally funded research and development center comparable to its
science laboratories. DOE has used the NASA interaction with the Jet
Propulsion Laboratory contractor to identify best management practices for
improving the overall efficiency and cost- effectiveness of its Annual
Safety and
Health Savings of Up to $41 Million Possible, Depending on Level of DOE
Oversight
Page 7 GAO- 03- 633R External Regulation of DOE laboratories. 14 The Jet
Propulsion Laboratory concentrates its research on unmanned space
operations, including solar system exploration, space and earth observing
systems, robotic technology for space exploration,
computational sciences for assimilation of large databases, and advanced
instrumentation. The laboratory contractor holds all safety and health
licenses with external regulators, and DOE considers this laboratory*s
safety levels to be similar to that of its Lawrence Berkeley National
Laboratory. In comparison to the Berkeley Lab and some other DOE science
laboratories, however, the Jet Propulsion Laboratory has a small
radioactive materials program, and it has no accelerator. On the other
hand, the laboratory has about 30 percent more employees (about 5,200
employees mostly at three sites in southern California) and over twice the
operating budget (about $1. 4 billion in fiscal year 2002) compared to the
largest DOE science laboratory. The four scenarios of DOE oversight are:
Scenario 1: DOE holds all applicable licenses and permits with external
regulators, eliminates the M& O contract requirements that duplicate those
of the external regulatory agencies, but retains its current approach to
contract performance oversight. Scenario 2: The same as the first
scenario, but the M& O contractor,
instead of DOE, holds any licenses and permits issued by external
regulatory agencies. Scenario 3: The same as the second scenario, but
DOE changes its
approach to contract performance oversight, relying instead on best
industry practices and norms for safety and health risk management.
Scenario 4: DOE adopts the safety and health management approach
used by NASA at its Jet Propulsion Laboratory. This approach is
essentially NASA*s application of scenario 3.
Table 2 provides estimated changes in annual safety and health costs under
the four scenarios for DOE oversight. The first scenario resulted in a
projected increase in safety and health costs, while the other scenarios
produced decreases in these costs through anticipated reductions in safety
and health FTEs. Any reduction in annual DOE safety and health costs,
however, might not produce overall budgetary savings, in part because the
external agencies would need to supplement their staffs to regulate and
inspect the science laboratories. In addition, there might not be
immediate
14 Berkeley Lab. DOE Best Practices Pilot Study, LBNL/ PUB- 865 (Berkeley,
CA: February 2002).
Page 8 GAO- 03- 633R External Regulation of DOE savings to DOE, given the
transition costs to bring the laboratories into compliance with national
safety and health regulations, irrespective of
their present conditions relative to DOE*s own standards. Further, both
DOE and the M& O contractors might transfer safety and health personnel to
other functional areas in their respective organizations rather than
eliminate these positions to reduce overall operating costs. Nevertheless,
any savings in DOE safety and health personnel costs might be transferred
to NRC and OSHA to help defray their increased costs, and reducing the
safety and health personnel now required to meet the significant
information needs of DOE might allow the M& O contractors to shift some of
these resources to more science mission work or to needed maintenance and
infrastructure upgrades.
Table 2: Estimated Savings in Annual Safety and Health Costs
Dollars in millions Location Scenario 1 Scenario 2 Scenario 3 Scenario 4
DOE field offices ($ 1.1 to $1.2) $0.2 $0.2 to $0.8 $5.9 M& O contractors
(2.9 to 4.0) 0.4 to 0.8 7.4 to 8.7 35.2
Total ($ 4.0 to $5.2) $0.6 to $0.9 a $7.6 to $9.5 $41.2 a
Source: Negative or positive savings estimates were derived from responses
to data collection instruments sent to cognizant managers in these
organizations. DOE headquarters offices indicated no staffing changes for
the first three scenarios and we did not estimate them in the fourth
scenario.
