Energy Management: Technology Development Program Taking Action to
Address Problems (Letter Report, 07/09/96, GAO/RCED-96-184).

Pursuant to a congressional request, GAO examined how the Department of
Energy's (DOE) Office of Environmental Management (EM) is managing its
technology development program.

GAO found that: (1) EM has not coordinated its technology development
activities among its program offices; (2) there is no comprehensive
listing of EM technology development projects; (3) several DOE offices
have funded 60 different melter projects at various locations; (4) there
is a significant increase in technology development projects at certain
field sites designated as lead sites for particular focus areas; (5) DOE
does not use independent reviewers to ensure that project proposals
receive equal treatment; (6) DOE has scheduled a comprehensive review of
all technology development projects, combined two focus areas into one,
and begun closing out melter projects to reduce duplication and overlap;
and (7) DOE can not coordinate technology development projects without
EM leadership and support.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-96-184
     TITLE:  Energy Management: Technology Development Program Taking 
             Action to Address Problems
      DATE:  07/09/96
   SUBJECT:  Environmental monitoring
             Environmental policies
             Nuclear waste disposal
             Energy research
             Interagency relations
             Research program management
             Cost effectiveness analysis
             Funds management
             Nuclear waste management
IDENTIFIER:  Richland (WA)
             Idaho Falls (ID)
             Savannah River (SC)
             Morgantown (WV)
             DOE Technology Development Program
             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Committee on Governmental
Affairs, U.S.  Senate

July 1996

ENERGY MANAGEMENT - TECHNOLOGY
DEVELOPMENT PROGRAM TAKING ACTION
TO ADDRESS PROBLEMS

GAO/RCED-96-184

Technology Development Program Addressing Problems

(302184)


Abbreviations
=============================================================== ABBREV

  D&D - decommissioning and decontamination
  DOE - Department of Energy
  EM - Environmental Management
  OST - Office of Science and Technology

Letter
=============================================================== LETTER


B-272082

July 9, 1996

The Honorable John Glenn
Ranking Minority Member
Committee on Governmental Affairs
United States Senate

Dear Senator Glenn: 

In 1989, the Department of Energy (DOE) adopted a new mission:  to
clean up and restore its contaminated facilities and sites in
compliance with federal and state environmental laws and regulations. 
To centrally manage this new mission and ensure that cleanups are
implemented as efficiently and cost-effectively as possible, DOE
established the Office of Environmental Management (EM).\1 Since
1989, EM has spent $34 billion on cleanups, but schedules have
slipped and progress has been slow.  In 1995, EM projected that
cleanups could take another 75 years to complete and cost an
additional $200 billion to $350 billion (not including the cost of
cleaning most contaminated groundwater or currently active
facilities). 

According to DOE, innovative cleanup technologies are key to the most
efficient and cost-effective use of funds--a goal that has grown in
importance as funding constraints have increased.  EM has estimated
that using new technologies could reduce its total cleanup costs by
as much as $80 billion.  Recognizing the importance of new
technologies, DOE created the Office of Science and Technology
(OST)\2 within EM to manage a national program of technology
development in support of EM's other program offices. 

Throughout its 7-year history, EM has taken steps to improve its
programs.  For example, in January 1994, EM implemented a major
reorganization to improve the coordination and management of the
technology development program by creating five "focus areas."
However, concerns persist that management weaknesses continue to
contribute to the overall lack of progress in environmental cleanup. 
To ensure that EM is using its funds as efficiently and
cost-effectively as possible, you asked us to examine EM's current
management practices in selecting innovative technology projects for
funding.  Specifically, you asked us to examine whether EM is
managing its program to prevent (1) unnecessary duplication and
overlap and (2) an unwarranted concentration of projects at certain
field offices.  (For a discussion of our objectives, scope, and
methodology, see app.  I.)


--------------------
\1 This office, originally named the Office of Environmental
Restoration and Waste Management, was renamed the Office of
Environmental Management in 1994. 

