Human Capital: Retirements and Anticipated New Reactor		 
Applications Will Challenge NRC's Workforce (17-JAN-07, 	 
GAO-07-105).							 
                                                                 
The Nuclear Regulatory Commission (NRC) is responsible for	 
licensing and inspecting the nation's nuclear power plants to	 
ensure their safety and security. By 2010, about one third of	 
NRC's workforce with mission-critical skills will be eligible to 
retire. At the same time, NRC's workforce needs to expand because
NRC expects to receive at least 20 applications for 29 new	 
nuclear power reactors beginning in October 2007. GAO assessed	 
NRC's ability to meet its workforce needs by examining the extent
to which NRC (1) has aligned its human capital planning framework
with its strategic mission and programmatic goals; (2) is	 
effectively recruiting, developing, and retaining critically	 
skilled personnel; and (3) is addressing future uncertainties	 
that could affect its overall workforce capacity. GAO examined	 
strategic workforce planning and implementation documents,	 
interviewed cognizant managers on NRC's human capital framework  
and activities, and surveyed these managers about NRC's human	 
capital flexibilities and measures.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-105 					        
    ACCNO:   A64944						        
  TITLE:     Human Capital: Retirements and Anticipated New Reactor   
Applications Will Challenge NRC's Workforce			 
     DATE:   01/17/2007 
  SUBJECT:   Federal employees					 
	     Hiring policies					 
	     Human capital					 
	     Inspection 					 
	     Nuclear powerplant safety				 
	     Older workers					 
	     Program evaluation 				 
	     Retirement age					 
	     Skilled labor					 
	     Strategic planning 				 
	     Nuclear powerplants				 
	     Agency missions					 
	     Human capital management				 
	     Human capital policies				 
	     Policy evaluation					 
	     Regulatory agencies				 
	     Program goals or objectives			 

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GAO-07-105

   

     * [1]HUMAN CAPITAL
     * [2]Retirements and Anticipated New Reactor Applications Will Ch

          * [3]Highlights
          * [4]Contents

               * [5]Results in Brief
               * [6]Background
               * [7]NRC's Human Capital Planning Framework Is Aligned with
                 Its S

                    * [8]NRC's Strategic Human Capital Planning Framework Is
                      Coherent
                    * [9]Some Key Human Capital Planning and Implementation
                      Efforts A

               * [10]NRC Has Generally Been Effective in Recruiting,
                 Developing,

                    * [11]NRC's Management Is Significantly Engaged in
                      Establishing, C
                    * [12]NRC Analyzes Its Mission Priorities and Workforce
                      Capacity t
                    * [13]NRC Primarily Uses Recruiting, Hiring, Training,
                      and Develop

                         * [14]NRC Significantly Increased Its Recruiting and
                           Hiring Effort
                         * [15]NRC Has Many Training and Development Programs
                           in Place and
                         * [16]NRC's Use of Tools, Authorities, and
                           Flexibilities to Retain

                    * [17]Some Enhancements of NRC's Infrastructure to
                      Support Adminis
                    * [18]Although NRC Uses Several Human Capital Measures,
                      Some Do No

               * [19]NRC Is Taking Steps to Address Future Uncertainties That
                 Cou

                    * [20]NRC Has Taken Steps to Address Broader Challenges
                      It Faces i
                    * [21]NRC Has Taken Several Steps to Prepare for New
                      Reactor Licen

               * [22]Conclusions
               * [23]Recommendations for Executive Action
               * [24]Agency Comments

          * [25]Letter
          * [26]Appendix I: NRC's Changing Workforce Demographics
          * [27]Appendix II: Scope and Methodology
          * [28]Appendix III: New Reactor Licensing

               * [29]Design Certifications
               * [30]Combined Licenses

          * [31]Appendix IV: Time Line of NRC's Workforce Reorganizations
          * [32]Appendix V: NRC's Use of Human Capital Flexibilities, Author
          * [33]Appendix VI: Comments from the Nuclear Regulatory Commission
          * [34]Appendix VII: GAO Contact and Staff Acknowledgments

               * [35]GAO Contact
               * [36]Staff Acknowledgments

          * [37]Related GAO Reports

               * [38]Nuclear Regulatory Commission

                    * [39]Strategic Workforce Planning and Human Capital
                      Management
                    * [40]Order by Mail or Phone

Report to the Subcommittee on Oversight of Government Management, the
Federal Workforce, and the District of Columbia, Committee on Homeland
Security and Governmental Affairs, U.S. Senate

United States Government Accountability Office

GAO

January 2007

HUMAN CAPITAL

Retirements and Anticipated New Reactor Applications Will Challenge NRC's
Workforce

GAO-07-105

Contents

Letter 1

Results in Brief 5
Background 8
NRC's Human Capital Planning Framework Is Aligned with Its Strategic
Mission and Programmatic Goals, but Some Further Actions Are Required 11
NRC Has Generally Been Effective in Recruiting, Developing, and Retaining
Critically Skilled Employees, yet Many Activities Were Only Recently
Initiated 16
NRC Is Taking Steps to Address Future Uncertainties That Could Adversely
Affect Its Overall Workforce Capacity 36
Conclusions 43
Recommendations for Executive Action 44
Agency Comments 44
Appendix I NRC's Changing Workforce Demographics 46
Appendix II Scope and Methodology 49
Appendix III New Reactor Licensing 52
Design Certifications 53
Combined Licenses 54
Appendix IV Time Line of NRC's Workforce Reorganizations 56
Appendix V NRC's Use of Human Capital Flexibilities, Authorities, Tools,
and Programs 58
Appendix VI Comments from the Nuclear Regulatory Commission 64
Appendix VII GAO Contact and Staff Acknowledgments 66
Related GAO Reports 67

Tables

Table 1: GAO's Strategic Workforce Planning Principles and Descriptions 4
Table 2: Comparison of Selected NRC Workforce Demographics, Fiscal Years
2002 through 2006 46
Table 3: Percentage of the NRC Workforce that Is Eligible to Retire,
Fiscal Years 2002 through 2011 48
Table 4: Employees Who Left NRC, Fiscal Years 2002 through 2006 48
Table 5: Status of Reactor Design Certification, December 2006 53
Table 6: NRC Managers' Assessment of the Use of Human Capital
Flexibilities, Authorities, Tools, and Programs 58

Figures

Figure 1: NRC's Strategic Human Capital Planning and Implementation
Framework 12
Figure 2: Twenty Potential COL Applications, as of December 2006 55

Abbreviations

ABWR Advanced Boiling Water Reactor
CDMP Comprehensive Diversity Management Plan
COL combined license
DCRA design-centered review approach
DOE Department of Energy
EPR Evolutionary Pressurized Water Reactor
ESBWR Economic Simplified, Boiling Water Reactor
FTE full-time equivalent
IG Inspector General
NEI Nuclear Energy Institute
NRC Nuclear Regulatory Commission
NRR Nuclear Reactor Regulation
NSIR Nuclear Security and Incident Response
NTEU National Treasury Employees Union
OHR Office of Human Resources
OPM Office of Personnel Management
SES Senior Executive Service
SWP strategic workforce planning

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separately.

United States Government Accountability Office

Washington, DC 20548

January 17, 2007 January 17, 2007

The Honorable Daniel K. Akaka
Chairman
The Honorable George V. Voinovich
Ranking Minority Member
Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia 
Committee on Homeland Security and Governmental Affairs
United States Senate

The Nuclear Regulatory Commission (NRC) licenses and regulates civilian
uses of nuclear materials to protect public health, safety, and the
environment and promote the common defense and security. In particular,
NRC is responsible for overseeing the electric power industry's 103
operating nuclear reactors that generate about 20 percent of the nation's
electricity by inspecting their operations and reviewing license
applications to, for example, extend reactors' operating lives. Since
October 2005, many electric power companies have announced their intent to
apply to NRC for licenses to build and operate at least 29 new nuclear
power reactors, with project costs estimated to range from $1.5 billion to
$4 billion. NRC expects to receive 8 applications by December 2007, 10
more applications by October 2008, and 2 additional applications by the
end of September 2009--the first applications for construction licenses
since the 1979 accident at the Three Mile Island nuclear power plant near
Harrisburg, Pennsylvania. In addition, NRC is responsible for regulating
the Department of Energy's (DOE) nuclear waste repository at Yucca
Mountain near Las Vegas, Nevada, as well as medical, educational, and
other uses of nuclear materials. The Nuclear Regulatory Commission (NRC)
licenses and regulates civilian uses of nuclear materials to protect
public health, safety, and the environment and promote the common defense
and security. In particular, NRC is responsible for overseeing the
electric power industry's 103 operating nuclear reactors that generate
about 20 percent of the nation's electricity by inspecting their
operations and reviewing license applications to, for example, extend
reactors' operating lives. Since October 2005, many electric power
companies have announced their intent to apply to NRC for licenses to
build and operate at least 29 new nuclear power reactors, with project
costs estimated to range from $1.5 billion to $4 billion. NRC expects to
receive 8 applications by December 2007, 10 more applications by October
2008, and 2 additional applications by the end of September 2009--the
first applications for construction licenses since the 1979 accident at
the Three Mile Island nuclear power plant near Harrisburg, Pennsylvania.
In addition, NRC is responsible for regulating the Department of Energy's
(DOE) nuclear waste repository at Yucca Mountain near Las Vegas, Nevada,
as well as medical, educational, and other uses of nuclear materials.

Congress appropriated about $735 million for NRC's activities in fiscal
year 2006. By law, NRC is required to recover about 90 percent of its
budget authority each fiscal year, less certain specified amounts, through
the fees it charges licensees and applicants. For fiscal year 2007, the
Continuing Appropriations Resolution, 2007, would limit NRC's
appropriation to the fiscal year 2006 level, and Congressional leaders
have announced their intent to extend the Continuing Resolution for the
full fiscal year, with few exceptions. In its comments on a draft of this
report, NRC states that the funding in the Continuing Resolution would
result in a $95 million reduction in funding compared with the amount that
the full House of Representatives and the Senate Committee on
Appropriations Congress appropriated about $735 million for NRC's
activities in fiscal year 2006. By law, NRC is required to recover about
90 percent of its budget authority each fiscal year, less certain
specified amounts, through the fees it charges licensees and applicants.
For fiscal year 2007, the Continuing Appropriations Resolution, 2007,
would limit NRC's appropriation to the fiscal year 2006 level, and
Congressional leaders have announced their intent to extend the Continuing
Resolution for the full fiscal year, with few exceptions. In its comments
on a draft of this report, NRC states that the funding in the Continuing
Resolution would result in a $95 million reduction in funding compared
with the amount that the full House of Representatives and the Senate
Committee on Appropriations had approved for fiscal year 2007. According
to NRC, the agency has begun to feel the impact of the Continuing
Resolution's restrictions on funding and full-time equivalent positions.
NRC believes that these restrictions, if extended for a protracted period,
will seriously imperil its ability to meet its human capital goals and
will significantly delay its preparedness to review applications for new
nuclear power reactors. NRC cites as an example that the agency would
significantly curtail, and possibly cease, its fiscal year 2007 new
hiring, except for those already given offers and those necessary for the
most critical of skills. NRC also believes that the effects will cascade
into future years.

To fulfill its regulatory mission and help sustain public confidence in
the safety of nuclear power, NRC needs a critically skilled workforce of
scientists, engineers, and other employees with specialized knowledge,
skills, and technical expertise. However, NRC expects that the
demographics of its workforce will significantly change in the next few
years, primarily because of two factors. NRC estimates that the percentage
of employees eligible to retire will grow from the current level of about
16 percent to about 33 percent of the workforce in fiscal year 2010. (See
app. I for demographics data on NRC's workforce.) Nuclear power plant
owners and NRC have expressed concerns about their ability to even
maintain their workforces at current levels to ensure the safety of
existing plant operations and the rigor of inspections as workers retire
and reactors age. Furthermore, at the same time, NRC projects that its
workforce size will need to grow from about 3,100 employees in early
fiscal year 2006 to nearly 4,000 employees by 2010 to meet the significant
anticipated upsurge in workload demands as NRC begins to review power
company applications for permits to construct and operate new nuclear
reactors. To replace retiring employees and expand its workforce, NRC must
hire from 300 to 400 employees per year through at least 2010.

In August 2004, NRC issued its Strategic Plan, Fiscal Year 2004-Fiscal
Year 2009, which identifies the agency's vision; mission; values; and five
goals--safety, security, openness, effectiveness, and excellence in agency
management--shaping its activities through 2009. The strategic plan states
that one of NRC's greatest management challenges will be to acquire,
develop, and sustain a highly skilled and diverse technical workforce.
Similarly, during the past 6 years, NRC's Inspector General (IG) has
identified human capital management as a key challenge. To address these
concerns, NRC developed the 2004-2009 Strategic Human Capital and
Workforce Restructuring Plan (2004 strategic human capital plan), which
presents strategies to ensure that the agency can recruit, develop, and
retain the critically skilled workforce it needs.^1 In recent years, NRC
was identified as the federal government's third-best organization to work
through an analysis of the Office of Personnel Management's (OPM) 2004
Federal Human Capital Survey data,^2 and NRC improved its performance in
16 of 18 categories measured by its own 2005 Safety Culture and Climate
Survey (NRC's 2005 employee survey) categories.

Our December 2003 report on effective strategic workforce planning
identified two critical elements: (1) aligning an organization's human
capital program with its current and emerging mission and programmatic
goals and (2) developing long-term strategies for acquiring, developing,
and retaining staff to achieve program goals.^3 The first element involves
linking human capital management strategies with agency mission, goals,
and organizational objectives and integrating these strategies into its
strategic plans, performance and accountability plans, and budget
requests. The second element involves undertaking workforce planning
activities to implement acquisition, development, and retention programs.
Strategic workforce planning involves systematic assessments of current
and future human capital needs and the development of long-term strategies
to fill any gaps. Our previous work suggests that, regardless of an
agency's mission, needs, and approach, strategic workforce planning should
incorporate the five key principles shown in table 1.

^1Recruiting, developing, and retaining activities include (1)
identifying, recruiting, and hiring new personnel; (2) staffing,
developing, and training new and existing personnel; and (3) transferring
or managing the knowledge for, and retaining sufficient numbers of,
critically skilled personnel.

^2The Partnership for Public Service and American University's Institute
for the Study of Public Policy Implementation conducted the 2004 study.

^3GAO, Human Capital: Key Principles for Effective Strategic Workforce
Planning, [41]GAO-04-39 (Washington, D.C.: Dec. 11, 2003); and OPM, Human
Capital Assessment and Accountability Framework (Washington, D.C.: 2006).

Table 1: GAO's Strategic Workforce Planning Principles and Descriptions

Principle                         Description                              
Involve top management,           Agencies' top program and human capital  
employees, and other stakeholders leaders set the overall direction, pace, 
in developing, communicating, and tone, and goals and involve employees    
implementing the strategic        and stakeholders in establishing a       
workforce plan.                   communication strategy that creates      
                                     shared expectations for the outcomes of  
                                     the process.                             
Determine the critical skills and Agencies determine how many personnel    
competencies that will be needed  have the skills and competencies needed  
to achieve future programmatic    to meet program goals and how many are   
results.                          likely to remain with the agency over    
                                     time, given retirement and other         
                                     attrition. Such analysis allows agencies 
                                     to identify the resources needed to      
                                     achieve current and future goals.        
Develop strategies that are       Agencies use strategies, including       
tailored to address gaps and      programs, policies, and practices, to    
human capital conditions in       address how the workforce is acquired,   
critical skills and competencies  developed and trained, compensated;      
that need attention.              deployed; motivated; and retained. Such  
                                     strategies help an agency move from the  
                                     current to the future workforce.         
Build the capability needed to    Agencies educate managers and employees  
address administrative,           about available human capital            
educational, and other            flexibilities so that the flexibilities  
requirements important to support are implemented openly, fairly, and      
workforce strategies.             effectively.                             
Monitor and evaluate the agency's Agencies use periodic measurement and    
progress toward its human capital evaluation to obtain data for            
goals and the contribution that   identifying shortfalls and revising      
human capital results have made   future workforce planning efforts.       
toward achieving programmatic     Gathering this information helps ensure  
goals.                            that human capital strategies work as    
                                     intended.                                

Source: GAO.

Given the anticipated increase in NRC's future workload, we assessed NRC's
ability to sufficiently recruit, develop, and retain the staff it needs to
inspect the operations of existing nuclear power plants, review the
license applications for constructing new reactors, and perform other
regulatory functions. Specifically, we examined the extent to which NRC
(1) has aligned its human capital planning framework with its strategic
mission and programmatic goals; (2) is effectively recruiting, developing,
and retaining critically skilled personnel; and (3) is taking steps to
address future uncertainties that could affect its overall workforce
capacity.

To assess the alignment of NRC's human capital framework with its
strategic mission and programmatic goals, we analyzed a broad range of
NRC's policy, planning, and implementation documents; reviewed budget
documents and performance and accountability reports; and interviewed
cognizant managers in NRC's Office of Human Resources (OHR), program
offices--including Nuclear Reactor Regulation (NRR), and four regional
offices. To assess NRC's efforts to recruit, develop, and retain
critically skilled personnel, we applied our five strategic workforce
planning principles. In doing so, we analyzed NRC's (1) demographics data;
(2) critical skills information; (3) implementation of its recruiting,
hiring, training and development, and retention strategies; (4)
implementation of new systems, programs, and processes that support human
capital management and planning; and (5) measures of its progress and
results. We also surveyed 45 NRC managers in OHR, NRR and other program
offices, and four regional offices about the use of existing human capital
flexibilities, authorities, tools, and programs; our response rate was 71
percent. To assess the extent to which NRC has addressed future
uncertainties that could adversely affect its overall workforce capacity,
we examined the engineering, science, and technology labor pool and NRC's
efforts to prepare for a surge in new reactor license applications.
Specifically, we interviewed NRC managers and Nuclear Energy Institute
(NEI) executives about the supply and demand for critically skilled
workers, examined NRC's efforts to develop a "pipeline" for recruiting
these personnel, and assessed its need for any new flexibilities and
authorities. (See app. II for additional information about our scope and
methodology.) We conducted our work from March through December 2006 in
accordance with generally accepted government auditing standards.