Note: Dollar values were derived by multiplying the number of FTEs (either
projected safety and health position increases in scenario 1, or position
decreases in the other scenarios) by the average cost of an FTE as
reported for each location. a Totals do not add up because of rounding.
Projected changes in safety and health costs for the first three scenarios
were derived from responses to our survey of DOE field offices and M& O
contractors. Headquarters offices did not project any staffing changes
under the first three scenarios. For scenario 4, we calculated changes in
DOE*s field staff by applying NASA*s safety and health staffing approach
(i. e., reducing safety and health field FTEs to one per laboratory). In
calculating potential changes for M& O contractor staff, we determined
that the Jet Propulsion Laboratory*s safety and health staffing levels
were about 28 percent less than at DOE*s Lawrence Berkeley National
Laboratory, even after DOE had adjusted staffing figures downward to
account for differences in personnel functions at the two laboratories. 15
15 In the DOE Best Practices Pilot Study report, DOE adjusted the safety
and health
staffing figure downward from 150 to 41 at the Berkeley Lab and from 50 to
40 at Jet Propulsion Laboratory.
Page 9 GAO- 03- 633R External Regulation of DOE For example, DOE excluded
its own safety and health personnel involved in radiation safety and
environmental radiation monitoring, health
services, and fire protection because it was determined that these
functions were not performed by the safety and health personnel at the Jet
Propulsion Laboratory. We then applied the 28 percent reduction to each of
the 10 DOE science laboratories to estimate potential savings, although
the potential for this reduction would vary among the laboratories,
depending on the circumstances presented. We did not calculate any staff
changes for DOE headquarters.
Implementing scenario 4 could potentially provide the greatest savings to
offset the transition costs and the annual cost increases anticipated for
additional NRC and OSHA personnel under external regulation. Implementing
this scenario, however, would also require the most dramatic changes in
DOE*s oversight culture, particularly in contract administration and the
responsibilities placed on safety and health personnel. Our analysis
suggests that, to a large extent, the safety and health staffing levels
across DOE field offices and the M& O contractors are driven by the need
to monitor and respond to the numerous safety and health contractual
reporting requirements and ad hoc information requests. Eliminating
unnecessary information requests after shifting to external regulation
could justify a reduction or redirection of safety and health personnel
that would lower safety and health costs.
DOE has recognized the need to fundamentally change its contract
administration process to improve contractor efficiency and effectiveness
and to enhance accountability. In April 2002, DOE formulated principles to
guide the development of pending contracts with three science
laboratories. 16 The management practices at NASA*s Jet Propulsion
Laboratory were used to support these principles. One of the principles
calls for reliance on national standards to establish contractor
requirements and performance criteria, while minimizing the use of DOE
orders and directives that place administrative and operational
requirements on the contractor. Applying this principle alone, in
conjunction with adopting external regulation, would help to move DOE
toward the potential safety and health savings projected in scenario 4.
16 Memorandum for Heads of Departmental Elements, the Under Secretary of
Energy, Robert G. Card, Principles for Office of Science Laboratory
Contracts, Department of Energy: April 30, 2002.
Page 10 GAO- 03- 633R External Regulation of DOE We provided a draft of
this report to DOE for its review and comments. Written comments are
presented and evaluated below and are reprinted in
enclosure II. In commenting on our report, the Deputy Secretary of Energy
expressed several concerns about our analysis and the need to shift to
external regulation. For example, DOE commented that because our cost
estimates were not independently verified, they are not *decision- quality
information.* Other comments pertained to our estimates of department
savings in safety and health costs after shifting to external regulation
of the science laboratories. For example, DOE questioned our calculation
of potential reductions in safety and health costs and the level of
information necessary to monitor these activities. Finally, DOE raised
some concerns about transition costs and other potential costs associated
with shifting to
external regulation. While we agree that our assessment of safety and
health costs for the department was hindered by limitations in the
availability of budget quality data, our method of estimating these costs
was reasonable. Further, given the uncertainties about future roles,
responsibilities and interactions among DOE and its M& O contractor safety
and health personnel after shifting to external regulation, providing a
range of savings estimates based on a combination of survey responses from
the individuals responsible for these activities and our own calculations,
make us confident that our assessment is independent and credible.