\2 This office, originally named the Office of Technology
Development, was renamed the Office of Science and Technology in
1995. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

EM has not coordinated technology development activities among all of
its program offices to prevent overlap and duplication.  In fact, EM
has no comprehensive list of technology development projects.  Using
partial lists of projects, we found that in one area--melter
technology\3 --several DOE offices had funded 60 different melters at
various locations across the country.  Each of these melters could
cost between $15 million and $30 million to develop fully.  In 1996
alone, EM spent an estimated $40 million on melter projects. 
According to a group of outside experts convened by DOE as well as
DOE officials themselves, such duplication and overlap are excessive
and unnecessary. 

We also found a significant increase in the concentration of
technology development projects at certain field sites that DOE had
designated as the lead sites for particular focus areas.  We analyzed
the processes for selecting proposals in the five focus areas and
found that DOE had not used independent reviewers, as the National
Research Council recommends, to ensure that the proposals from
various sites received equitable treatment. 

Recognizing these and other problems, the Office of Science and
Technology took steps, starting in December 1995, to improve the
management of technology development within its own office, as well
as across EM as a whole.  For example, to reduce duplication and
overlap within OST, it (1) scheduled a comprehensive review of all
projects, (2) combined two focus areas into one, and (3) began
closing out melter projects.  While the proposed changes appear
promising, it is not clear that OST can effectively coordinate
technology development across EM's program offices without EM's
leadership and support. 


--------------------
\3 Melters are used to heat and melt a mixture of waste and other
materials.  This mixture, when cooled, becomes a glassy product that
immobilizes the waste, facilitating its safe disposal. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Historically, several DOE offices--including Defense Programs and the
Office of Energy Research, as well as EM--have funded projects to
develop innovative technologies for cleaning up nuclear waste. 
Within EM, innovative technology projects have been funded by OST,
the Office of Waste Management, the Office of Environmental
Restoration, and the Office of Nuclear Material and Facility
Stabilization.\4

In August 1994, we reported that insufficient coordination and
integration of technology development activities across EM's program
offices, and between headquarters and the field, had limited the use
of innovative cleanup technologies.\5 In response to our concerns and
the concerns of others, in January 1994, EM restructured its
technology development program around five high-priority problems, or
"focus areas":\6

  -- radioactive tank waste remediation (Tanks);

  -- characterization, treatment, and disposal of mixed waste (Mixed
     Waste);\7

  -- containment and remediation of contaminant plumes (Plumes);

  -- stabilization of landfills (Landfill Stabilization); and

  -- decontamination and decommissioning (D&D). 

Within each focus area, the restructuring created teams of technology
developers, users, and other stakeholders, including members from
both headquarters and the field, to increase the likelihood that new
technologies would be used to clean up the contamination at DOE's
sites.  In addition, EM made OST responsible for centrally managing
technology development to ensure the coordination of activities and
the elimination of unnecessary duplication across all of EM's program
offices. 


--------------------
\4 After EM adopted the focus area approach, the Office of
Environmental Restoration directed its field sites to cease
technology development activities and work with the focus areas to
ensure that the office's needs are met.  Since this change took
place, the office has limited the field sites' activities to those
required to comply with regulatory requirements. 

\5 Management Changes Needed to Expand Use of Innovative Cleanup
Technologies (GAO/RCED-94-205, Aug.  10, 1994). 

\6 In October 1995, EM established a sixth focus area to develop
technologies for stabilizing and immobilizing plutonium.  This focus
area is to be managed by the Office of Nuclear Material and Facility
Stabilization. 

\7 Mixed waste has both radioactive and hazardous components. 


   PROJECT DUPLICATION AND OVERLAP
------------------------------------------------------------ Letter :3

Within the research and development community, experts agree that
some duplication in projects is useful to provide the competition
that results in the best science.  However, EM officials and peer
review experts we spoke with generally agreed that several projects
competing in a specific area of technology would be sufficient. 