Results in Brief

NRC's human capital planning framework is generally aligned with its
strategic outcomes and goals. NRC's strategic plan and associated plans
coherently outline its human capital goals, strategies, performance
measures, and activities, and these elements are linked to NRC's strategic
outcomes: (1) continuous improvement in NRC's leadership and management
effectiveness in delivering the mission and (2) a diverse, skilled
workforce and an infrastructure that fully supports the agency's mission
and goals. Although its framework is generally sound, NRC has not fully
implemented three key plans that would facilitate the recruitment and
development of employees who its offices need to maintain agency expertise
and to respond to anticipated growth in applications for reactor licenses
in the next few years. For example, NRC's 2004 strategic human capital
plan called for annual agencywide human capital implementation plans
beginning in October 2005 that would link NRC strategies to its offices'
tactical planning for accomplishing yearly goals. However, NRC has drafted
but has not completed its first annual implementation plan, in part
because of competing human capital demands particularly the need to
achieve its sharply increased hiring targets. Without the plan, NRC
managers face increased complexity and difficulty in managing activities
to recruit and develop the critically skilled employees they will need.
Similarly, although NRC recently completed two agencywide strategic
documents for knowledge management and training and development, it
remains to be seen whether NRC managers' implementation of these
initiatives will stimulate, for example, the rate of knowledge transfer
necessary for new staff to gain the critical skills they need to perform
their regulatory responsibilities. In addition, although NRC created a
Human Capital Council in July 2006 to formulate and integrate strategies
for NRC's offices to address human capital challenges, it is too early to
determine whether the council can balance its responsibility both to
develop solutions and to provide strategic direction for effectively
addressing these key challenges. Accordingly, we are recommending that NRC
take actions to better integrate its strategic human capital planning into
its implementation activities. NRC agreed with our recommendation.

NRC has been effective in recruiting, developing, and retaining a
critically skilled workforce to date, and has taken several actions in
2006 to increase its overall workforce capacity, but because NRC has not
fully implemented some of its planned efforts to enhance its hiring and
training, it is unclear whether this performance will be sustained. NRC
has addressed our five key principles for strategic workforce planning and
has used its human capital tools, authorities, and flexibilities to
recruit, develop, and retain the critically skilled workers it needs;
however, the agency has not evaluated the effectiveness of some of these
flexibilities. For example, its leadership and management have been
extensively involved in establishing, communicating, and implementing
workforce planning strategies. NRC also has developed a process that
inventories existing critical skills and compares them with needs to
identify gaps. Furthermore, NRC uses many targets and measures to monitor
the status of its efforts, such as the composition of its hires and
separations. As a result, during fiscal year 2006, NRC exceeded its
initial goal of hiring 300 new staff by bringing 371 employees on board,
which was substantially higher than in previous years. Of these new
workers, 54 percent were midlevel hires--many with nuclear industry
experience--who typically require less training before performing their
jobs than entry-level hires from universities.

Although NRC has strengthened its efforts to identify and fill critical
skills gaps, it is too early to assess the effectiveness of some
strategies that were put into practice during fiscal year 2006. For
example, NRC closed about 55 critical skills gaps but identified 115
additional critical skills gaps, many of which will require 1 year or more
of classroom and on-the-job technical training to fill. NRC also does not
systematically evaluate its use of human capital authorities and
flexibilities--such as recruitment incentives or early replacement
hiring--for recruiting, developing, and retaining a critically skilled
workforce, although it tracks the frequency of use and associated costs
for some of these authorities and flexibilities. Without this information,
NRC may either under- or over-use certain authorities and flexibilities
and inefficiently use its annual human capital funding. In addition, NRC
managers told us that while some human capital measures and targets are
reliable and useful, others do not provide sufficiently meaningful
information to assess progress. NRC planned in 2004 to develop a human
capital accountability system plan that, in part, would describe the
measures, metrics, and associated targets needed to assess its achievement
of human capital outcomes; this plan has not yet been drafted. Without
this framework, it is difficult for offices to identify useful practices
and improve agencywide understanding of how human capital activities
directly support the achievement of agency goals and strategic outcomes.
Furthermore, although NRC has previously surveyed employees about their
satisfaction with its human capital program, the agency does not plan to
conduct a survey during fiscal year 2007 even though doing so could
provide a useful, updated perspective in assessing initiatives as NRC
continues to expand its workforce. Accordingly, we are recommending that
NRC take actions to evaluate (1) the effectiveness of its use of human
capital tools, authorities, and flexibilities and (2) the usefulness of
its human capital measures; intended outputs; and targets for recruiting,
developing, and retaining a critically skilled workforce. We are also
recommending that NRC survey its employees during fiscal year 2007 about
their satisfaction with its human capital program, including new
initiatives and offices' use of flexibilities to maintain a quality work
environment. NRC agreed with our recommendations.

NRC has acted to address two key uncertainties that affect its workforce
needs--that is, whether it can (1) maintain its workforce in the face of
future competition with the nuclear power industry for critically skilled
workers and (2) accurately gauge its workload, particularly for reviewing
license applications for new nuclear reactors, during the next 3 years so
it can meet its commitments for timely reviews while ensuring nuclear
power plant safety and security. Regarding its ability to continue to
attract and retain key personnel, NRC annually tracks the number and
salaries of U.S. scientists and engineers in a few key disciplines to
discern shifting trends. NRC also has initiated additional activities,
authorized by the Energy Policy Act of 2005, to support key university
programs to attract greater numbers of students into mission-critical
skills areas, and to offer scholarships to those studying in these fields.
Such activities have the potential to enhance the quality of NRC's
entry-level candidate pool with a pipeline of critically skilled
candidates. Nevertheless, NRC will face greater competition in attracting
and retaining experienced scientists and engineers, and, further
complicating matters, NRC generally employs only U.S. citizens in these
positions. Regarding the anticipated growth of license applications for
new reactors, NRC expects to complete its review of applications within 42
months, including holding required public hearings. Although NRC's process
is intended to allow for a more efficient review of combined license
applications and is generally supported by the nuclear power industry, it
is as yet untested. In addition, in anticipation of receiving an initial
wave of applications in October 2007, NRC has periodically met with power
company representatives to discuss and resolve matters related to how the
process is to move forward.

Background

The Energy Reorganization Act of 1974 established NRC as an independent
agency, headed by a five-member Commission, to regulate the nation's
civilian use--commercial, industrial, academic, and medical--of nuclear
energy and materials, including nuclear power reactors and research and
test reactors.^4 NRC's mission is to ensure that civilian users of nuclear
materials adequately (1) protect public health and safety; (2) promote the
common defense and security, including securing special nuclear materials
against radiological sabotage and theft or diversion; and (3) protect the
environment. NRC's total operating budget, excluding the IG's office, grew
from about $618 million in fiscal year 2004 to about $735 million in
fiscal year 2006.^5 While NRC requested about $808 million for fiscal year
2007, the Continuing Appropriations Resolution, 2007, limits its
appropriations to the fiscal year 2006 funding level. Similarly, NRC's
funding allocations for recruiting, training, and other human capital
activities have grown from a total of $35 million, or 6 percent of its
total operating budget, in fiscal year 2004 to about $61 million, or 8
percent of its planned allocations, in fiscal year 2007.^6

4Pub. L. No. 93-438.

^5NRC is required by law to recover through fees about 90 percent of its
budget authority each fiscal year, less certain specified amounts. Under
the Omnibus Budget Reconciliation Act of 1990 (OBRA-90), as amended, the
fee recovery requirement was about 100 percent in fiscal years 1991
through 2000, and gradually reduced to 90 percent in 2006. The Energy
Policy Act of 2005 permanently extended NRC's 90-percent fee recovery
requirement beginning in fiscal year 2007. NRC collects license and
inspection fees under the authority of the Independent Offices
Appropriation Act of 1952, known as the User Charge Statute, 31 U.S.C. S
9701. NRC collects "annual fees"--generic and other regulatory costs not
covered by the license and inspection fees--under the authority of
OBRA-90, as amended. Operators of federally owned research reactors are
exempt from paying fees if the reactors are used primarily for educational
training and research and meet certain technical design criteria. See 71
Fed. Reg. 30722, 30732 (May 30, 2006).

About 70 percent of NRC's workforce in fiscal year 2006 was dedicated to
ensuring the safe and secure operation of civilian nuclear power reactor
facilities and research and test reactors. NRC estimates that at least 500
new critically skilled positions will be added through fiscal year 2009,
primarily to license and inspect the construction of new reactors. (See
app. III for more information on NRC's new reactor licensing process.)
NRC's reactor safety activities and their related percentages of NRC's
workforce include the following:

           o reactor licensing: power upgrades (approving increases in the
           allowable level of generated power) and license transfers,
           operator licensing, regulation development, operating experience
           evaluation, and financial assurance (25 percent of NRC's
           workforce);
           o reactor license renewal (3 percent);
           o new reactor licensing (6 percent);
           o reactor inspection and performance assessment: emergency
           preparedness and incident response, reactor technical and
           regulatory training, imposition of enforcement sanctions for
           violations of NRC requirements, and investigation of alleged
           wrongdoing by licensees, applicants, contractors, or vendors (30
           percent);
           o homeland security activities: threat assessment, safeguards and
           security reviews and inspections, force-on-force exercises, and
           regulatory infrastructure (5 percent); and
           o international efforts to enhance domestic and global nuclear
           safety (1 percent).

           In fiscal year 2006, about 28 percent of NRC's workforce was
           devoted to the following nuclear materials and nuclear waste
           safety activities to secure the use and management of radioactive
           materials:

           o nuclear fuel cycle facilities (6 percent of NRC's workforce);
           o nuclear materials activities (10 percent);
           o repository or disposal of high-level waste--specifically,
           licensing decisions and regulatory oversight (4 percent);
           o decommissioning of nuclear reactors and other facilities, and
           low-level waste management (almost 4 percent); and
           o storage and transportation of spent nuclear fuel both at and
           away from reactor sites (almost 4 percent).

           NRC estimates little growth in the number of personnel committed
           to these activities, with some slight increases related to fuel
           cycle production facilities and possibly high-level waste storage,
           depending upon DOE's submission of its license application for the
           Yucca Mountain repository.^7 In fiscal year 2007, NRC expects to
           oversee more than 4,400 licenses for nuclear materials and nuclear
           waste safety, while 34 Agreement States will regulate and oversee
           over 18,000 licenses.^8
			  
			  NRCï¿½s Human Capital Planning Framework Is Aligned with Its
			  Strategic Mission and Programmatic Goals, but Some Further
			  Actions Are Required

           NRC's human capital planning framework is generally aligned with
           its strategic mission, outcomes, and programmatic goals; however,
           some key plans and activities are still being developed or
           implemented.
			  
			  NRCï¿½s Strategic Human Capital Planning Framework Is Coherently
			  Aligned

           NRC's human capital planning framework has generally aligned human
           capital activities with NRC's management goal and the goal's
           strategic outcomes. NRC also has taken significant steps,
           particularly during fiscal year 2006, to ensure that human capital
           plans and strategies are demonstrated through its human capital
           activities by achievement of agencywide and office-specific goals
           and outcomes. In addition, NRC's strategic and existing
           operational planning documents link human capital goals and
           strategies to several agencywide performance measures.

           A critical success factor for high-performing organizations is the
           alignment of their human capital initiatives with mission and goal
           accomplishment. Alignment is demonstrated by linking human capital
           management strategies with agency mission, goals, and
           organizational objectives and integrating these strategies into
           its strategic plans, performance and accountability plans, and
           budget requests. This linkage allows agencies to assess and
           understand the extent to which their workforce contributes to
           achieving the overarching mission.

           As shown in figure 1, NRC's strategic human capital approach
           demonstrably supports the agency's organizational performance
           objectives. Together, NRC's plans and strategies, programs, and
           activities provide a coherent structure designed to support NRC's
           safety and security mission. Specifically, NRC's strategic plan
           outlines six human capital strategies that delineate how the
           agency will achieve its strategic outcomes of (1) continuous
           improvement in NRC's leadership and management effectiveness in
           delivering the mission and (2) a diverse, skilled workforce and an
           infrastructure that fully support the agency's mission and goals.

^6NRC uses OPM's Human Capital Assessment and Accountability Framework
categories to organize its human capital budget. In fiscal year 2006,
three human capital budget categories--talent, results oriented
performance culture, and leadership and knowledge management--contained
over 25 items and accounted for nearly $40 million and over 90 full-time
equivalent (FTE) positions. In addition, strategic alignment,
accountability, and workforce planning/deployment were assigned 2 FTE
positions.

^7In July 2006, DOE announced its intention to submit its license
application for the Yucca Mountain repository to NRC by June 30, 2008, and
to initiate repository operations in 2017. DOE stated the 2017 opening
date is a "best-achievable schedule" and is predicated upon enactment of
new legislation.

^8Under section 274(b) of the Atomic Energy Act, NRC has relinquished to
the 34 Agreement States responsibility for licensing and regulating the
use of source, by-product and certain quantities of special nuclear
material within the state.

Figure 1: NRC's Strategic Human Capital Planning and Implementation
Framework

NRC has also taken significant steps to ensure that human capital plans
and strategies are implemented to achieve agencywide and office-specific
goals and outcomes. For example, NRC's 2004 strategic human capital plan
delineates tools, authorities, flexibilities, and programs for hiring,
developing, and retaining personnel, most of which NRC currently uses. The
strategic human capital plan also directs the development of several
additional plans, strategies, and activities--many of which have been put
into place--to achieve the workforce needed to accomplish NRC's goals.
NRC's strategic and existing operational planning documents also link
human capital goals and strategies to several agencywide performance
measures, in part illustrated in its annual performance budget and
accountability reporting.

Some Key Human Capital Planning and Implementation Efforts Are Still in Process

While NRC's planning framework delineates the relationship between human
capital activities and strategic outcomes, some key plans are still being
developed, completed, or put into practice. Although most of NRC's
agencywide and office specific plans provide human capital management
strategies, the linkage is not fully delineated between generally
identifying strategies and selecting and deploying particular strategies.

An agency that is successful in aligning and integrating human capital
approaches and goals considers further initiatives and refinements when
organizational needs change or when successes or shortcomings of its human
capital efforts are demonstrated.^9 NRC is currently undergoing such a
transition because the agency, both in terms of demographics and workload,
will have increasing and diverse human capital needs in coming years. In
response, during fiscal year 2006, NRC initiated a range of activities, in
various stages of completion, intended to provide a more robust framework
through which to operate during the next few years. For example:

           o Since late 2005, NRC's four regional offices have developed or
           are further implementing human capital management plans that
           reflect their human capital activities. The general framework of
           these plans mirror NRC's 2004 strategic human capital plan.
           o In August 2006, NRC adopted a more comprehensive approach to its
           knowledge management and knowledge transfer. NRC's prior approach
           to knowledge management did not fully support the agency's need
           for a faster rate of knowledge transfer to accommodate increasing
           retirements, midcareer turnover, agency growth, and the broader
           scope of knowledge needed, for example, to support new
           technologies and new reactor designs. NRC's new framework provides
           significant direction and detail regarding how knowledge
           management can be accomplished. However, it remains to be seen
           whether implementation of these initiatives will
           stimulate the rate of knowledge transfer necessary for new staff
           to gain the critical skills they need to perform their regulatory
           responsibilities.

           o In fiscal years 2006 and 2007, NRC has been developing common
           measures for offices to monitor and evaluate performance in
           support of the goals in its 2004 Comprehensive Diversity
           Management Plan (CDMP) to (1) recruit diverse employees at all
           levels, (2) develop and retain diverse employees by promoting an
           environment that values differences, and (3) increase the
           diversity of employees in senior and managerial positions. CDMP
           was designed to promote strategies that increase NRC's
           organizational capacity, guide decisions and practices that impact
           equal opportunity, and promote the principles of diversity
           management.
           o In early 2006, NRC developed a more detailed agencywide list of
           best practices strategies and actions for achieving equal
           employment opportunity goals through recruiting, staff
           development, merit process, inclusion and workforce culture,
           awards and recognition, communication, action tracking, and
           organization assessment. These best practices strategies and
           actions complement CDMP strategies.^10 
           o In September 2006, NRC finalized a strategic training and
           development plan to more specifically identify how existing
           efforts to ensure the effectiveness and efficiency of training
           will be augmented and integrated. The plan's goals are to enhance
           individual performance, meet agency needs, ensure resources are
           optimized, and confirm the extent to which NRC is realizing
           training benefits.
           o During fiscal year 2006, NRC identified inefficiencies in
           coordinating and integrating planning and operations, stretching
           its human capital resources to hire and meet the need for nearly
           double the number of new employees than in previous years. In
           part, NRC's intensified activity demonstrated that coordination
           among human resources and program offices, although considerable,
           was not yet optimized. In response, in July 2006, NRC created a
           Human Capital Council composed of office deputy directors and a
           deputy regional administrator to provide a senior leadership and
           programmatic perspective.^11 OHR chairs and supports the council,
           whose purpose is to provide an agency-level forum to formulate
           strategies to address human capital challenges, share best
           practices, and develop an integrated approach to address human
           capital issues. The council is expected to make recommendations
           for action to the Executive Director for Operations and Chief
           Human Capital Officer to improve the agency's management of human
           capital. The council also intends to identify ways by which OHR
           personnel can more proactively support program offices and solve
           problems. However, it is too early to determine whether the
           council can balance its responsibility to provide both strategic
           direction and develop an integrated approach for effectively
           addressing these key challenges.
           o NRC has drafted but has not completed its first annual human
           capital implementation plan, in part because of the need to
           support competing human capital demands, particularly NRC's
           sharply increased hiring targets.^12 Similar to the aims of the
           Human Capital Council, the implementation plan would serve to link
           strategic planning to operational planning and implementation
           efforts. At least one program office, NRR, has developed such a
           plan, which both demonstrates alignment to NRC's 2004 strategic
           human capital plan and provides much more specificity on the means
           to achieve and implement human capital strategies. Without the
           plan, NRC managers face increased complexity and uncertainty in
           managing recruitment and development activities for the critically
           skilled employees they will need.