Finally, while we were not asked to assess the transition costs and other
potential costs and benefits of shifting to external regulation in this
report, we have discussed these issues in previous reports. At this point,
with the analysis undertaken on this issue over the years, it seems to us
that philosophical opposition rather than data limitations is the main
stumbling block to the department*s shift to external regulation. Our
specific comments to each of the concerns raised by DOE are in enclosure
II. To obtain information on the cost of safety and health activities and
on the
potential for reductions under different DOE oversight scenarios, we
relied for the most part on data collection instruments that we sent to
DOE and M& O contractor officials associated with the 10 science
laboratories. We also visited NASA*s Jet Propulsion Laboratory, a
federally funded research and development center that we selected because
it is comparable to DOE*s science laboratories and because the department
has already used it as a performance benchmark. In addition, we obtained
safety and health cost data from centralized data systems to compare with
our survey data. We did not independently verify the accuracy of the
selfreported data, nor did we undertake an independent study of the
current and proposed safety and health staffing levels for DOE and its
contractors, Agency Comments
Scope and Methodology
Page 11 GAO- 03- 633R External Regulation of DOE or of the proposed
additions to NRC and OSHA staffs. We did, however, compare responses among
the laboratories and follow up with
respondents when necessary. We also encouraged narrative explanations of
the responses. To obtain additional information, we spoke with DOE
headquarters and field office officials. We conducted our work between
August 2002 and March 2003 in accordance with generally accepted
government auditing standards.
As agreed with your offices, we will make copies of this report available
to others upon request. In addition, the report will be available at no
charge on the GAO Web site at http:// www. gao. gov. If you or your staff
have any questions about this report, please contact me at (202) 512- 3841
or Dan Feehan, Assistant Director, at (303) 572- 7352. Major contributors
to this report include Joel Grossman, Thomas Laetz, Mehrzad Nadji, Cynthia
Norris and Michael Sagalow.
Robin Nazzaro Director, Natural Resources
and Environment Enclosure
Enclosure I: Briefing Slides Page 12 GAO- 03- 633R External Regulation of
DOE Enclosure I: Briefing Slides
Enclosure I: Briefing Slides Page 13 GAO- 03- 633R External Regulation of
DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
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DOE
Enclosure I: Briefing Slides Page 30 GAO- 03- 633R External Regulation of
DOE
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DOE
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DOE
Enclosure I: Briefing Slides Page 33 GAO- 03- 633R External Regulation of
DOE
Enclosure I: Briefing Slides Page 34 GAO- 03- 633R External Regulation of
DOE
Enclosure II: Comments from the Department of Energy Page 35 GAO- 03- 633R
External Regulation of DOE Enclosure II: Comments from the Department of
Energy
Note: GAO comments appear at the end of this appendix.
Enclosure II: Comments from the Department of Energy Page 36 GAO- 03- 633R
External Regulation of DOE
Enclosure II: Comments from the Department of Energy Page 37 GAO- 03- 633R
External Regulation of DOE
Enclosure II: Comments from the Department of Energy Page 38 GAO- 03- 633R
External Regulation of DOE
Enclosure II: Comments from the Department of Energy Page 39 GAO- 03- 633R
External Regulation of DOE
Enclosure II: Comments from the Department of Energy Page 40 GAO- 03- 633R
External Regulation of DOE The following are GAO*s comments on the
Department of Energy*s letter dated April 28, 2003. The number associated
with each of our comments corresponds to the numbered DOE statement in
this enclosure.