           It is too soon to determine the extent to which these recent
           efforts, taken together or separately, will help NRC to more
           effectively respond both to continuing and new workforce demands
           during 2007 through 2010, and beyond. The urgency to incorporate
           strategic human capital management principles more explicitly into
           operations may vary across program offices, in part because of
           somewhat different program needs or requirements. Because key
           internal stakeholder commitment and involvement will dictate their
           success, the further development and use of these plans and
           activities are likely contingent on whether stakeholders consider
           them necessary and effective for integrating NRC's human capital
           activities and enable them to achieve the desired results.
			  
			  NRC Has Generally Been Effective in Recruiting, Developing, and
			  Retaining Critically Skilled Employees, yet Many Activities Were
			  Only Recently Initiated

           To date, NRC's approach for recruiting, developing, and retaining
           a critically skilled workforce has generally been effective and
           addresses our five key principles for effective strategic
           workforce planning. NRC's implementation of its workforce planning
           strategies demonstrates significant agency focus on achieving a
           diverse, skilled workforce to meet anticipated workload demands
           that it foresees in the next few years. For example, NRC has
           estimated the skills and personnel it needs for new reactor
           licensing and exceeded its fiscal year hiring target by bringing
           on 371 new employees. However, because of substantial challenges
           facing NRC and because several efforts have not yet been fully put
           into practice, the framework's overall effectiveness in
           collectively enhancing NRC's overall workforce capacity is not
           fully clear. As a result, while NRC determined that it closed
           about 55 critical skills gaps in fiscal year 2006, it also
           identified 115 new gaps and 76 continuing or long-term gaps, many
           of which will take a significant amount of training and
           development to be considered filled. NRC has proposed to increase
           funding for leadership, training and development, and knowledge
           management by 37 percent in its fiscal year 2007 budget request in
           an effort to further close these gaps. In addition, NRC's use of
           its flexibilities could be further improved by systematically
           evaluating how they contribute to desired outcomes. Similarly, NRC
           could revise some of its measures, metrics, and targets to better
           target and gauge agency progress.
			  
			  NRC Analyzes Its Mission Priorities and Workforce Capacity to
			  Identify Ongoing and Future Critical Skills Needs

           Our prior work found that top leadership and management, when
           clearly and personally involved in workforce planning, can provide
           the organizational vision that is important in times of change,
           and can generate stability and cooperation within the agency to
           ensure that planning strategies are thoroughly implemented and
           sustained. With respect to our first principle, we found that over
           the past several years, NRC's top leadership has provided
           direction, and together with senior management, has become
           increasingly engaged in human capital management and strategic
           workforce planning.^13 NRC's 2004-2009 Strategic Plan, which
           introduced a management goal and objectives specifically for
           strategic human capital management, was developed through
           high-level collaboration among the Deputy Executive Directors for
           Operations, the Chief Financial Officer, the four regional
           administrators, and the directors of program offices and OHR.

           Top leadership's involvement in strategic workforce planning and
           human capital activities is further evidenced through annual
           briefings to the Commissioners on human capital management;
           biannual briefings to the Commissioners on comprehensive diversity
           management; and the Commission's hosting of annual all-staff
           meetings, during which Commissioners communicate agency progress,
           discuss challenges the agency faces, and respond to employees'
           questions. During the past year, the Commissioners also solicited
           more information on, and provided more direction for, implementing
           such human capital activities as recruiting, hiring, and knowledge
           management. NRC managers generally told us that the agency's human
           capital approach plays a significant role in enabling NRC to
           attract, hire, and retain a diverse and skilled workforce.
           Overall, NRC's 2005 employee survey results showed that employee
           perceptions of management had improved since 2002; nevertheless,
           results also indicated that NRC management could further improve
           upon how it encourages employees to give their best.

           In emphasizing the importance of succession planning, senior NRC
           managers also said the agency is active in identifying and
           developing its midlevel and upper-level managers and leaders. Our
           prior work has found that such activities can positively affect an
           agency's ability to increase the retention of high-potential
           employees, maintain sufficient leadership capacity as senior
           executives retire, and achieve a more diverse workforce. NRC
           continued and intensified its succession planning activities in
           2006 in light of agency growth and reorganization with managers
           conducting efforts to determine the appropriate skills and
           leadership "fit" for Senior Executive Service (SES) positions and
           anticipating replacement needs in 2-, 4-, and 6-year time
           frames.^14

           Our prior human capital work also found that an organization's
           effective use of communications strategies promotes transparency,
           creates shared expectations, and enables improved progress
           reporting. Although from 2001 to 2005, NRC's IG identified
           intra-agency communications as one of the most serious challenges
           facing the agency, it removed this challenge in its 2006 report
           because of various actions NRC has taken to improve internal
           communications. In addition, NRC's 2005 employee survey results
           demonstrated a significant improvement over the 2002 survey
           results. The steps that NRC has taken include the following:

           o In response to a 2002 IG recommendation, NRC created a
           Communications Council in 2003. The council, which meets monthly,
           coordinates and launches internal communications initiatives,
           shares best practices, provides a forum for offices to advise and
           recommend further improvements, and posts meeting summaries to
           NRC's internal Web page.
           o Management has promoted transparency by developing and
           disseminating key information on its human capital policies,
           procedures, and processes through management directives and
           "yellow announcements."^15 
           o To create shared expectations and buy-in, OHR conducts periodic
           video teleconferences with regional offices' management,
           supervisors, and staff to explain new policies and procedures. OHR
           also provides other face-to-face training as needed, typically on
           new developments or major changes in human capital policies and
           procedures. For example, in 2006, OHR and the General Counsel
           partnered to conduct focused training on such topics
           as merit staffing, performance and conduct issues, and equal
           employment opportunity, which NRC plans to incorporate into its
           formal supervisory curriculum.

           o The NRC Reporter, a weekly newsletter instituted in early 2005,
           provides employees with information on various agency initiatives,
           and an Executive Director for Operations Update, introduced in
           2002, discusses operational activities on a weekly to biweekly
           basis.
           o NRC's Web site and Agencywide Document and Access Management
           System also provide easy access to human capital materials,
           including transcripts of annual briefings, planning documents, and
           its "human capital management tool box."
           o NRC routinely solicits feedback or comments from offices,
           employees, and the National Treasury Employees Union (NTEU) on the
           introduction of new or major changes to flexibilities, policies,
           and procedures.^16 
           o NRC's 2005 employee survey results on NRC's Differing
           Professional Opinions Program, through which employees can provide
           alternative professional theories or opinions, demonstrated no
           statistically significant increase in this category's results
           since 2002, and NRC identified it as an area for improvement. A
           key senior manager also noted that concern still existed about
           this program yet encouraged its use, saying that such opinions and
           resulting discussions make NRC's organizational safety and
           security mind-set sounder.

           Although NRC has demonstrated efforts in the above areas,
           opportunities exist to further enhance its capability to monitor
           and measure its human capital success and progress. We have found
           that leading organizations have periodically sought their
           employees' input and explicitly addressed that input to adjust
           their human capital approaches.^17 One way agencies assess
           employee satisfaction and leadership and management practices that
           contribute to agency performance is through employee surveys.
           NRC's IG conducts its Safety Culture and Climate Survey every few
           years, the last being in 2005; NRC also participates in OPM's
           biannual Federal Human Capital Survey, most recently conducted in
           2006. Even though (1) at least one third of its workforce will be
           directly affected by office reorganizations or expansions, (2)
           several key human capital efforts are to be further implemented,
           and (3) over 200 retirements or resignations are anticipated, NRC
           does not plan to conduct an employee survey during fiscal year
           2007. Employee survey results could provide NRC managers with
           employees' feedback that could be used to adjust the human capital
           approaches as appropriate during this particularly critical year.
           Without such data as a key basis for understanding the workforce
           climate, it will be more difficult for NRC to gauge any shifting
           trends, determine strategies to address any problems, and report
           on actions it has taken to move forward.

           NRC managers and a key NTEU official we interviewed said that
           their relationship, characterized as somewhat tenuous, could also
           be improved. NTEU officials told us that NTEU's influence had
           diminished somewhat in recent years because (1) since 2001,
           federal agencies are no longer required to establish partnerships
           with their labor organizations;^18 (2) the union's own leadership
           style was not always conducive to effecting change; and (3) the
           union provided limited resources and incentives to stimulate
           active participation of its members. NTEU officials and NRC
           managers also had differing views on how to facilitate Agency
           Labor-Management Partnership Committee meetings between senior
           union officials and NRC managers, yet they agreed on the need to
           raise issues appropriate for committee consideration. NRC managers
           and NTEU officials told us that they plan to defer renegotiation
           of the NTEU contract until 2008, although they recognize NRC's
           work environment is rapidly changing.

           Our prior work found that maintaining information on the critical
           skills and competencies that an organization's personnel possess
           is especially important for federal agencies operating in a
           changing environment.^19 Shifts in national priorities, advances
           in technology, budget constraints, and other factors affect the
           critical skills an agency needs to fulfill its mission. NRC
           annually analyzes its workforce's skills by gathering data on
           employee skills and competencies, identifying the existing and
           future critical skills needed, and determining if and where gaps
           exist. As a result of this process, which has become increasingly
           institutionalized since 2002, NRC reviews its existing workforce
           characteristics, identifies ongoing and future critical skills
           needs, and tracks critical skills gaps. Engineers and scientists,
           who represent about half of the overall workforce, are the more
           evident of NRC's critically skilled population; however, NRC has
           identified the fields of contracting, law, security, and risk
           assessment, among others, as mission-critical skills. In addition,
           because of increased homeland security requirements, NRC's
           critical skill set has broadened in recent years to include more
           expertise in materials and reactor security, emergency
           preparedness, and incident response.

           For NRC's annual critical skills assessment, (1) employees
           inventory their skills, competencies, and levels of expertise; (2)
           office and branch managers assess the supply of and demand for
           general and particular skills; and (3) OHR personnel further
           analyze this information to determine agencywide critical skills
           needs. The primary tool NRC uses to gather detailed data on an
           employee's critical skills and competencies is its strategic
           workforce planning (SWP) system database, which was developed in
           2002. The SWP system identifies the critical skills and
           competencies each employee possesses, his or her career stage, and
           his or her retirement eligibility dates. Supervisors, managers, or
           human resources personnel can then generate summary reports with a
           range of parameters. The SWP system's staff and critical skill
           matrix lists all staff in a given branch or office, and indicates
           each employee's skill level, title, retirement eligibility date,
           and years until retirement. OHR and program office managers told
           us that the SWP system's accessibility and utility have improved
           in the last 2 years. Some program managers noted that they have
           used SWP data to identify potential skills needs and gaps, to
           inform decisions when assigning work, and for succession planning.
           These managers noted that the SWP system requires recurring
           employee input and managerial and supervisory inputs and analysis
           to be effective. In 2006, over 80 percent of employees and
           supervisors updated their skills and anticipated needs,
           respectively.

           In addition to gathering skills information, NRC has conducted an
           annual agencywide needs and gaps assessment since 2003. More
           specifically, program office managers assess the supply of and
           demand for general and particular skills in their offices and
           branches, given their existing and anticipated workload. The
           offices each identify their "most critical" needs.^20 They then
           categorize these needs as either near term (0 to 2 years) or long
           term (3 to 5 years), and their importance as either top tier or
           second tier. Then, OHR compiles these assessments, conducts
           further analyses, and reports the results to senior NRC managers
           and program offices. NRC's fiscal year 2006 analyses identified
           over 300 critical skills needs, over 100 of which were categorized
           as top tier.

           In preparation for reviewing combined license (COL) applications
           for constructing and conditionally operating new nuclear reactors
           and plants, NRC has assessed the range and magnitude of critical
           skills needs. Specifically, NRC conducted a job-task analysis in
           early 2006 to better define anticipated critical skills needs by
           identifying detailed tasks, competencies, and skills associated
           with prior reactor license application reviews. NRC managers
           determined that a large majority of skills associated with current
           licensing, regulatory, and technical expertise related to existing
           reactors are "portable" to the new reactor licensing reviews.
           These managers also identified a small number of new critical
           skills that are specific to new reactor licensing, such as
           hydrology and reactor physics. NRR then developed an initial
           resource estimate model that, in part, estimated critical skills
           needs by functional areas.^21 Five skill sets--project management,
           civil engineering, instrumentation and controls, legal, and
           operator licensing--make up over 50 percent of the estimated
           effort, while about 17 other skill sets make up the remainder. In
           the summer of 2006, NRR retained a contractor to develop a master
           project management plan for project planning and scheduling that
           would (1) support NRC's review of COL applications for
           constructing and conditionally operating a new reactor and (2)
           link critical skills needs to actual personnel, positions, and
           time frames. The plan, which will be completed in early 2007, will
           estimate how to phase, project manage, and staff each aspect of
           the reviews, on the basis of validation of initial estimates. NRR
           is also developing a transitional staffing plan to identify the
           employees who will work in NRR and in NRC's newly established
           Office of New Reactors. (See app. IV for information about NRC's
           recent workforce reorganization and expansion.) In doing so, these
           managers said that the combined use of the SWP system, the
           resource estimate model, and the project management plan will
           inform how NRR will reorganize its personnel into the two offices
           and allocate its resources.
			  
			  NRC Primarily Uses Recruiting, Hiring, Training, and Development
			  Strategies to Close Existing and Future Critical Skills Gaps

           Our prior work has found that, to fill skills gaps, agencies need
           to develop human capital strategies and tools with the resources
           that are reasonably expected to be available. These strategies and
           tools encompass recruiting and hiring, training and developing
           staff and leadership, succession planning, knowledge management,
           and use of flexibilities. Agencies also need to align these
           strategies to eliminate gaps and optimize the contribution of
           current and future critical skills and competencies for mission
           success.

           NRC annually identifies critical skills gaps and develops
           strategies to address the gaps to achieve and maintain the level
           of expertise required to meet existing and anticipated workload
           demands. During the last 2 years, program office managers have
           relied on (1) recruiting and hiring and (2) training and
           development as their key gap closure strategies, among others.
           These also represent the majority of the tools, programs,
           authorities, and flexibilities NRC regularly employs as human
           capital strategies.
			  
			  NRC Significantly Increased Its Recruiting and Hiring Efforts
			  and Its Use of Certain Flexibilities in Fiscal Year 2006

           NRC's recruiting and hiring approach enabled the agency to exceed
           both its initial 2006 hiring target of 300 and its subsequent
           target of 350, by hiring 371 new employees who had reported as of
           September 30, 2006. NRC uses both general and specific vacancy
           announcements at the entry, mid, and upper levels that typically
           represent few to several critical skills areas in related
           disciplines and specialty areas.^22 Fiscal year 2006 was the first
           year in over a decade that NRC's recruiting and hiring efforts
           were targeted at both replacing personnel leaving the agency and
           expanding its workforce--about half of the new hires replaced
           employees who left NRC through retirement or resignation and half
           increased NRC's total workforce to 3,347 employees.^23 In
           particular, NRR lost 75 employees--39 employees retired or
           resigned and 36 transferred to other NRC offices--but hired nearly
           200 employees, to staff both existing and new reactor licensing
           work. NRC's fiscal year 2007 hiring needs represent over 25
           critical skills areas, and represent general and specific
           engineering and science fields as well as security, intelligence,
           information technology, contract management, human resources, and
           project management fields.

           NRC's approach is driven by the identification of critical skills
           needs and efforts to fill gaps, and includes the following
           activities:

           o NRC's annual recruiting call projects the agency's needs to hire
           entry-level and experienced employees with critical skills in
           particular disciplines. The fiscal year 2006 recruiting included
           general and specific engineering and science fields, security,
           information technology, and contract management fields. NRC's
           recruiting program includes visits to universities and
           professional society organizations to identify highly qualified
           candidates.
           o While the percentages vary somewhat from year to year, NRC
           generally brings on 60 to 70 percent of its new professional hires
           at the midlevel or upper level--frequently with several years of
           relevant professional experience--and the remainder of its hires
           at the entry level. About 200 of these hires--predominantly
           engineers, scientists, lawyers, human resource specialists, and
           contract specialists--came on at the midlevel or upper level in
           2006, including over 50 hired from other federal agencies.
           Midlevel or upper level hires generally require less training than
           entry-level hires from universities to perform their jobs.

           More broadly, although the agency exceeded its hiring goals in
           fiscal year 2006, it is unclear whether NRC can effectively close
           critical skills gaps in the near and longer term. While the agency
           determined that it closed about 55 gaps in fiscal year 2006, it
           also identified 115 new gaps and 76 continuing or long-term
           gaps.^24 Most new NRC employees typically need from 1 to several
           years of targeted technical training, on-the-job experience,
           and/or development opportunities to fully learn and perform agency
           job functions, according to NRC managers. In addition, making
           determinations about whether gaps are sufficiently filled is an
           involved process and often depends on managers' understanding of
           each employee's knowledge and skills. However, maintaining that
           understanding will likely become more difficult as workforce
           demographics shift and NRC reorganizes and grows. In addition,
           gaps are determined at the branch level, reported at the office
           and regional levels, and compiled into an agencywide assessment.
           While some knowledge and skills are easily shared within branches,
           divisions, or offices, managers told us that the transferability
           of employees across these areas can be limited.

           NRC also uses various flexibilities in recruiting and hiring new
           employees, and it tracks the frequency and cost associated with
           the use of some flexibilities. (See app. V for NRC's use of human
           capital flexibilities, authorities, tools, and programs.) For
           example, we found that OHR, program, and regional managers
           identified recruitment incentives as among the most valuable of
           NRC's tools. Comparisons of recruitment incentive awards in fiscal
           years 2004 and 2006 show that (1) the number of awards increased
           from 6 to over 140, (2) total monetary awards increased from
           $77,000 to $979,000, and (3) the maximum value of an award
           increased from about $5,400 to over $20,000. NRC requested $1.25
           million to make about 160 incentive awards in fiscal year 2007. In
           addition, NRC awards standardized recruitment incentives to many
           entry-level engineers and scientists and, on a case-by-case basis,
           to midlevel personnel who are typically in more specific critical
           skills areas. NRC tracks midlevel hires who received recruitment
           incentives--about 60 in fiscal year 2006--and at least 90 percent
           worked in the private sector, including many for nuclear power
           plants or reactor vendors.