1. We agree that any reductions in safety and health costs under the first
three oversight scenarios would at best offset anticipated increases in
staffing at NRC and OSHA. However, we disagree that these estimates are
questionable. Our estimates were derived directly from survey responses
provided to us by DOE and M& O contactor safety and health managers who
are in the best position to provide these data. The fourth scenario, which
did not rely on survey responses conditioned by DOE*s oversight culture,
yielded much higher potential reductions in safety and health costs. These
savings would go well beyond offsetting increases in NRC and OSHA costs,
but only if they are not shifted to other functional areas of the
department and its M& O contractors.
2. We agree with the two propositions extracted by DOE from our report
that are behind the potential savings of up to $41 million calculated in
scenario 4. We believe that these propositions are reinforced by DOE*s
current policy guidance for developing new science laboratory contracts.
This guidance underscores the use of national standards to establish
contractor requirements and performance criteria, while minimizing the use
of DOE orders and directives as mechanisms for placing administrative and
operational requirements on the contractors.
3. We agree that our report did not include any specific examples of
*unnecessary* DOE reporting requirements. However, we disagree that there
was no analysis to support our claim that these requirements and ad hoc
information requests drive the apparent high levels of safety and health
staffing. We compared the number of information requests from NASA to its
Jet Propulsion Laboratory with those from DOE to its 10 science
laboratories. The Jet Propulsion Laboratory had significantly fewer
information requests than the DOE laboratories because NASA essentially
relies on the information requested by external regulators, and their
oversight, as well as the Jet Propulsion Laboratory*s self- assessments
for safety assurances. If this laboratory*s total information demand
equaled the information requested of DOE*s M& O contractors, one would
expect that the number of staff necessary to respond to these requests
would be similar. However, the Jet Propulsion Laboratory and the NASA
Management Office at this laboratory have far fewer safety and health
personnel as a proportion of their workforces than at a comparable DOE
science laboratory and its associated field offices. GAO Comments
Enclosure II: Comments from the Department of Energy Page 41 GAO- 03- 633R
External Regulation of DOE 4. DOE*s concern that three entities (DOE, NRC,
and OSHA) will each request information under external regulation gets at
a root concern expressed by most of the M& O contractors that the
department will not fundamentally alter its oversight approach even with
the presence of external regulators. Scenario 4 shows that the Jet
Propulsion Laboratory is able to respond to the information requests of
its external regulators and NASA overseers with 28 percent fewer safety
and health personnel than a comparable DOE science laboratory, even after
significantly reducing the number of pertinent DOE laboratory personnel
(i. e., from 150 to 41) to account for differences in the types of hazards
overseen in the respective laboratories. And, as reported by DOE, the Jet
Propulsion Laboratory does this while maintaining comparable levels of
safety to its Lawrence Berkeley National Laboratory.
5. We agree that DOE can address to some extent the issue of *unnecessary*
information requests under existing self- regulation. However, we disagree
that shifting to external regulation is *far from the most plausible
mechanism through which unnecessary information requests may be
eliminated.* (See response to comment 6.)
6. We disagree that shifting to external regulation will make it harder
rather than easier to eliminate unnecessary information requests. Shifting
to external regulation should help clarify what DOE reporting requirements
and other information requests are duplicative of the information needs of
external regulators. Applying a NASA- type oversight approach will also
help uncover those
administrative mechanisms to ensure a safe and healthy work environment
that are unnecessary given the presence of external regulators.
7. We pointed out in our report that the potential for a 28 percent
reduction in safety and health personnel would vary among the
laboratories, depending on the circumstances presented. That is, for some
laboratories a higher percent reduction in M& O contractor safety and
health personnel might be achieved, and for other laboratories a lower
percent reduction would be possible. Applying this percentage to reduce
safety and health costs across the 10 laboratories is actually more
conservative than the 30 percent reduction in costs estimated by DOE*s
major M& O contractors in one of our previous reports. We were told that
this latter estimate is only achievable if DOE relinquishes its oversight
to external regulators. It also takes into consideration the Oak Ridge
National Laboratory, which would likely have the greatest regulatory
presence of NRC under external regulation.