           NRC managers we interviewed and surveyed were generally satisfied
           with recruitment incentive awards and other available recruiting
           and hiring flexibilities, but they also said that direct hire
           authority would be a particularly useful recruiting and hiring
           tool.^25 In March 2006, OPM did not approve NRC's request to
           obtain this authority because it determined that the law does not
           apply to NRC's excepted-service positions. OHR managers told us
           that direct hire authority is among NRC's most wanted legislative
           authorities and that NRC is exploring avenues for obtaining it by,
           for example, requesting legislation.

           Although NRC tracks the frequency and cost associated with some
           recruiting and hiring flexibilities, it does not fully use some of
           these data to inform management decisions and further target
           recruiting and hiring efforts. Similarly, NRC does not
           systematically evaluate the extent to which the flexibilities
           positively affect its ability to realize a diverse, highly skilled
           workforce. For example, NRC does not assess the effectiveness of
           alternative recruitment incentives in attracting highly skilled
           employees or early replacement hiring that enables a new employee
           to work with a long-term employee who plans to transfer locations
           or retire. Without evaluating the effectiveness of its
           flexibilities, NRC may either under- or over-use certain
           authorities and flexibilities and inefficiently use its annual
           human capital funding. The Human Capital Council could provide a
           forum for evaluating the office- and agency-level implementation
           of human capital flexibilities and their effectiveness.

           Opportunities may also exist to improve some of NRC's recruiting
           processes. For example, it is unclear to what extent NRC managers
           systematically prioritize the positions that need to be filled,
           including the extent to which incentives should be offered to
           prospective employees. Similarly, a cognizant NRC manager told us
           that the agency appeared to dedicate a disproportionate amount of
           resources to recruiting and hiring at the entry level, for which
           the pool of applicants is very robust, as opposed to midlevel and
           upper-level positions, for which candidates generally have had
           work experience in the nuclear power industry--mainly either at
           nuclear power plants or reactor vendors. In addition, most NRC
           managers expressed concern about NRC's future ability to recruit
           for midlevel and upper-level positions when faced with more
           aggressive industry competition.
			  
			  NRC Has Many Training and Development Programs in Place and Is
			  Using Flexibilities to Enhance Existing Capacity

           NRC's training and development activities also represent a key gap
           closure strategy the agency uses. In general, the agency's
           training and development efforts include (1) agencywide, formal
           technical or leadership training and certification programs; (2)
           external training such as enrollment in specialized programs; and
           (3) on-the-job training involving knowledge and skills transfer on
           particular subjects. NRC recently finalized both a knowledge
           management program and a strategic training and development plan
           to support and sustain its critically skilled workforce. In fiscal
           year 2006, NRC allocated about $9.7 million for leadership
           development, training and development, and knowledge management
           activities. Its fiscal year 2007 budget request proposed to
           increase training and development spending to about $15.4 million,
           including $4.2 million for new reactor training, $4 million for
           internal technical training, and over $3 million for
           office-specific training.

           Managers we interviewed and surveyed identified NRC's formal
           training and development--such as qualification programs for
           materials or reactor health physics inspectors--and its Nuclear
           Safety Professional Development Program, SES Candidate Development
           Program, and Leadership Potential Program as among the most
           valuable for training and developing personnel. While NRC's
           Nuclear Safety Professional Development Program has been in place
           and has grown over the past several years, the agency also has
           expanded development opportunities for its midlevel and
           upper-level supervisors and managers, particularly in fiscal year
           2006. Specifically, NRC facilitated increased, more frequent
           enrollments in both the Leadership Potential Program and its
           counterpart Team Leader Development Program. Because the increase
           in the overall size of NRC's workforce corresponds with the need
           for trained supervisors, managers told us that providing
           sufficient training and development opportunities for new
           supervisors is vital. These managers expressed concern about any
           potential negative effect of excessive workloads on frontline
           supervisors, many of whom are also new to their positions.

           In addition to increasing participation in its development
           programs, NRC is increasing the frequency of key course offerings
           and focusing on particular critical skills areas. For example, in
           early 2006, OHR and NRR evaluated the extent to which training on
           new reactor designs would be required--anticipating future gaps on
           unique elements related to the regulatory process and design
           technologies--for which the agency has initiated specific training
           courses. Similarly, NRC plans to extend its Graduate Fellowship
           Program, which helps attract a small number of high-quality,
           highly educated employees in critical skills areas that the agency
           might not otherwise successfully hire.

           In July 2006, NRC instituted a knowledge management program to
           facilitate the transfer of knowledge and skills on specific
           subjects. The program is intended to systematize NRC's existing
           structure to better support the faster rate of collection,
           transfer, and use of a broader scope of knowledge needed to
           support, for example, new reactor technologies and new reactor
           designs. The program outlines initiatives that serve to avoid
           significant loss of mission-critical knowledge. NRC plans to (1)
           take over 15 implementing actions to facilitate the transfer of
           knowledge and skills during fiscal years 2006 through 2008 and (2)
           allocate over $1 million and several personnel to implement the
           program.^26 In general, the managers we interviewed and surveyed
           said the program would be an increasingly valuable tool in the
           coming years. NRC also uses the following specific flexibilities
           to transfer skills and knowledge:

           o NRC has hired replacements for certain positions before the
           current occupants leave the agency. Known as early replacement
           hiring or double encumbering, this flexibility allows NRC to
           provide salary and benefits funding for up to 1 year for the
           purpose of transferring critical skills, competencies, and
           institutional memory from an employee who is planning to leave NRC
           to a replacement employee. To be effective, early replacement
           hiring requires that the departing employee inform NRC of such
           intentions well in advance of the actual departure date. Since
           2004, NRC's annual funding for early replacement hiring has
           remained at $630,000, and an agency manager estimated that NRC had
           spent about $565,000 for 12 positions in fiscal year 2006.
           o As authorized by the Energy Policy Act of 2005, NRC has waived
           dual compensation limitations, known as the pension offset, for
           rehired retirees receiving pensions. This flexibility, known as
           the elimination of pension offset, allows NRC to rehire a retiree
           to fill a position at full pay if NRC has had difficulty in
           filling the position or if a temporary emergency exists.^27 In
           fiscal year 2006, NRC granted waivers for 46 retirees in eight
           headquarters and regional offices and spent about $2.3 million to
           employ them. The elimination of the pension offset is expected to
           become increasingly valuable to NRC in the next few years to
           retain access to expertise for knowledge transfer purposes.

           Also in 2006, NRC completed its agencywide training and
           development strategic plan to support more systematization,
           definition, and integration of its overall training and
           development approach. The plan delineates four goals related to
           individual performance, training effectiveness, training
           efficiency, and organizational performance. It identifies the
           following actions that NRC plans to take to better anticipate
           staffing, skills, and expertise to improve planning and reduce
           reactive responses:

           o ensure that its intended benefits are realized by using a
           documented and integrated approach;
           o more comprehensively define competencies and training needs for
           major functions or groups of like positions; and
           o better integrate its training and development programs with
           performance elements and standards, position descriptions,
           training needs surveys, and the SWP system.

           NRC managers generally believe that documenting and enhancing
           training, development, and qualification programs will be
           essential to enable NRC personnel to accomplish NRC's mission
           effectively and efficiently over the next several years. Because
           determining gap closure frequently requires tracking particular
           skills gaps over a multiyear period, and is not always easily
           demonstrated, NRC could benefit from this more systematic
           approach.
			  
			  NRCï¿½s Use of Tools, Authorities, and Flexibilities to Retain
			  Critically Skilled Employees Varies

           Nearly all of the managers we interviewed and surveyed said
           retention was not a problem, often citing NRC's 2005 attrition
           rate of about 6 percent. As a result, few managers identified
           retention tools as primary gap strategies that NRC most frequently
           uses to meet existing and future skills needs. However, the
           managers expressed general concern about impending retirements and
           potential future resignations if competition with the nuclear
           power industry intensifies for critically skilled employees.

           NRC employs some of the same tools, programs, and flexibilities to
           retain personnel that it uses to hire employees, but their
           purpose, audience, and application vary. For example:

           o NRC managers cited the relocation incentive as a valuable tool
           in retaining NRC personnel, especially inspectors, who move to new
           positions. Overall, 39 employees at the midlevel and upper level
           received a cumulative amount of $638,000 in fiscal year 2006. When
           change-of-station benefits and relocation services are added to
           this amount, relocation outlays totaled approximately $15 million
           and represented the majority of NRC's 2006 human capital budget's
           Talent subcategory.
           o NRC offers retention incentives, although somewhat infrequently.
           In fiscal year 2006, it awarded four, totaling less than $35,000.
           o NRC spent less than $1 million in total for student loan
           repayments for fiscal years 2004 through 2006. Its use of student
           loan repayments as a retention incentive has been relatively
           steady in recent years and has primarily targeted a handful of
           employees hired into the Honor Law Graduate Program. However, some
           NRC managers believe its use might be expanded in the next few
           years.
           o Most managers we interviewed and surveyed considered telework
           and flexible work schedule arrangements to be very to extremely
           valuable, and would be of the same or increasing value in
           recruiting, hiring, and retaining NRC personnel in the next few
           years. However, a cognizant NRC manager said that managerial and
           supervisory responsiveness to such arrangements varies. NRC does
           not routinely track or evaluate telework participation, such as
           the number and type of requests approved and denied, costs,
           benefits, and resource requirements associated with the program.
           However, NRC informally surveys offices about the number of
           employees who telework regularly, which is typically considered to
           be 1 day per workweek. As of November 2005, when NRC last gathered
           this information, about 250 of NRC's 3,000 employees regularly
           teleworked. In addition, many NRC employees telework on an
           irregular and infrequent basis.

           Although NRC uses and tracks these retention flexibilities to
           varying extents, it has not collected the information on each
           flexibility's costs and benefits needed to assess its
           effectiveness in retaining critically skilled employees while
           fulfilling management's objectives.
			  
			  Some Enhancements of NRCï¿½s Infrastructure to Support Administrative,
			  Educational, and Other Requirements Are in Process

           Agencies should build the capability needed to address
           administrative, educational, and other requirements--including
           information technology, security, and adequate space--that are
           essential to supporting infrastructure needs. Our prior work has
           found that agency officials should look for instances to improve
           process and procedure efficiencies and economies to reallocate
           resources and enable their human capital organizations to meet
           expanded roles in times of growth or change. We determined that
           NRC has taken steps to develop its internal capability to support
           the large number of new employees it expects to hire in upcoming
           years because of retirements and anticipated applications for
           licensing new nuclear reactors. In recent years, NRC has enhanced
           its administrative and information technology and communications
           support processes to improve its infrastructure. However, the
           agency still faces a few key limiting factors that, if left
           unaddressed or unresolved, may adversely affect its ability to
           meet current and future workforce needs.

           To improve its human capital administrative processes related to
           management, NRC has streamlined its recruiting and hiring
           processes by, for example, introducing an automated hiring system,
           identifying areas where it could standardize and streamline its
           processes, and eliminating unnecessary duplication of efforts.
           Implemented in 2002, NRCareers is an automated hiring system that
           hosts on-line vacancy announcements and an online application
           process. While this system has the ability to support an automated
           rating process and interface with such Web sites as USAJOBs, the
           development of these capacities is still in process. In addition,
           NRC has been (1) working with its personnel security branch to
           streamline the security clearance process for new hires and (2)
           granting clearances under reciprocity required by pertinent
           executive orders.

           NRC also has been creating support systems to improve its
           management of human capital data and reduce inefficiencies. For
           example, in July 2005, NRC created the Recruitment Activity
           Tracking System, a centralized Web-based system to monitor
           candidates' status, including when offers are received and for
           what position, start dates, and reasons candidates gave for
           declining offers. OHR and program office managers use this system
           to monitor vacancy announcements agencywide. Because the system
           records acceptance status, it can enhance coordination when NRC
           offices extend more than one offer to selected candidates;
           although calculating actual offers and acceptances is slightly
           more complex. NRC also uses the Recruitment Activity Tracking
           System to facilitate planning for space, security, resource
           allocation, and information technology by tracking employees'
           arrival dates. NRC plans to expand the system's capacity to track
           the security clearance process and notify OHR managers if
           candidates exceed a 30-day review period. NRC also has taken steps
           on e-Government initiatives to provide consolidated information on
           employment actions and history, integrating payroll and personnel
           action processing, and human resources line-of-business
           alignment.^28

           To improve its educational infrastructure and internal
           communication process, NRC has developed and is in the process of
           implementing the following three information management systems
           during fiscal year 2007:

           o NRC is developing an automated system to support its Lessons
           Learned Program--a set of processes, procedures, and oversight
           designed to collectively ensure that significant agency
           deficiencies are identified and corrected so they do not recur.
           This tool will link two existing agency systems to provide a
           Web-based, searchable and retrievable record of how each
           recommendation is addressed and will support program efforts to
           institutionalize the knowledge gained through the corrective
           action processes and develop solutions for long-term
           organizational retention.
           o NRC is improving the quality and capabilities of its Agencywide
           Document and Access Management System in terms of availability,
           performance, functionality, ease of use, and timeliness.
           Specifically, as a tool to capture knowledge, the Agencywide
           Document and Access Management System could help coordinate the
           timely review of license applications by serving as a complete and
           easily accessible repository of documentation for licensee
           information, according to NRR managers.
           o By mid-2007, NRC plans to launch the Learning Management System,
           which will replace the current training administration system. The
           Web-based system is designed to facilitate employees' and
           managers' abilities to view training options, plan coursework, and
           track and record progress in qualification programs. The system's
           original launch date, September 2005, was delayed because of
           compatibility problems related to the application and
           certification and accreditation requirements. NRC subsequently
           postponed its launch to implement an updated version of the
           application that had been developed. OHR managers want to link the
           Learning Management System to the SWP system because their efforts
           to efficiently use training resources have been complicated by
           incompatible information technology systems.

           While these initiatives are under way, NRC faces challenges in
           building the information technology and security infrastructure
           necessary for its increasing workforce. For the past 5 years,
           NRC's IG has cited the protection of information and the
           implementation of information resources as serious management
           challenges. NRC's Office of Information Services--which is
           responsible for information management, architecture, and
           policies--has taken steps to improve the infrastructure by
           acquiring new systems and integrating existing systems. The Office
           of Information Services also has (1) interfaced with NRR and other
           offices to determine the amount and type of services needed for
           new reactor licensing, (2) recruited and hired additional
           personnel to support the implementation of these new systems, and
           (3) begun to investigate contracting options to complement these
           new hires. However, it is unclear whether these steps will
           adequately meet the challenges associated with NRC's changing
           demographics and growing workforce. For example, NRC managers we
           interviewed and surveyed said telework would be one of the most
           valuable flexibilities available to NRC personnel in future years.
           However, NRC's information technology infrastructure can support
           only a limited amount of telework and would need to be upgraded to
           provide teleworking employees with secure and reliable access to
           e-mail and agency applications.

           Providing sufficient physical space in which its growing workforce
           can interact is one of NRC's greatest human capital challenges,
           according to its top leadership. In April 2006, NRC requested
           congressional assistance in persuading the General Services
           Administration and the Office of Management and Budget to address
           its space needs because NRC had exhausted the space available in
           its headquarters building in Rockville, Maryland, despite its
           space optimization program. Among the negative effects of
           inadequate physical space cited by NRC's top leadership are the
           inability to (1) appropriately colocate its new personnel with
           their organizational units to integrate them into the organization
           and provide supervision and (2) provide sufficient training and
           meeting space in headquarters for knowledge transfer and training
           and development purposes. OHR managers told us that training
           classes, in recently acquired space, began in mid-October 2006
           after a 6-month delay. However, it is unclear when NRC will be
           able resolve its long-term space needs because the Office of
           Management and Budget had not authorized the General Services
           Administration to send its proposal for more space to Congress for
           approval. NRC's top leadership is concerned that insufficient
           space will lead to overcrowding that will adversely affect NRC's
           ability to attract new workers and could lead current workers to
           leave NRC for organizations with a better working environment.
			  
			  Although NRC Uses Several Human Capital Measures, Some Do Not
			  Provide Sufficiently Meaningful Information to Evaluate Progress

           Our prior human capital work found that agencies need to develop
           appropriate performance measures to link human capital measures
           with strategic goals so they can be used to gauge success and
           evaluate the contribution of human capital activities toward
           achieving programmatic goals. We also found that developing
           meaningful outcome-oriented performance measures for both human
           capital and programmatic goals, and the collection of performance
           data to measure achievement of these goals, are major challenges
           for many agencies.

           NRC's annual performance planning process, through which its
           performance budget is developed, provides performance measures for
           each goal in its strategic plan.^29 Through the performance budget
           process, NRC develops key planning assumptions, program drivers,
           and outputs and establishes output- and outcome-based measures to
           monitor and evaluate program execution. NRC maintains two overall
           performance outcome measures to determine progress toward
           achieving excellence in agency management. To monitor human
           capital performance, NRC assesses progress using six output
           measures and targets for the recruiting and staffing and the
           training and development categories.

           In assessing NRC's human capital measurement framework, we found
           the following:

           o NRC has collected, tracked, and reported important demographics
           and human capital data and monitored workforce size, shape, and
           other characteristics for at least the past 5 years. OHR maintains
           a series of agencywide strategic workforce planning demographics
           tables that track employees by office and, for example, by their
           (1) race, ethnicity, and gender characteristics; (2) occupations
           and degree levels; (3) years of NRC and federal service; (4) grade
           or pay level; and (5) retirement eligibility and attrition
           projections and rates. NRC uses these data to monitor progress in
           achieving such human capital targets as the number of professional
           entry-level hires as a percentage of total hires.
           o OHR uses around 30 intended outputs, targets, and measures to
           monitor progress in recruitment and staffing, training and
           development/knowledge management, strategic workforce planning,
           leadership development and succession planning, employee and labor
           relations, and diversity management. OHR categorizes intended
           outputs in terms of effectiveness, timeliness, quality,
           efficiency, and customer satisfaction and compiles the agencywide
           results on these metrics. Program offices also are expected to
           monitor certain administrative metrics, such as the percentage of
           professional hires at higher grade levels, and to report their
           status to the Executive Director for Operations.
           o In fiscal year 2006, NRC met or exceeded most of its human
           capital targets associated with its measures and intended outputs.
           For example, NRC exceeded its target for overall hires of 300 new
           employees--subsequently increased to 350 new hires--by bringing on
           371 employees in fiscal year 2006. In addition to these new hires
           who started by September 30, 2006, approximately 145 employees
           were hired as a result of fiscal year 2006 efforts but reported
           for duty during the first quarter of fiscal year 2007. Of these
           145 employees, at least 95 are in occupational series that are
           typically considered mission-critical.
           o NRC plans to develop, or is in the process of developing,
           several additional measures, outputs, or metrics to gauge its
           overall progress toward achieving human capital outcomes. These
           efforts include the following:

                        o NRC is developing additional output measures for
                        workforce diversity and work life services to include
                        in its performance budget during fiscal year 2007.
                        NRC also plans to develop measures to annually assess
                        program results in knowledge management.

                        o NRC continues to explore ways to improve its
                        existing training and development performance
                        measures and metrics. For example, NRC is refining
                        its training output measures related to tracking the
                        average number of training hours completed per person
                        and the percentage of personnel who completed a
                        minimum number of training hours. These data will
                        provide a baseline to determine appropriate future
                        targets and ensure consistency across offices, as
                        appropriate, according to OHR managers. These two
                        output measures are among others being or already
                        developed to enhance how NRC monitors the extent to
                        which it is addressing identified training needs,
                        which is one of its broader performance plan
                        measures.
                        o NRC plans to refine preliminary employee and labor
                        relations measures to improve both the monitoring and
                        evaluation of employee and labor relations actions,
                        services provided, or overall performance. In
                        particular, a cognizant agency manager told us that
                        measuring the timeliness of processing grievances and
                        disciplinary actions, as well as services provided,
                        would enhance performance measurement.

           Although NRC met many of its human capital-related targets for
           fiscal year 2006, the agency has not fully implemented an
           agreed-upon framework by, for example, integrating its measures
           through a human capital accountability system plan. According to
           its 2004 strategic human capital plan, NRC intended to develop
           such a plan to identify the measures and associated targets that
           NRC would use to assess its achievement of human capital outcomes.
           Program office and OHR managers we interviewed and surveyed cited
           the need for an agreed-upon framework to improve the effectiveness
           and appropriateness of specific measures and targets. In further
           commenting on NRC's measurement framework, some managers cited the
           importance of sufficient linkage between the successful use of
           human capital strategies and meeting safety, security, openness,
           and effectiveness goals. The managers believe reliability and
           validity improvements would help NRC evaluate progress as its
           workforce expands and changes. Specifically, they expressed
           concern that while existing agency measures, intended outputs, and
           targets may be used to monitor progress, they do not enable
           managers to fully evaluate associated progress or performance.
           Without effective measures and appropriate targets, it may be more
           difficult for NRC to gauge workforce trends and use them to inform
           decision making.

           In addition, the managers we interviewed and surveyed had varying
           opinions about specific measures or targets. For example:

           o While NRC exceeded a 75-percent target to retain personnel for a
           minimum of 3 years--reaching over 90 percent--some managers
           suggested that the target should be further examined to determine
           whether the 3-year target correlates with a long-term or career
           commitment because the new generation of workers appears to be
           less inclined than the previous generation to make a longer-term
           commitment to NRC.
           o NRC also exceeded a target of hiring at least 25 percent of
           staff at the entry level--reaching 34 percent, a target originally
           put in place to reduce the NRC employee's average age, according
           to officials. However, some suggested that NRC consider whether
           the target is an appropriate agencywide measure, or would be
           better set at the program office level, given offices' varied
           workforce needs.
           o NRC's overall attrition rate of 6.3 percent for fiscal year 2006
           was higher than its expected 6 percent; the agency lost about 205
           staff, predominantly to retirement. NRC's projected attrition
           rates are 6.25 percent for fiscal year 2008 and 6.5 percent for
           fiscal year 2009. Because NRC slightly underestimated its
           attrition for fiscal year 2006 and the attrition rate projection
           for fiscal year 2008 is lower than the actual fiscal year 2006
           rate, maintaining these projections may underestimate the rate at
           which attrition may rise as nuclear industry competition for
           skilled employees increases and as older staff members retire. As
           a result, some managers believe that projections should
           incorporate a higher estimated attrition rate.
           o Some managers noted both the usefulness of having, and the
           difficulty in attaining, the OPM target of issuing offer letters
           within 45 days after a vacancy announcement closes. NRC reported
           it met this target 67 percent of the time; however, while over 190
           offer letters took at most 45 days, about 65 offer letters took at
           least 100 days to issue. Additionally, one manager stated that the
           45-day time frame is too long for the competitive environment in
           which NRC is hiring.
			  
			  NRC Is Taking Steps to Address Future Uncertainties That Could
			  Adversely Affect Its Overall Workforce Capacity

           NRC is addressing two key uncertainties affecting its emerging
           workforce needs--how to (1) maintain its workforce in the face of
           future competition with the nuclear power industry for critically
           skilled workers and (2) accurately gauge its workload during the
           next 3 years--particularly for reviewing COL applications to
           construct and conditionally operate new reactors. Regarding a
           likely increase in competition with the nuclear industry for
           critically skilled workers, NRC is monitoring the numbers and
           salaries of scientists and engineers in a few key disciplines and
           working more closely with key university programs with the goal of
           strengthening its candidate pipeline. Regarding COL applications,
           although electric power companies have sent letters of intent to
           NRC, stating that they plan to apply for 20 licenses to build and
           operate at least 29 new nuclear power reactors in fiscal years
           2008 and 2009, it is unclear how many of these projects will
           proceed in the near future. Specifically, NRC expects to receive 8
           applications by December 2007, 10 additional applications by the
           end of September 2008, and 2 more by the end of September 2009;
           for each COL application, almost half of the resources required
           would be used in its first year. To reduce uncertainties and
           encourage efficiencies related to its license review process, NRC
           has developed a design-centered approach to standardize its review
           of COL applications for new reactors. However, changes in the
           number and timing of application submissions will affect NRC's
           staffing and resource requirements.
			  
			  NRC Has Taken Steps to Address Broader Challenges It Faces in
			  Sustaining Expertise

           NRC and the nuclear power industry have raised concerns in recent
           years about a shrinking labor pool of critically skilled
           individuals in several workforce areas required for the research,
           design, construction, operations, and oversight of nuclear reactor
           and plant operations. The nuclear power industry estimated in 2001
           that about 90,000 workers will be needed to support existing
           industry operations through 2011.^30 In addition, thousands of
           employees will be needed for the design, licensing, construction,
           and start-up operations of the proposed new reactors.
           Specifically, the nuclear industry faces a potentially critical
           shortage of workers in several fields over the next 5 years.^31

           To keep apprised of industrywide trends and inform its workforce
           assumptions, NRC has contracted with DOE's Oak Ridge Institute for
           Science and Education for over 20 years to gather and evaluate
           occupational, salary, and university enrollment data particularly
           for nuclear engineering and health physics--two mission-critical
           occupations. For example, although university bachelor's and
           master's enrollments and degrees granted in these disciplines have
           increased since 2004, fewer than 700 degrees are granted annually
           from about 60 academic programs nationwide,^32 which is less than
           during the early to mid-1990s. For nuclear engineering, the
           institute also has reported:

           o Overall national trends have improved in terms of enrollment and
           degrees granted. For example, in 2005 total junior, senior, and
           graduate student enrollments surpassed the 2,000 level for the
           first time since the mid-1990s. However, only about 60 percent of
           new graduates directly enter the U.S. civilian labor force, while
           the other 40 percent continue their academic studies, enter
           active-duty military, or take jobs in foreign countries.
           Furthermore, NRC typically requires that applicants be U.S.
           citizens,^33 which further reduces the number of graduating
           candidates eligible for employment, especially at advanced degree
           levels. While a large majority of B.S. degree recipients were U.S.
           citizens, non-U.S. citizens comprised 20 percent of master's
           recipients and 47 percent of Ph.D. recipients in 2005.
           o Because the demand for nuclear engineers is expected to grow
           faster than the supply, upward pressure on starting
           salaries--which increased by only 2 percent in 2004-2005 but by
           over 5 percent in 2005-2006--will continue and provide even more
           competition to employers in the nuclear engineering field.

           For health physicists, the institute has reported:

           o Overall trends have improved in terms of enrollments and degrees
           granted. For example, undergraduate and graduate enrollments were
           15 percent higher than in 2004, and continuing increases are
           expected. The number of health physics-related B.S. degrees
           granted in 2005 increased by over 40 percent from 2004, and at 78
           is the highest reported since 1996; degrees in master's programs
           increased by 20 percent to 77 granted, while Ph.D.s granted
           remained constant. Similar to nuclear physics, while a large
           majority of B.S. degree recipients were U.S. citizens, 30 percent
           of master's and 36 percent of Ph.D. degree recipients were
           non-U.S. citizens.

           o The number of job openings for new graduates will likely
           continue to exceed the number of new graduates available in the
           labor supply from 2006 to 2008 and even with increases in
           enrollments will likely be insufficient to substantially reduce
           projected relative shortages of new graduates between 2006 and
           2008. The institute noted that more health physicists will be
           retiring over the next few years and many, if not most, will have
           to be replaced, as reflected in a higher number of projected job
           openings. NEI also reported that the general availability of
           health physicists is expected to decline over the next 5 years.

           Because the workforce will likely tighten in several areas before
           current graduation levels produce anywhere near the number of
           trained and educated personnel to meet the likely demand over the
           next decade, NRC has taken the following steps to increase its
           talent pool:

           o Has planned to spend nearly $5 million in fiscal year 2007 to
           implement its authority under the Energy Policy Act of 2005 to
           award, in grants to universities and colleges, support for
           educational programs that will benefit its safety, security, and
           environmental responsibilities. During fiscal year 2006, training
           and development program managers worked to develop criteria for
           identifying educational programs for which investments will most
           likely expand expertise in critical skills areas. Implementation
           of this grants-to-universities program is targeted for fiscal year
           2007.
           o Budgeted $225,000 in fiscal year 2006 and proposed $375,000 in
           fiscal year 2007 to offer scholarships and fellowships in critical
           skills areas.
           o Budgeted $125,000 in fiscal year 2006 and proposed $140,000 in
           fiscal year 2007 for student transportation and lodging expenses
           while on temporary assignment to NRC, which managers told us was
           particularly useful in attracting candidates.
           o Integrated and enhanced existing programs to create a program
           for Minority Serving Institutions--historically black colleges and
           universities, Hispanic serving institutions, and tribal colleges
           and universities--that provides financial assistance to programs
           and such activities as mentoring, training, research and
           development, cooperative agreements, fellowships, internships, and
           scholarships. In August 2006, NRC announced plans to link this
           program with its recruiting program and develop relationships with
           recipients of its financial assistance to (1) encourage the
           development of skills and research critical to the agency, (2)
           provide access to educational and career development
           opportunities, and (3) increase the diversity of the job applicant
           pool.

           While NRC has taken these steps, and the nuclear power industry is
           similarly making or continuing efforts to partner with educational
           institutions to develop workers or augment their existing training
           programs, enhancing the talent pool may require additional
           approaches. Besides health physics and nuclear engineering, many
           of the over 300 vacancies--for which NRC posted over 60 position
           descriptions in several occupational series in fiscal year
           2006--require specialized knowledge, skills, and experience that
           will likely continue to be hard to fill or in high demand. These
           include, but are not limited to, areas such as project management,
           reliability and risk analysis, and digital instrumentation and
           control. Quicker and more focused training options include
           intensifying the amount of course detail and/or increasing
           certification or specialization requirements, and further
           developing and executing strategies that capture and transfer the
           significant knowledge of aging workers.
			  
			  NRC Has Taken Several Steps to Prepare for New Reactor Licensing,
			  but the Combined License Review Process Is Untested

           A number of activities that NRC has undertaken to prepare to
           review COL license applications to construct and conditionally
           operate new reactors are in various stages of completion. These
           NRC activities include (1) initiating its Construction Inspection
           Program; (2) moving forward on design certifications and early
           site permit activities; (3) continuing and finalizing the
           development of regulatory guidance, rulemaking, and standard
           review plan materials addressing the contents of a COL
           application. NRC also has developed initial estimates of the
           resources needed to review new reactor license applications. As of
           August 2006, when the Commission approved the creation of the
           Office of New Reactors, fewer than 100 employees were working
           either part- or full-time on new reactor licensing and preparatory
           activities. NRC is in the process of staffing the Office of New
           Reactors with the targeted number of employees scheduled to more
           than double from 230 in late January 2007 to over 480 in October
           2007.^34 (See app. IV for information on NRC's recent
           reorganization efforts.) In addition, NRC has estimated the
           following regarding new reactor licensing work:

           o NRC employees will perform about two-thirds and contractors will
           perform about one-third of the COL review work. In August 2006,
           NRC reported that about $60 million for contracted expertise would
           be required in fiscal year 2008 to acquire the expertise of
           individuals who have (1) very specialized skills that NRC
           personnel do not possess and that is not cost-effective to add
           full time or (2) general engineering expertise that NRC personnel
           possess in insufficient numbers.
           o Given that nearly all applications are expected to be submitted
           in fiscal year 2008, licensing resource needs for new reactors
           would remain the same or increase slightly in fiscal year 2009,
           depending on whether NRC receives more applications, and on their
           timing and number. Industry has advised NRC of the possibility
           that higher than the planned number of applications--20 as of
           November 2006--may eventually be submitted.

           To integrate planned and ongoing activities, NRC is also
           developing a master schedule/project management plan that is to
           match activities to personnel with appropriate skills to scheduled
           completion dates; NRC estimated the plan's completion date is
           early 2007. In addition, in the event that the agency's recruiting
           goals are not met, NRC is developing a procurement contingency
           plan. This plan would enable NRC to acquire technical review
           support from a broad spectrum of organizations. NRC anticipates
           that the upcoming increase in contracting demand for a diverse
           range of skill sets needs may exceed the capabilities or supply of
           any given source. Also, NRC reported that DOE's Office of Science
           laboratories are establishing a team to assist NRC in identifying
           needed technical resources and management skills.

           NRC also has focused its new reactor licensing efforts on
           delineating its standardized design-centered review approach. NRC
           expects this approach will improve the efficiency of its review of
           COL applications by reducing the review time to at most 42 months,
           including holding required public hearings. NRC could not fully
           base its estimates on recent experience or historical data because
           its review process has yet to be tested. However, NRC did evaluate
           the resource requirements for the first three early site permit
           applications it received in 2003 to inform its COL application
           estimates.^35 NRC's review of each early site permit took more
           time and effort than either NRC or the applicants expected. NRC
           managers told us that the agency learned from this initial
           experience and expects future early site permit reviews to go more
           smoothly. They expect a similar learning curve with the first
           group of COL reviews, noting that estimates of the personnel
           needed to review COL applications may thus be subject to some
           adjustment. In addition, because this first group could be
           large--10 applications are expected in the first 6 months of
           fiscal year 2008, and 8 are expected in the second 6 months--any
           challenges, if not fully resolved, could be exacerbated.

           The COL application process is new for the electric power
           companies as well. NRC's staffing and resource estimates are based
           on standardization and consistency and complete, high-quality
           applications. To this end, NRC has established reactor
           design-based working groups with industry to facilitate
           communication and interaction about all aspects of the application
           process, including lessons learned on most recent construction
           activities as well as financing, hardware, supply, and other
           infrastructure issues. Nevertheless, the agency will not know how
           effective these activities have been until applications are
           submitted--NRC expects the first COL applications to be submitted
           in October 2007. In addition, determining the sufficiency of
           additional information NRC requests from a licensee may require
           both significant analytical expertise and review by the agency,
           and timeliness on the part of the applicant. Furthermore, any
           delays in the completion of technical review plans or lack of
           clarity in regulatory guidance could make it more difficult for
           companies to ensure the adequacy of their submissions.^36

           The timing of COL application submissions could also adversely
           influence the intended effectiveness of NRC's design-centered
           review approach. Although NRC documents state that the optimal
           implementation of the approach is to first have a completed design
           certification, many activities will likely occur simultaneously or
           near-simultaneously. Standardization is key to NRC's approach, as
           applicants are expected to submit standard applications that use
           reactor designs that have been certified. This suggests that NRC
           would certify a reactor design before it reviews COL applications
           that refer to that design. That is not the case, however, for 8 of
           the 20 COL applications NRC expects to receive because (1)
           applicants plan to submit 3 COL applications about halfway through
           NRC's certification of the associated design and (2) NRC expects
           to review 5 other COL applications nearly simultaneously with its
           certification of the design.^37

           Similarly, an important component of NRC's approach is the use of
           a "reference application." According to NRC managers and NEI
           executives, around 70 percent of additional application contents
           are intended to be virtually identical to the reference
           application. NRC assumes it will realize FTE/resource savings of
           50 percent on the safety reviews of applications consistent with
           the reference application. However, it is unclear whether the use
           of reference applications will actually save NRC review time when
           they are reviewed concurrently with others. In essence, NRC will
           conduct multiple, nearly simultaneous application reviews for all
           designs that companies currently intend to use. For example, NRC
           expects the reference application and three applications for the
           same design to arrive in the same fiscal quarter. Ultimately,
           because of these compressed time frames, the efficient and
           effective allocation of resources and adherence to schedules is
           paramount.
			  