8. We agree that safety and health cost information is based primarily on
responses to our data collection instruments. We relied on survey data
because DOE does not have budget quality information on safety and health
costs. We disagree with DOE that our cost information does not represent
decision- quality information; given the steps we took to determine the
reasonableness of the data, including
Enclosure II: Comments from the Department of Energy Page 42 GAO- 03- 633R
External Regulation of DOE making cost adjustments where necessary based
on follow- up conversations with respondents. 9. We agree that it would be
difficult to determine how much of the transition costs
to bring the laboratories into compliance with NRC and OSHA standards
could be attributable to upgrading these laboratories to meet DOE*s own
standards. DOE stated that there was no basis for assuming that much of
the transition costs would be needed to meet the department*s own
standards and that any such determination could not be verified. DOE also
contends that its safety and health standards meet or exceed those of NRC
and OSHA, but that it achieves acceptable levels of safety by means other
than those that would be imposed under external
regulation. We acknowledge that the full cost of transitioning to external
regulation cannot be ascertained until the completion of comprehensive
compliance audits involving DOE, NRC, and OSHA for the 10 science
laboratories. However, based on previously reported information, we
believe that some of the transition costs will be associated with
complying with DOE*s own regulations. DOE even stated in its
Implementation Plan for External Regulation of the NonDefense Science
Laboratories that some of the transition costs would be necessary to cover
the backlog of preventive facility maintenance that presumably are in
noncompliance with its own standards.
10. A review of DOE*s Integrated Safety Management System was beyond the
scope of our report. We note, however, that officials at the Jet
Propulsion Laboratory told us that they also have an established
integrated safety management system operating within the context of
external regulation. We believe that the
reasonable application of regulations to reflect activities and hazards
associated with a particular work environment is appropriate and not
automatically eliminated with external regulation, as seen at the Jet
Propulsion Laboratory. We have also reported that NRC claims it would be
flexible in applying its standards to DOE*s unique facilities without
compromising safety, and OSHA has concluded that any deficiencies
identified at the laboratories would be similar to levels found in the
private sector and, therefore, manageable. 11. We agree that
characterizing the laboratories under the stewardship of DOE*s
Office of Science as military or nonmilitary does not fully capture the
scope of research taking place at them. However, we provided the
questioned footnote to clarify for some readers that the science
laboratories have been referred to in other ways. For example, the current
version of H. R. 6 * The Energy Policy Act of 2003, uses the phrase
*nonmilitary energy laboratories.* However, because DOE has itself
referred to the science laboratories as *nondefense* science laboratories
in its implementation plan for external regulation, we have further
clarified the footnote by adding *nondefense science* laboratories.
12. We did not perform a cost benefit analysis of shifting to external
regulation of the science laboratories in this report, and we still
question the need to do so. As we
Enclosure II: Comments from the Department of Energy Page 43 GAO- 03- 633R
External Regulation of DOE previously reported, in our view *DOE has
sufficient information and has had ample time to move forward on external
regulation.* At this point, it appears to us that philosophical opposition
rather than data limitations is the principal impediment to a shift to
external regulation. Besides, while some costs and
potential beneficial savings are reasonably quantifiable, others are not.
For example, attempting to quantify the cost of any potential decrease in
our national security by shifting to external regulation would be as
difficult as trying to quantify the benefits of increased public trust in
DOE that might be gained by eliminating self- regulation of safety and
health functions. As to national security concerns, we would add that we
previously reported that officials at comparable foreign defense and
nondefense laboratories, all of which accept the presence of external
regulators, indicated that they do not share DOE*s concern that external
regulation poses a threat to their national security. In addition, our
present report identifies at least one oversight scenario that might yield
significant savings in safety and health costs that could potentially help
support additional research to enhance our national security.
(360257)
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