			  Conclusions

           In recent years, NRC's human capital management has been generally
           effective in comparison with its federal government counterparts.
           Nevertheless, NRC faces a considerable challenge in addressing
           workforce retirements and anticipated significant additional work
           beginning in October 2007, as electric power companies submit
           applications for licenses to construct and operate the next
           generation of nuclear power reactors. Through its strategic human
           capital planning and management framework, NRC has taken several
           important steps to enhance its overall workforce capacity;
           however, some new and in-progress efforts have not yet been
           tested. It is unclear how the confluence of increasing regulatory
           workload demands, maintaining existing focus on safety and
           security activities, rising numbers of retirement-eligible
           employees and other demographic shifts, and anticipated industry
           competition for critically skilled workers will ultimately
           influence NRC's generally positive workforce trends and successes.
           These challenges require a considerable level of flexibility,
           staff commitment, and successful strategic human capital
           management for NRC to be able to appropriately adapt to shifting
           human capital needs. If overall workforce and resource allocations
           are not balanced, NRC risks overextending its available workforce,
           undermining its employee satisfaction, and potentially increasing
           its attrition. If so, reviewing license applications and
           conducting other mission-critical activities within estimated time
           frames could become more difficult and could adversely affect
           NRC's ability to ensure a safe and secure nuclear power industry.
           Furthermore, substantial delays in the license application process
           could adversely affect investor confidence, decrease the
           likelihood of nuclear energy generation being cost beneficial, and
           possibly reduce the amount of electricity available to the U.S.
           market.
			  
			  Recommendations for Executive Action

           To improve NRC's ability to meet its current and future needs for
           a critically skilled workforce, we are recommending that NRC take
           the following four actions:

           o Promote the coordination and integration of human capital
           planning and implementation activities by completing the
           agencywide human capital implementation plan; ensuring that the
           Human Capital Council provides strategic direction, advice, and
           recommendations on addressing human capital issues; and providing
           the appropriate level of resources to implement knowledge
           management program and strategic training and development plan.
           o Systematically assess the effectiveness of NRC's use of tools,
           authorities, and flexibilities for recruiting, developing, and
           retaining its workforce and adjust their use and targeting, as
           necessary, to meet workforce needs.
           o Periodically and comprehensively evaluate and share information
           among NRC's offices on the usefulness of human capital measures,
           intended outputs, and targets to enhance NRC's ability to monitor
           trends, reliably measure progress, and inform program office
           managers in achieving critical human capital tasks.
           o Survey employees during fiscal year 2007 on their satisfaction
           with NRC's human capital program, including new initiatives and
           offices' use of flexibilities to maintain a quality work
           environment.
			  
			  Agency Comments

           We provided NRC with a draft of this report for its review and
           comment. In written comments, NRC generally agreed with the
           report's findings, conclusions, and recommendations, stating that
           they are very constructive. NRC also noted, however, that the
           circumstances underlying the report have changed because
           Congressional leaders have announced their intent to extend the
           Continuing Appropriations Resolution, 2007, for the full fiscal
           year, with few exceptions. According to NRC, the funding in the
           Continuing Resolution--which extends the fiscal year 2006
           appropriation amount to fiscal year 2007--would result in a $95
           million reduction in the level of funding that NRC had expected
           compared with the level approved by the full House of
           Representatives and the Senate Committee on Appropriations for
           fiscal year 2007. NRC states that the funding and FTE restrictions
           under a full-year Continuing Resolution at the fiscal year 2006
           level would have a crippling effect on its ability to manage human
           capital, citing as an example that NRC would significantly
           curtail--and possibly cease--new hiring, except for those already
           given offers and those necessary for the most critical of skills.
           (See app. VI.) In addition, NRC provided comments to improve the
           report's technical accuracy, which we have incorporated as
           appropriate.

           We are sending copies of this report to interested congressional
           committees, the Chairman of NRC, the Director of the Office of
           Management and Budget, and other interested parties. We will also
           make copies 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 staffs have questions about this report, please
           contact me at (202) 512-3841 or [email protected]. Contact points for
           our Offices of Congressional Relations and Public Affairs may be
           found on the last page of this report. GAO staff who made major
           contributions to this report are listed in appendix VII.

           Jim Wells
			  Director, Natural Resources and Environment
			  
^9GAO, Exposure Draft: A Model of Strategic Human Capital Management,
[43]GAO-02-373SP (Washington, D.C.: March 15, 2002).

^10GAO, Diversity Management: Expert-Identified Leading Practices and
Agency Examples, [44]GAO-05-90 (Washington, D.C.: Jan. 14, 2005).

^11Our report entitled Human Capital: Selected Agency Actions to Integrate
Human Capital Approaches to Attain Mission Results, [45]GAO-03-446
(Washington, D.C.: April 11, 2003) found that Human Capital Councils are
among the key actions agencies have taken to integrate human capital
approaches with strategies for accomplishing agency missions. Generally
composed of senior program and human capital managers, councils meet
regularly to (1) review the agency's integration efforts; (2) ensure that
strategies are visible, viable, and relevant; and (3) monitor whether
human capital approaches are well considered, effectively contribute to
outcomes, and are implemented equitably.

^12NRC's 2004 strategic human capital plan called for annual agencywide
human capital implementation plans beginning in October 2005. Each annual
plan would link NRC strategies to its offices' tactical planning for
accomplishing yearly goals.

^13NRC's senior leadership includes its five Commissioners, Executive
Director for Operations, and four Deputy Executive Directors.

^14NRC's Executive Resources Board is responsible for defining and
overseeing succession planning activities. It is chaired by the Executive
Director for Operations and includes the four Deputy Executive Directors
for Operations, the four Regional Administrators, and most of the NRC
office directors.

^15NRC traditionally used yellow paper to distribute official
announcements to establish practices or procedures; introduce changes in
policy, senior staff assignments, or organization; and address major
agencywide events. NRC now maintains these "yellow announcements" on its
intranet.

^16NTEU estimates that 30 to 40 percent of NRC's workforce is eligible for
NTEU membership, of which about 600 regularly pay dues.

^17 [46]GAO-02-373SP .

^18Although Executive Order 13203 (Feb. 17, 2001) revoked Executive Order
12871 (1993), which had directed that federal agencies establish such
partnerships, NRC's Agency Labor-Management Partnership Committee has
continued by mutual agreement of management and NTEU officials. In
addition, several NRC offices have continued their labor-management
partnerships with appropriate union officials.

^19 [47]GAO-04-39 .

^20NRC defines "most critical" skills as knowledge, skills, or abilities
that will be in extreme demand in the specified planning period. Limited
availability of a most critical skill would severely affect an office's
ability to meet business requirements and/or mission demands.

^21NRR's resource estimate model includes activities related to design
certification. The new reactor licensing effort will also require skills
and resources from OHR and the Offices of Administration, General Counsel,
Nuclear Regulatory Research, Information Services, and Nuclear Security
and Incident Response.

^2242 U.S.C. S 2201(d) authorizes NRC to set special pay rates for
scientists and engineers that are higher than many other federal agencies
seeking to attract similar talent. NRC's GG-5 to GG-11 grade levels are
entry-level positions, and GG-13 and above grade levels are midlevel and
upper-level positions.

^23NRC expects to hire about 1,300 employees between fiscal years 2006 and
2009, according to the IG.

^24NRC defines "new gaps" as those of the current fiscal year; "continuing
gaps" as those of the last 2 fiscal years; "long-term gaps" as those of 3
or more fiscal years; and "closed gaps" as those for which the need has
been filled.

^25Direct hire authority enables an agency to hire any qualified
applicant, after public notice is given, without regard to competitive
rating and ranking, veterans' preference, and "rule of three" procedures.
OPM can give direct hire authority to federal agencies when a critical
hiring need or severe shortage of candidates exists. See 5 U.S.C. S
3304(a)(3).

^26Some of the fiscal years 2007 and 2008 funding and new projects have
not been approved.

^27NRC's Federal Employees Pay Comparability Act panel, composed of senior
management officials, must approve the application of this and other
flexibilities.

^28The goals of the human resources line-of-business alignment include
improved management, operational efficiencies, cost savings or avoidance,
and improved customer service.

^29Measuring and monitoring performance is one of four components of NRC's
Planning, Budgeting, and Performance Management process.

^30NEI is working to estimate the number and general types of workers
needed to bring this new generation of reactors and plants to fruition.

^31NEI, Nuclear Energy Industry Initiatives Target Looming Shortage of
Skilled Workers, (Feb. 2006).

^32Oak Ridge Institute for Science and Education, Manpower Assessment
Briefs #58 and #59: Nuclear Engineering and Health Physics Enrollments and
Degrees Surveys, 2005 Data (Oak Ridge, TN: 2005); Labor Market Trends for
Nuclear Engineers through 2010 (Oak Ridge, TN: 2006); and Labor Market
Outlook for Health Physicists: Updated through 2008 (Oak Ridge, TN: 2005).

^33NRC has authority to hire non-citizens. See 42 U.S.C. S 5852. However,
according to NRC managers, the agency's policy is to generally require
U.S. citizenship, citing the cost and time of obtaining a security
clearance as a primary concern. NRC would make an exception to this policy
for highly sought after critical skills.

^34For purposes of this report, the number of employees is equated to FTE
positions on a one-to-one basis. NRC provided estimates both in terms of
the number of employees and FTE positions.

^35An early site permit resolves site safety, environmental protection,
and emergency preparedness issues independent of a specific nuclear plant
design. The early site permit application must address the safety and
environmental characteristics of the site and evaluate potential physical
impediments to developing an acceptable emergency plan.

^36In its October 6, 2006, report entitled Inspector General's Assessment
of the Most Serious Management and Performance Challenges Facing the
Nuclear Regulatory Commission, (OIG-07-A-01), the IG identified the
ability to meet the demand for licensing new reactors as one of nine
challenges. Elements of this challenge include having staff with project
management skills; reinstituting its construction inspection program;
maintaining a defined technical review process; ensuring that its Standard
Review Plan for examining license applications is comprehensive and
consistently implemented; and instituting a process to compile its
regulatory examination into a Safety Evaluation Report that assesses a
plant's ability to operate safely.

^37Applicants generally plan to use the (1) Westinghouse Company's AP 1000
reactor, which NRC has certified; (2) General Electric, Toshiba, and
Hitachi's Advanced Boiling Water Reactor, which NRC has certified; (3)
General Electric's Economic Simplified, Boiling Water Reactor, which NRC
is currently reviewing; or (4) AREVA NP's Evolutionary Pressurized Water
Reactor, which NRC plans to begin reviewing in fiscal year 2008.
			  
			  Appendix I: NRCï¿½s Changing Workforce Demographics

           The demographics of NRC's workforce will substantially change in
           the next few years for two reasons. First, the percentage of
           employees eligible to retire is expected to grow from the current
           level of about 16 percent to about 33 percent of the workforce in
           fiscal year 2010. Second, NRC projects that its workforce size
           will need to grow from about 3,100 employees in early fiscal year
           2006 to nearly 4,000 employees by 2010 to meet the significant
           anticipated upsurge in workload demands as NRC begins to review
           power company applications for permits to construct and operate
           new nuclear reactors. The following tables present information on
           NRC's changing workforce demographics.

           Table 2: Comparison of Selected NRC Workforce Demographics, Fiscal
           Years 2002 through 2006
			  
			  Demographic                As of 9/30/2002 As of 10/2/2004 As of 9/30/2006 
Total employees                      2,928           3,110           3,347 
Selected offices                                                           
Office of Nuclear Reactor                                                  
Regulation                       591 (20%)       593 (19%)       739 (22%) 
Office of Nuclear Security                                                 
and Incident Response              105 (4)         187 (6)         216 (6) 
Office of Administration            98 (3)          98 (3)         123 (4) 
Office of Nuclear                                                          
Materials Safety and                                                       
Safeguards                        332 (11)        334 (11)        334 (10) 
Office of Nuclear                                                          
Regulatory Research                208 (7)         217 (7)         225 (7) 
Employees by age                                                           
Average age                          47.83           47.91           47.60 
Under 40                         576 (20%)       631 (20%)       745 (22%) 
of which 29 and under              164 (6)         225 (7)         313 (9) 
40 to 49                          982 (34)       1002 (32)      1,016 (30) 
50 to 60+                        1370 (47)       1477 (47)      1,586 (47) 
Employees by NRC service                                                   
years                                                                      
Average years                        13.65           13.16           12.29 
0 to 5 years                     747 (26%)     1,013 (33%)     1,311 (39%) 
6 to 10 years                     274 (9%)        265 (9%)       371 (11%) 
11 to 20 years                  1059 (36%)       983 (32%)       802 (24%) 
21 or more years                 848 (29%)       849 (27%)       863 (26%) 
Employees by federal                                                       
service years                                                              
Average years                        17.88           17.27           16.21 
0 to 5 years                     438 (15%)       655 (21%)       895 (27%) 
6 to 10 years                      258 (9)         266 (9)        334 (10) 
11 to 20 years                    937 (32)        883 (28)        801 (24) 
21 or more years                1,295 (44)      1,212 (39)      1,218 (36) 
Employees: Science and engineering occupational series (percentage of
agency total)              
Nuclear Engineering                    14%             13%             12% 
Other Engineering                       29              31              34 
Health Physics                           7               6               6 
Other Physical Science                   5               6               6 
Employees: Engineers, scientists, technical managers, and supervisors
(percentage of office total)
Office of Nuclear Reactor                                                  
Regulation                             80%             81%             82% 
Office of Nuclear Security                                                 
and Incident Response                   54              55              48 
Office of Nuclear                                                          
Materials Safety and                                                       
Safeguards                              78              77              79 
Office of Nuclear                                                          
Regulatory Research                     77              78              80 
Region I                                73              76              75 
Region II                               67              67              68 
Region III                              68              71              73 
Region IV                               69              72              73 
Employees by pay level (percentage of agency total)
Senior level                            8%              8%              7% 
GG-15                                   23              25              25 
GG-14                                   25              25              24 
GG-13                                   18              18              20 
GG-12 to 8                              16              17              16 
GG-7 to 2                               10               8               7 
Entry-level hire ratio                                                     
Agencywide                             41%             25%             34% 
Office of Nuclear Reactor                                                  
Regulation                              40              41              34 
Office of Nuclear Security                                                 
and Incident Response                   18              12              13 
Office of Nuclear                                                          
Materials Safety and                                                       
Safeguards                              75              29              23 
Office of Nuclear                                                          
Regulatory Research                     65              27              60 
Region I                                30              19              50 
Region II                               55              42              36 
Region III                              33              13              38 
Region IV                               20              45              45 

           Source: NRC.

           Note: Percentages may not add to 100 percent due to rounding.

           Table 3: Percentage of the NRC Workforce that Is Eligible to
           Retire, Fiscal Years 2002 through 2011
			  
Optional retirement                                                        
eligibility                As of 9/30/2002 As of 10/2/2004 As of 9/30/2006 
Fiscal year 2002                       15%                                 
Fiscal year 2003                        19                                 
Fiscal year 2004                        23             16%                 
Fiscal year 2005                        27              20                 
Fiscal year 2006                        31              23             16% 
Fiscal year 2007                        36              28              21 
Fiscal year 2008                                        32              24 
Fiscal year 2009                                        37              29 
Fiscal year 2010                                                        33 
Fiscal year 2011                                                        37 

           Source: NRC.

           Note: Actual percentages of NRC's workforce eligible to retire are
           shown for 2002 through 2006. Estimated percentages of NRC's
           workforce eligible to retire are shown for 2007 through 2011.

           Table 4: Employees Who Left NRC, Fiscal Years 2002 through 2006
			  
Permanent attrition Number Percent^a 
Fiscal year 2002       146       5.1 
Fiscal year 2003       149       5.0 
Fiscal year 2004       161       5.1 
Fiscal year 2005       189       6.0 
Fiscal year 2006       205       6.3 

           Source: NRC.

           aAttrition percentages are annualized.
			  
			  Appendix II: Scope and Methodology

           To assess the extent to which the Nuclear Regulatory Commission
           (NRC) has aligned its human capital planning framework with its
           strategic mission and programmatic goals, we analyzed a broad
           range of NRC policy, planning, and implementation documents and
           reviewed key performance budget and performance and accountability
           documents and reports. Specifically, we examined information on
           NRC's operations and strategic planning efforts, including
           agencywide strategic plans and program documents, operating and
           human capital management plans, management directives, select
           internal analyses and communications of human resources personnel,
           Human Capital Council and Communications Council meeting minutes,
           and the NRC Inspector General's Safety Culture and Climate Survey
           results for 1998, 2002, and 2005.

           We corroborated information provided in these documents in
           interviews with human resources managers in NRC's headquarters and
           regional offices. We also interviewed cognizant managers in NRC's
           Office of Human Resources (OHR); program offices including Nuclear
           Reactor Regulation (NRR), Nuclear Regulatory Research, Nuclear
           Materials Safety and Safeguards, and Nuclear Security and Incident
           Response; and NRC's four regional offices--region I in King of
           Prussia, Pennsylvania; region II in Atlanta, Georgia; region III
           in Lisle, Illinois; and region IV in Arlington, Texas. We visited
           regions I and II as well as NRC's Technical Training Center in
           Chattanooga, Tennessee.

           To assess the extent to which NRC is effectively recruiting,
           developing, and retaining critically skilled personnel, we applied
           the five strategic workforce planning principles presented in our
           March 2002 exposure draft on a model for strategic human capital
           management and in our December 2003 report on key principles for
           effective strategic workforce planning. (See the Related GAO
           Reports section at the end of this report for a list of previous
           reports that we have issued on NRC and strategic workforce
           planning and human capital management.) We also reviewed the
           Office of Personnel Management's (OPM) Human Capital Assessment
           and Accountability Framework and related guidance. In doing so, we
           analyzed NRC's (1) workforce and demographics data; (2) critical
           skills information, including needs and gap assessments; (3)
           implementation of its recruiting, hiring, training and
           development, and retention strategies and plans; (4)
           implementation of new systems, programs, and processes that
           support human capital management and planning; and (5) measures of
           its progress and results. In addition, we analyzed NRC's
           reorganization plans, program plans, and human capital budget and
           flexibilities data. Furthermore, OHR and technical training center
           personnel provided demonstrations on the Strategic Workforce
           Planning system database and Recruitment Activity Tracking System.

           We also examined data obtained from the Federal Personnel Payroll
           System, NRC's Human Resource Management System, and NRC's
           Recruitment Activity Tracking System. In addition, we obtained
           budget and outlay data from NRC's Chief Financial Officer and OHR.
           To assess the reliability of the data needed to answer the
           engagement objectives, we checked these data for obvious errors in
           accuracy and completeness, reviewed existing information about
           these data and the system that produced them, and interviewed
           agency officials knowledgeable about these data. We determined
           that these data were sufficiently reliable for the purposes of
           this report.

           To gain more insight into NRC's use of human capital
           flexibilities, authorities, tools, measures, and targets, we
           surveyed 45 Senior Executive Service and GG-15 level managers in
           11 NRC offices, including OHR, technical program offices, and
           regional offices who represent strategic human management and
           leadership in offices with large components of critically skilled
           personnel. We obtained responses from 32 of 45 NRC managers, a
           response rate of 71 percent. The questionnaire asked respondents
           to rate the value of human capital flexibilities, authorities,
           tools, and programs that NRC uses in hiring, developing, and
           retaining personnel, and their value in the future. We also asked
           the managers to rate the effectiveness and appropriateness of
           measures and metrics in monitoring and evaluating progress in
           achieving programmatic goals at the agencywide and office levels.

           The practical difficulties of conducting any survey may introduce
           certain types of errors, commonly referred to as "nonsampling
           errors." For example, differences in how a particular question is
           interpreted, the sources of information available to respondents,
           or the types of people who do not respond can introduce unwanted
           variability into survey results. To reduce nonsampling errors, we
           conducted four pretests with respondents to ensure that questions
           and response categories were interpreted in a consistent manner
           and revised the instruments on the basis of the pretest results.

           To assess the extent to which NRC is taking steps to address
           future uncertainties that could adversely affect its overall
           workforce capacity, we examined (1) the existing and future
           engineering, science, and technology labor pool and (2) NRC's new
           reactor licensing activities. Regarding the labor pool, we
           reviewed reports provided to NRC by the Department of Energy's Oak
           Ridge Institute for Science and Education and the Nuclear Energy
           Institute (NEI), which represents the nuclear industry. We also
           examined NRC's efforts to develop a "pipeline" of critically
           skilled personnel and its need for any new flexibilities and
           authorities and interviewed NRC managers and NEI executives about
           the supply and demand for workers with skills critical for
           fulfilling NRC's mission. Regarding NRC's new reactor licensing
           activities, we reviewed resource estimate model documents and
           planning documents and updates. We interviewed managers in NRR and
           the recently established Office of New Reactors.

           We conducted our work from March 2006 through December 2006 in
           accordance with generally accepted government auditing standards.
			  
			  Appendix III: New Reactor Licensing

           Prior to beginning construction, electric power companies are
           required to obtain a license from NRC to build and operate a new
           nuclear reactor or plant. In the past, NRC had a two-step process
           that required companies to obtain a permit to build a nuclear
           power plant and then to obtain a license to operate the plant once
           construction was completed. In 1989, in response to the nuclear
           power industry's concerns about the significant delays and added
           costs associated with NRC's review of construction and operating
           license applications, NRC revised its licensing process to make it
           quicker and more predictable, with designs less subject to
           midconstruction, safety-related changes. Specifically, NRC
           combined construction permits and operating licenses into a single
           combined license (COL) and created two new licenses--design
           certifications and early site permits--in 10 C.F.R. Part 52. A COL
           authorizes the licensee to construct and conditionally operate a
           nuclear power plant. In addition, NRC has formulated a
           design-centered review approach (DCRA), which is based on the
           concept of industry standardization of COL applications
           referencing a particular design. According to NRC, standardized
           applications would allow the staff, to the maximum extent
           practical, to use a "one issue, one review, one position" strategy
           to optimize the staff's review effort, the resources needed to
           perform reviews, and the review schedules.

           Under Part 52, plant designs are standardized through design
           certifications. NRC reviews the design, limits on operation, and
           safety of a particular design; resolves any issues that arise; and
           then certifies the design through a rule-making process. One goal
           of the rule-making process is to establish stable plant designs
           that are not subject to major modifications during the COL
           application process. This provides more certainty to the applicant
           and allows NRC to use a single design review to support multiple
           COL applications. A COL application is a detailed description of
           the proposed plant's design, operations, site, and environmental
           impact. Once a design is certified, COL applicants can refer to
           the associated design certification in their applications and do
           not have to resubmit the information contained in the
           certification. COL applicants are not required to reference a
           design certification, but would then have to submit the design
           information that would otherwise be in a certification. Another
           component of the DCRA is the "reference application," which
           encourages applicants to use a standard application. Applicants
           work with the reactor's vendor--for example, Westinghouse or
           General Electric--to develop a model application that subsequent
           applicants will use as the basis for their applications. NRC
           managers and NEI representatives estimate that 65 to 75 percent of
           the information in additional applications will be identical to
           the associated reference application. NRC managers stated that
           each design under consideration will have a reference application.
           NRC encourages applicants to use reference applications, but they
           are not required to do so.

           The one aspect not standardized in Part 52 and the DCRA is
           site-specific factors. Applicants must submit information and
           assessments that address the safety, environmental impact, and
           emergency plans of a proposed site. Applicants have the option of
           providing that information through submitting an early site
           permit, which allows potential COL applicants to evaluate the
           suitability of a given site without going through the full COL
           application process. Once issued, an applicant can reference an
           early site permit in its COL application and does not have to
           resubmit the site information. Although COL applicants are not
           required to reference an early site permit, if that review is not
           previously conducted, the company would then have to submit the
           site information that would otherwise be in an early site permit
           in the COL application.
			  
			  Design Certifications

           NRC has certified four reactor designs to date, two of which
           electric power companies selected in fiscal year 2006 for their
           intended COL applications--the AP1000 and the Advanced Boiling
           Water Reactor (ABWR). As of December 2006, companies had signaled
           their intent to use two other designs--the Evolutionary
           Pressurized Water Reactor (EPR) and the Economic Simplified,
           Boiling Water Reactor (ESBWR).^1 On the basis of previous
           experience, NRC estimates that new design certifications will take
           about 30 months and require 120 full-time equivalent (FTE)
           positions. For each reactor design, table 5 identifies the vendor,
           certification status, and potential number of COL applications
           that plan to use this design.

           Table 5: Status of Reactor Design Certification, December 2006
			  			  
			                                                                      Number of 
                                       Design certification     potential COL 
Reactor design     Vendor           status                    applications 
System 80+         Westinghouse     Certified                            0 
ABWR               General          Certified                            2 
                      Electric,                                               
                      Hitachi, Toshiba                                        
AP600              Westinghouse     Certified                            0 
AP1000             Westinghouse     Certified                            6 
ESBWR              General Electric Review in progress                   3 
EPR                AREVA NP         Certification review                 5 
                                       expected to begin in                   
                                       fiscal year 2008                       
USAPWR             Mitsubishi       Certification review                 0 
                                       expected to begin in                   
                                       fiscal year 2008                       
Pebble-Bed Modular Eskom            Precertification                     0 
Reactor                                                                    
International      Westinghouse     Precertification                     0 
Reactor Innovative                                                         
and Secure                                                                 
Total                                                                   16 

           Source: NRC.
			  
			  Combined Licenses

           Electric power companies have submitted letters of intent to NRC,
           stating that they plan to apply for 20 licenses to build and
           operate at least 29 new nuclear power reactors in fiscal years
           2008 and 2009. NRC estimates that COL applications will take
           approximately 30 months for the technical review--additional
           review time and staff resources will be needed for applications
           that do not reference a certified design. Reference applications
           that reference an early site permit are expected to require
           approximately 68 FTEs, whereas subsequent applications are
           estimated to require approximately 38 FTEs. NRC estimates that
           reference applications that do not reference an ESP will require
           83 FTEs, whereas subsequent applications are estimated to require
           approximately 53 FTEs. For the 20 expected COL applications,
           figure 2 identifies the site locations, reactor design, electric
           power companies or consortia, and number of units.

           Figure 2: Twenty Potential COL Applications, as of December 2006

           aApplication is expected to reference an early site permit.
			  
^1In December 2005, NRC docketed for review General Electric's design
certification application for its ESBWR.
			  
			  Appendix IV: Time Line of NRCï¿½s Workforce Reorganizations

           Since August 2005, NRC has announced several plans to reorganize
           and restructure its workforce. Previous actions since 2002 include
           the creation of the Office of Nuclear Security and Incident
           Response (NSIR) to consolidate security, incident response, and
           emergency preparedness. As of December 2006, NRC made
           announcements to take the following actions:

           o August 2005: NRC announced plans to reorganize NRR to (1)
           prepare for the increase in the new reactor licensing workload,
           (2) better align the organization for risk informed regulation,
           and (3) reduce a layer of executive management to allow an
           increase in the number of supervisors. In part, the reorganization
           created the Division of New Reactor Licensing; its implementation
           was effective October 30, 2005.
           o October 2005: NSIR established a New Reactor Security Team in
           its Division of Security Policy devoted solely to new reactor
           security licensing. In addition, as of September 2006, the
           Division of Preparedness approved realignment consistent with that
           of other divisions in NSIR.
           o November 2005: The Commission approved the reorganization of
           NSIR to (1) better align and manage the organization consistent
           with the scope and complexity of current and emergent nuclear
           security work, (2) enhance organizational effectiveness, (3)
           improve the supervisory span of control, and (4) restructure the
           organization consistent with the agency's current human capital
           management strategy and goals. The reorganization split the
           Division of Nuclear Security into two divisions: the Division of
           Security Policy and the Division of Security Operations, each
           having two deputy directors. Included in the approved
           reorganization is a new division-level structure with five to six
           branches reporting to each division, with multiple teams. The
           reorganization was implemented on February 19, 2006.
           o April 2006: The Commission approved the initial approach to
           NRC's Construction Inspection Program, which creates a dedicated
           organization with total responsibility for the execution of all
           construction inspection activities across the country, and
           approved its location in region II's offices in Atlanta, Georgia.
           In July 2006, the Commission approved the creation of a Deputy
           Regional Administrator for Construction in region II. The
           organization began operations on October 1, 2006.
           o April 2006: NRC's Office of General Counsel implemented a
           reorganization to provide increased focus and attention to new
           reactor licensing, creating a Division of New Reactor Programs.
           o July 2006: NRC announced plans to reorganize its Nuclear
           Materials Safety and Safeguards and Office of State and Tribal
           Programs to combine activities that deal primarily with materials
           licensing, rulemaking and decommissioning under a new Office of
           National Materials. Nuclear Material Safety and Safeguards'
           responsibilities include the nuclear fuel cycle's processing,
           transportation, and spent fuel storage and disposal. The
           reorganization was implemented on October 1, 2006.
           o August 2006: The Commission approved the creation of the Office
           of New Reactors, in response to dramatic growth in this program
           and to improve the span of control and organizational focus on new
           reactor licensing, while ensuring that appropriate focus is
           maintained on the safety of operating reactors. The Office of New
           Reactors is to be initially staffed with about 230 personnel by
           January 2007, and about 440 by July 2007.^1 Five NRR branches are
           expected to migrate to the Office of New Reactors, including
           reactor planning and scheduling, reactor infrastructure guidance
           development, reactor environmental projects, and two branches
           associated with three reactor designs.

           In addition to these actions, as of August 2006 the Office of
           Administration had added procurement, space management, and
           regulatory support staff; reorganized its Division of Facilities
           and Security; and was planning to reorganize the Division of
           Contracts to support the growth in new reactor licensing work.
			  
^1NRC is maintaining a level of flexibility in its staffing plan so that
adjustments can be made as the staff gains experience in performing new
reactor licensing reviews, according to NRC managers.
			  
			  Appendix V: NRCï¿½s Use of Human Capital Flexibilities, Authorities,
			  Tools, and Programs

           NRC carries out many of its human capital programs under the
           authority of section 161(d) of the Atomic Energy Act of 1954.^1
           While section 161(d) directs NRC to comply with classification and
           associated pay provisions of Title 5 of the United States Code,
           NRC is authorized to depart from them to the extent necessary to
           discharge its responsibilities, within certain prescribed limits.
           This authority allows NRC flexibility in various areas, such as
           recruitment and retention incentives, details to other positions
           in the agency, and setting pay for entry-level scientific and
           technical personnel. Some of NRC's human capital programs are
           authorized under laws that also apply to other federal agencies,
           such as the Federal Workforce Flexibility Act of 2004^2 and
           certain provisions of Title 5.^3 The Energy Policy Act of 2005^4
           gave NRC additional human capital flexibilities. In August 2006,
           32 of the 45 NRC managers we surveyed assessed the value of each
           of these flexibilities, authorities, tools, and programs (referred
           to as flexibilities) in recruiting, hiring, developing, and
           retaining employees. Table 6 shows the number of survey
           respondents who rated each of NRC's flexibilities as "very to
           extremely valuable," or "not at all to moderately valuable," or
           "do not use."

Table 6: NRC Managers' Assessment of the Use of Human Capital
Flexibilities, Authorities, Tools, and Programs

                                                    Number of respondents, by
                                                         rating category
                                                               Not at all     
Flexibility,                                        Very to         to  Do 
authority, tool, or                               extremely moderately not 
program                Definition                  valuable   valuable use 
Advances in pay        Used for newly appointed          12          8  10 
                          employees, advance                                  
                          payment of basic pay for                            
                          no more than two pay                                
                          periods. Typically is                               
                          used for recent college                             
                          graduates to assist in                              
                          moving to a new location                            
                          and associated costs.                               
Awards                 Cash awards, honorary             28          4   0 
                          awards, informal                                    
                          recognition awards, and                             
                          time-off awards may be                              
                          given to federal                                    
                          employees to recognize                              
                          employee and group                                  
                          performance.                                        
Childcare on-site,     An on-site childcare              15          7  10 
headquarters           center to provide                                   
                          employees with the                                  
                          opportunity to balance                              
                          career and family.                                  
Childcare tuition      Appropriated funds (from           8         10  10 
assistance             salaries and expenses)                              
                          used to assist lower                                
                          income employees with the                           
                          costs of child care.                                
Cooperative Program    A formally structured             24          8   0 
(Student Career        program for college or                              
Experience Program)    university students                                 
                          pursuing undergraduate or                           
                          graduate degrees that                               
                          allows them to alternate                            
                          semesters of work and                               
                          study.                                              
Details                A personnel action that           21         10   0 
                          temporarily assigns                                 
                          employees in 120-day                                
                          increments to other                                 
                          positions within the                                
                          agency. This provides                               
                          additional work                                     
                          experience and exposure                             
                          for the employee.                                   
Differing Professional An internal NRC program           16         15   0 
Opinions Program       that seeks to engender an                           
                          environment in which                                
                          employees feel                                      
                          comfortable contributing                            
                          alternative professional                            
                          theories or opinions and                            
                          are safe from                                       
                          retaliation.                                        
Direct hire authority  An OPM-granted authority          16          2  13 
                          that expedites the hiring                           
                          process. This authority                             
                          currently is not                                    
                          available to NRC.                                   
Early replacement      Typically used with               27          5   0 
hiring (double         employees who plan to                               
encumbering)           retire. Allows NRC to                               
                          hire someone for a                                  
                          position not yet vacated                            
                          to ensure the continuity                            
                          of critical skills.                                 
Employee assistance    Provides a range of               21         10   0 
program                confidential services,                              
                          including counseling and                            
                          referrals, to employees                             
                          experiencing such                                   
                          personal problems as work                           
                          and family pressures;                               
                          substance abuse; or                                 
                          financial problems that                             
                          can adversely affect                                
                          performance, reliability,                           
                          and personal health.                                
Developmental          Internal rotations and/or         26          6   0 
assignments and        developmental assignments                           
employee rotations     that allow employees to                             
                          work in another office or                           
                          position on a temporary                             
                          basis as well as to fill                            
                          workforce gaps.                                     
Employment of          The excepted service              23          8   1 
experts/consultants    appointment is used to                              
                          hire experts and                                    
                          consultants to perform                              
                          expert or consultant work                           
                          that is temporary (not to                           
                          exceed 1 year) or                                   
                          intermittent.                                       
Fitness center         An on-site fitness center         13          8   9 
on-site, headquarters  with gym equipment,                                 
                          nutritional counseling,                             
                          and health programs to                              
                          promote work/life                                   
                          balance.                                            
Flexible and           Allow variations in               27          4   0 
compressed work        starting and ending times                           
schedules              or allow employees to                               
                          complete the basic                                  
                          80-hour biweekly work                               
                          requirement in fewer than                           
                          10 workdays.                                        
Formal training and    NRC has a training and            31          1   0 
development            development program that                            
                          incorporates external and                           
                          internal training,                                  
                          self-paced learning, and                            
                          formal developmental and                            
                          qualification programs.                             
Graduate fellowship    A developmental program           15         13   3 
program                used to recruit, retain,                            
                          and develop technical                               
                          experts through                                     
                          experience and advanced                             
                          degrees in specialized                              
                          engineering and                                     
                          scientific disciplines.                             
                          Entails a minimum 9-month                           
                          period of work at NRC,                              
                          pursuit of a graduate                               
                          education, and permanent                            
                          return to the agency in a                           
                          position that uses the                              
                          learning gained through                             
                          graduate study.                                     
Grants to schools      Authorized in the Energy           4         10  16 
                          Policy Act of 2005.                                 
                          Allows the agency to                                
                          provide grants to                                   
                          universities and college                            
                          with programs and                                   
                          research that support                               
                          NRC's mission.                                      
Healthcare on-site,    An on-site health clinic          18          8   5 
headquarters           staffed with nurses and a                           
                          doctor to promote                                   
                          work/life balance.                                  
Honor Law Graduate     A 2-year program for              13          2  16 
Program                graduating law students                             
                          or judicial law clerks                              
                          with high academic                                  
                          credentials featuring                               
                          6-month rotations through                           
                          different divisions in                              
                          the Office of General                               
                          Counsel and additional                              
                          training.                                           
Implementation of      NRC has the authority to          25          5   0 
federal leave programs administer leave and                                
                          excused absences, with                              
                          regard to NRC work                                  
                          requirements and the                                
                          concerns of individual                              
                          employees. For example,                             
                          NRC can grant employees                             
                          annual leave at the                                 
                          beginning of the year or                            
                          advanced sick leave in                              
                          appropriate situations or                           
                          accommodate employees'                              
                          personal needs through                              
                          leave programs.                                     
Intergovernmental      Temporary (e.g., 2-year)           1         21   7 
Personnel Act          assignments from and to                             
assignments            state and local                                     
                          governments, colleges and                           
                          universities, tribal                                
                          governments, and other                              
                          not-for-profit                                      
                          organizations made for                              
                          the mutual benefit of the                           
                          federal government and                              
                          the nonfederal entity.                              
Knowledge management/  NRC's framework to                24          8   0 
knowledge transfer     integrate new and                                   
                          existing approaches for                             
                          generating, capturing,                              
                          and transferring                                    
                          knowledge relevant to the                           
                          agency's mission.                                   
Leadership Potential   A 12-month, part-time             29          3   0 
Program                program to prepare                                  
                          employees for team leader                           
                          and supervisory roles, or                           
                          other positions requiring                           
                          supervisory, managerial,                            
                          and leadership skills.                              
Nuclear Safety         A 2-year developmental            31          1   0 
Professional           program, open to                                    
Development Program    entry-level applicants                              
                          with high academic                                  
                          credentials, featuring                              
                          structured coursework,                              
                          formal and informal                                 
                          training events, and                                
                          tailored developmental                              
                          assignments to expose                               
                          participants to the range                           
                          of regulatory activities                            
                          NRC performs.                                       
Other special          Special employment                10          9  10 
employment             programs to facilitate                              
                          the recruitment of highly                           
                          qualified candidates from                           
                          diverse backgrounds to                              
                          fill a wide variety of                              
                          positions and job                                   
                          training opportunities                              
                          within the agency.                                  
Part-time employment   A part-time work schedule         15         15   1 
                          that requires an employee                           
                          to work at least 16                                 
                          hours, but no more than                             
                          32 hours, weekly. It is                             
                          typically used to retain                            
                          employees with critical                             
                          skills who may otherwise                            
                          leave the agency.                                   
Pay setting authority  This authority allows NRC         23          5   3 
                          to set pay within limits                            
                          prescribed by its                                   
                          statute. This authority                             
                          is currently used to set                            
                          pay, for example, for                               
                          entry-level science and                             
                          engineering applicants                              
                          and resident inspectors.                            
Recruitment incentives Subject to management             29          3   0 
                          approval, bonuses of up                             
                          to 25 percent of                                    
                          employee's pay are                                  
                          available to recruit                                
                          highly qualified and                                
                          competitive candidates.                             
Recruitment            Giveaway items used to             6         26   0 
tokens/giveaways       promote NRC at recruiting                           
                          events.                                             
Re-employed annuitants Used to obtain staff with          a          a   a 
                          knowledge, skills and                               
                          abilities that would                                
                          otherwise be difficult to                           
                          obtain. This tool allows                            
                          the agency to rehire, at                            
                          full salary, employees                              
                          who have retired from                               
                          civil service.                                      
Referral awards        The referral award                14         16   1 
                          provides employees with a                           
                          monetary award if                                   
                          candidates referred to                              
                          NRC are hired.                                      
Relocation incentives  One-time bonuses up to 25         29          3   0 
                          percent of basic pay that                           
                          are offered to relocate                             
                          new or existing employees                           
                          in difficult-to-fill                                
                          positions.                                          
Retention incentives   Authorized additional             14         13   5 
                          percentage of pay to                                
                          retain employees with                               
                          knowledge, skills, or                               
                          abilities that would                                
                          otherwise be difficult to                           
                          fill.                                               
Salary exceptions      Special pay flexibility           24          6   2 
                          to appoint employees with                           
                          superior qualification to                           
                          a higher step rate above                            
                          the first step of their                             
                          grade.                                              
Schedule variations    Alteration of work                15         11   3 
for training           schedules to accommodate                            
                          training.                                           
Scholarship and        Scholarships or                   10          5  14 
Fellowship for Service fellowships available to                            
                          students pursuing degrees                           
                          in a field of study that                            
                          is a mission-critical                               
                          skill area--contingent                              
                          upon an agreed period of                            
                          service at NRC.                                     
Service credit for     Allows the agency to              23          4   3 
annual leave           grant a newly appointed                             
                          or reappointed employee                             
                          credit for prior work                               
                          experience that would                               
                          otherwise not be                                    
                          creditable for the                                  
                          purpose of determining                              
                          the employee's annual                               
                          leave accrual rate.                                 
Senior Executive       A program providing high          29          3   0 
Service Candidate      potential GG-14 and above                           
Development Program    employees with training                             
                          and developmental                                   
                          activities that prepare                             
                          them for future positions                           
                          as senior executives                                
                          within the agency.                                  
Special rate schedules Under its statutory               19          9   3 
or administratively    authority, NRC can                                  
determined rates       establish rates for                                 
                          scientific and technical                            
                          positions above the                                 
                          regular general schedule                            
                          rates, within prescribed                            
                          limits. (See also pay                               
                          setting authority.)                                 
Student loan           An incentive authorizing          21         10   1 
repayments             the repayment of student                            
                          loans.                                              
Summer hire program    Through this program,             24          8   0 
(Student Temporary     college and high school                             
Employment Program)    students have the                                   
                          opportunity to work at                              
                          NRC--typically during the                           
                          summer to gain exposure                             
                          to career opportunities                             
                          at the agency.                                      
Lodging and            In some cases, NRC may            20          9   3 
transportation         offer to pay lodging,                               
expenses for student   transportation, and                                 
employees              subsistence expenses for                            
                          students working for the                            
                          agency, through the                                 
                          Student Temporary                                   
                          Employment Program and                              
                          the Student Career                                  
                          Experience Program.                                 
Team Leader            A part-time program that           b          b   b 
Development Program    typically lasts 12 months                           
                          to develop the agency's                             
                          team leaders for                                    
                          supervisory or other                                
                          positions requiring                                 
                          supervisory, managerial,                            
                          and leadership skills and                           
                          abilities, with training                            
                          and development                                     
                          opportunities comparable                            
                          to the Leadership                                   
                          Potential Program.                                  
Telecommuting          A recruitment and                 17         15   0 
(telework)             retention tool that                                 
                          provides some employees                             
                          with flexible work                                  
                          arrangements.                                       
                          Telecommuting can occur                             
                          on a project-based or                               
                          fixed schedule, from home                           
                          or through an official                              
                          Federal Telecommuting                               
                          Center.                                             
Undergraduate          This program provides             12          6  13 
Scholarship Program    tuition, fees, and books                            
                          for a limited number of                             
                          college seniors who                                 
                          participated in NRC's                               
                          Cooperative Program and                             
                          obligates recipients to a                           
                          specified period of                                 
                          employment with NRC.                                
Visiting fellows       Used to supplement NRC             3         11  15 
                          expertise in medicine,                              
                          health physics,                                     
                          engineering, and other                              
                          professional (e.g.,                                 
                          legal) and scientific                               
                          disciplines by employing                            
                          visiting fellows who can                            
                          contribute to NRC's                                 
                          mission.                                            
Voluntary leave        Allows other federal              16         15   0 
transfer               employees to donate                                 
                          annual leave to an                                  
                          employee who has a                                  
                          personal or family                                  
                          medical emergency and who                           
                          has exhausted his or her                            
                          own leave.                                          
Voluntary Separation   Voluntary Separation              11         17   3 
Incentive Payments and Incentive Payments and                              
Voluntary Early        Voluntary Early                                     
Retirement Authority   Retirement Authority help                           
                          agencies complete major                             
                          downsizing with minimal                             
                          workforce disruption.                               
Waiver of dual         Using this authority, NRC         23          4   4 
compensation           can waive the salary                                
limitations            "offset" required when                              
                          reemploying retired                                 
                          Federal employees who                               
                          receive a federal                                   
                          pension.                                            
Waiver of time in      Director of OHR may               11         16   4 
grade                  approve exceptions to the                           
                          rate of promotion upon                              
                          written request by office                           
                          directors or regional                               
                          administrators.                                     

^142 U.S.C. S 2201(d).

^2Pub. L. No. 108-411.

^3For example, 5 U.S.C. S 5524a (authorizing advances in pay for newly
appointed employees, 5 U.S.C. S 4503 (authorizing cash awards), and 5
U.S.C. S 3109 (authorizing employment of experts and consultants).

^4Pub. L. No. 109-58.

Source: Results of GAO survey of 32 NRC managers.

Note: Responses may not total 32 because some managers did not respond to
every question.

aNRC discontinued use of this flexibility in 2006 in favor of the pension
offset waiver.

bNRC began this program in 2006.

Appendix VI: Comments from the Nuclear Regulatory Commission

Appendix VII: GAO Contact and Staff Acknowledgments

GAO Contact

Jim Wells, (202) 512-3841 or [email protected]

Staff Acknowledgments

In addition to the individual named above, Richard Cheston (Assistant
Director), Sarah J. Lynch, Katherine Hudson Walker, Nancy Crothers,
Brandon Booth, William Doherty, Cindy Gilbert, and Doreen Feldman made key
contributions to this report.

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Nuclear Power Plants: Efforts Made to Upgrade Security, but the Nuclear
Regulatory Commission's Design Basis Threat Process Should Be Improved.
[49]GAO-06-388 . Washington, D.C.: March 14, 2006.

Nuclear Regulatory Commission: Challenges Facing NRC in Effectively
Carrying Out Its Mission. [50]GAO-05-754T . Washington, D.C.: May 26,
2005.

Nuclear Regulatory Commission: Preliminary Observations on Efforts to
Improve Security at Nuclear Power Plants. [51]GAO-04-1064T . Washington,
D.C.: September 14, 2004.

Nuclear Regulation: NRC Needs to More Aggressively and Comprehensively
Resolve Issues Related to the Davis-Besse Nuclear Power Plant's Shutdown.
[52]GAO-04-415 . Washington, D.C.: May 17, 2004.

Nuclear Regulatory Commission: Oversight of Security at Commercial Nuclear
Power Plants Needs to Be Strengthened. [53]GAO-03-752 Washington, D.C.:
September 4, 2003.

Nuclear Regulatory Commission: Status of Achieving Key Outcomes and
Addressing Major Management Challenges. [54]GAO-01-760 . Washington, D.C.:
June 29, 2001.

Nuclear Regulation: Challenges Confronting NRC in a Changing Regulatory
Environment. [55]GAO-01-707T . Washington, D.C.: May 8, 2001.

Major Management Challenges and Performance Risks: Nuclear Regulatory
Commission. [56]GAO-01-259 . Washington, D.C.: January 2001.

Strategic Workforce Planning and Human Capital Management

Defense Space Activities: Management Actions Are Needed to Better
Identify, Track, and Train Air Force Space Personnel. [57]GAO-06-908 .
Washington, D.C.: September 21, 2006.

The Federal Workforce: Additional Insights Could Enhance Agency Efforts
Related to Hispanic Representation. [58]GAO-06-832 . Washington, D.C.:
August 17, 2006.

Special Operations Forces: Several Human Capital Challenges Must Be
Addressed to Meet Expanded Role. [59]GAO-06-812 . Washington, D.C.: July
31, 2006.

Securities and Exchange Commission: Some Progress Made on Strategic Human
Capital Management. [60]GAO-06-86 . Washington, D.C.: January 10, 2006.

International Trade: USTR Would Benefit from Greater Use of Strategic
Human Capital Management Principles. [61]GAO-06-167 . Washington, D.C.:
December 6, 2005.

Department of Homeland Security: Strategic Management of Training
Important for Successful Transformation. [62]GAO-05-888 . Washington,
D.C.: September 23, 2005.

Human Capital: Selected Agencies Have Opportunities to Enhance Existing
Succession Planning and Management Efforts. [63]GAO-05-585 . Washington,
D.C.: June 30, 2005.

Human Capital: Agencies Need Leadership and the Supporting Infrastructure
to Take Advantage of New Flexibilities. [64]GAO-05-616T . Washington,
D.C.: April 21, 2005.

Human Capital: Selected Agencies' Statutory Authorities Could Offer
Options in Developing a Framework for Governmentwide Reform.
[65]GAO-05-398R . Washington, D.C.: April 21, 2005.

National Nuclear Security Administration: Contractors' Strategies to
Recruit and Retain a Critically Skilled Workforce Are Generally Effective.
[66]GAO-05-164 . Washington, D.C.: February 2, 2005.

Diversity Management: Expert-Identified Leading Practices and Agency
Examples. [67]GAO-05-90 . Washington, D.C.: January 14, 2005.

Human Capital: Principles, Criteria, and Processes for Governmentwide
Federal Human Capital Reform. [68]GAO-05-69SP . Washington, D.C.: December
2004.

Human Capital: Increasing Agencies' Use of New Hiring Flexibilities.
[69]GAO-04-959T . Washington, D.C.: July 13, 2004.

Human Capital: Key Practices to Increasing Federal Telework.
[70]GAO-04-950T . Washington, D.C.: July 8, 2004.

Human Capital: Status of Efforts to Improve Federal Hiring.
[71]GAO-04-796T . Washington, D.C.: June 7, 2004.

Human Capital: A Guide for Assessing Strategic Training and Development
Efforts in the Federal Government. [72]GAO-04-546G . Washington, D.C.:
March 2004.

Human Capital: Selected Agencies' Experiences and Lessons Learned in
Designing Training and Development Programs. [73]GAO-04-291 . Washington,
D.C.: January 30, 2004.

Human Capital: Key Principles for Effective Strategic Workforce Planning.
[74]GAO-04-39 . Washington, D.C.: December 11, 2003.

Human Capital: Succession Planning and Management Is Critical Driver of
Organizational Transformation. [75]GAO-04-127T . Washington, D.C.: October
1, 2003.

Human Capital: A Guide for Assessing Strategic Training and Development
Efforts in the Federal Government (Exposure Draft). [76]GAO-03-893G .
Washington, D.C.: July 2003.

Human Capital: Opportunities to Improve Executive Agencies' Hiring
Processes. [77]GAO-03-450 . Washington, D.C.: May 30, 2003.

Human Capital: OPM Can Better Assist Agencies in Using Personnel
Flexibilities. [78]GAO-03-428 . Washington, D.C.: May 9, 2003.

Human Capital: Effective Use of Flexibilities Can Assist Agencies in
Managing Their Workforces. [79]GAO-03-2 . Washington, D.C.: December 6,
2002.

A Model of Strategic Human Capital Management. (Exposure Draft)
[80]GAO-02-373SP . Washington, D.C.: March 15, 2002.

(360670)

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www.gao.gov/cgi-bin/getrpt?GAO-07-105 .

To view the full product, including the scope
and methodology, click on the link above.

For more information, contact Jim Wells at (202) 512-3841 or wellsj@
gao.gov.

Highlights of [88]GAO-07-105 , a report to the Subcommittee on Oversight
of Government Management, the Federal Workforce, and the District of
Columbia, Committee on Homeland Security and Governmental Affairs, U.S.
Senate

January 2007

HUMAN CAPITAL

Retirements and Anticipated New Reactor Applications Will Challenge NRC's
Workforce

The Nuclear Regulatory Commission (NRC) is responsible for licensing and
inspecting the nation's nuclear power plants to ensure their safety and
security. By 2010, about one third of NRC's workforce with
mission-critical skills will be eligible to retire. At the same time,
NRC's workforce needs to expand because NRC expects to receive at least 20
applications for 29 new nuclear power reactors beginning in October 2007.
GAO assessed NRC's ability to meet its workforce needs by examining the
extent to which NRC (1) has aligned its human capital planning framework
with its strategic mission and programmatic goals; (2) is effectively
recruiting, developing, and retaining critically skilled personnel; and
(3) is addressing future uncertainties that could affect its overall
workforce capacity. GAO examined strategic workforce planning and
implementation documents, interviewed cognizant managers on NRC's human
capital framework and activities, and surveyed these managers about NRC's
human capital flexibilities and measures.

[89]What GAO Recommends

GAO is recommending that NRC better (1) integrate its strategic human
capital planning with its operations and (2) evaluate the effectiveness of
its human capital flexibilities and measures. In commenting on a draft of
the report, NRC agreed with GAO's recommendations.

NRC's human capital planning framework is generally aligned with its
strategic goals and coherently identifies the activities needed to achieve
the following strategic human capital outcomes: (1) continuous improvement
in leadership and management effectiveness in delivering the mission and
(2) a diverse, skilled workforce and an infrastructure that fully supports
the agency's mission and goals. To integrate its human capital planning
with implementation activities, NRC has recently completed or drafted
three key planning documents and created a Human Capital Council in July
2006. However, it is too soon to tell whether implementation of these
initiatives will stimulate, for example, the rate of knowledge transfer
necessary for new staff to gain the critical skills they need to perform
their regulatory responsibilities.

NRC has been effective in recruiting, developing, and retaining a
critically skilled workforce to date, yet it is unclear whether this trend
will continue in the next few years. For example, through improving such
processes as how it implemented hiring for 60 different vacancy postings,
NRC brought 371 employees on board during fiscal year 2006--a
substantially higher number than in previous years. Similarly, NRC filled
several critical skills gaps in 2006, yet it also identified many more new
gaps in 2007 that require significant new hiring or training to fill. NRC
has used various targets and measures to monitor its human capital
progress, but could improve their application by gathering, analyzing, and
sharing information about their usefulness among NRC's offices and
revising some of them. Similarly, NRC may miss opportunities to most
effectively apply human capital funding to recruit, develop, and retain a
critically skilled workforce because NRC evaluates only some of its human
capital flexibilities, such as recruitment incentives, in terms of the
frequency and cost of their use.

NRC has acted to address two key uncertainties that affect its workforce
needs: whether it can (1) maintain its workforce in the face of future
competition for critically skilled workers and (2) accurately gauge its
future workload. To better compete for workers, NRC tracks salaries in key
disciplines to discern trends and is enhancing its university recruiting
efforts. To handle the expected growth in reactor license applications,
NRC has developed staffing and resource estimates, is reorganizing its
affected workforce, and completed many elements of its review process for
new reactors. Because of its workforce changes and anticipated increased
workload, NRC needs flexibility, staff commitment, and sustained human
capital management to adapt to any workforce climate shifts. Similarly,
workload imbalances among employees and across offices could undermine
employee satisfaction, making the recruiting and retention of a diverse,
skilled workforce more difficult as expected industry competition
intensifies. A failure to achieve these human capital goals could
potentially hinder NRC's ability to inspect existing reactors and license
new ones, which might ultimately limit the availability of electricity in
the U.S. market.

References

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