Our August 1994 report said that although OST's mission was to manage
EM's nationwide technology development program, other program offices
within EM conducted their own projects, which often overlapped and
conflicted with OST's activities.  We also found that DOE did not
have a comprehensive needs assessment for ranking and funding
technology development projects as effectively as possible. 

Although EM originally established the focus area approach to
coordinate technology development activities across its program
offices, we found that only OST was evaluating the projects that it
funded to identify areas of possible overlap and excessive
duplication.  EM directed its other program offices to support the
focus area approach by appointing "user" representatives to serve on
focus area management teams, but some of these offices did not
inventory their projects, and their projects did not receive the same
level of scrutiny as OST's. 

As a result, no comprehensive list of EM's technology development
projects had been compiled.  We were able to determine that, apart
from OST, only the Office of Waste Management funded technology
development at field sites during fiscal years 1995 and 1996.\8 We
were unable to verify the extent of the possible overlap and
duplication between the two offices, since no comprehensive list of
the Office of Waste Management's projects was available.  Partial
lists had, however, been prepared for the Mixed Waste and Tanks focus
areas.  The Office of Waste Management did not formerly require its
sites to describe their technology development projects because it
viewed technology development as an integral part of the sites' waste
management activities.  However, the office plans to begin collecting
this information in support of its fiscal year 1998 work plan. 

In a preliminary review of projects funded by OST and the Office of
Waste Management, we found that these offices had funded a large
number of melter projects and that several projects had received
funds from other DOE program offices as well.  At our request, OST
compiled a comprehensive list of all DOE-funded melter projects. 
This list revealed that DOE had contributed funds for 60 different
melters at various sites across the country and fully funded 52 of
them.  According to a DOE official, a melter costs between $15
million and $30 million to develop fully.  OST's list indicated that
most of the funding for these melters came from Energy Research and
certain EM program offices but some also came from Defense Programs. 
OST has no summary information on the total amount of funding
dedicated to melter projects; however, in 1996, EM funded melter
projects totaling more than $40 million. 

In November 1995, concerned about possible overlap and duplication,
the managers from the Mixed Waste and Landfill Stabilization focus
areas convened a group of experts in melter technology from outside
the agency to determine whether the number of melter projects should
be reduced.  The experts concluded that although some duplication is
useful, DOE was sponsoring far more melter projects than were
needed.\9 The experts characterized DOE's technology development
effort as "a proliferation of melter systems" and recommended that
the Department reduce the number of melter projects significantly
because many of the technologies, such as joule-heated melters,\10

are already available in the commercial sector.  The experts noted
that when enough vendors are available to bid competitively on
cleaning up a site using a particular type of technology, DOE should
say "enough is enough" and cease to support the research and
development of that technology. 


--------------------
\8 The Office of Nuclear Material and Facility Stabilization's
technology development activities associated with the Plutonium
Stabilization and Immobilization focus area are still in the planning
stages. 

\9 Report of the Technical Peer Review of Thermal Treatment for TRU,
TRU Mixed & Mixed Low-Level Waste, Part I:  November 1995, prepared
for the Office of Technology Development [now OST], EM (distributed
Mar.  15, 1996). 

\10 These melters pass an electrical current between electrodes
immersed in waste to provide the heat (between 1,050 and 1,500
degrees centigrade) needed to melt the waste and form the glass that
immobilizes contaminants. 


   PROJECT CONCENTRATION AT LEAD
   SITES
------------------------------------------------------------ Letter :4

When EM first conceived the focus area approach, OST was responsible
for managing the technology development program centrally at
headquarters.  However, as this approach evolved, EM shifted the
program's leadership to the field as part of a Department-wide effort
to decentralize.  Between July 1994 and February 1995, EM delegated
the leadership for the five focus areas to the following locations: 

  -- Tanks:  Richland, Washington;

  -- Mixed Waste:  Idaho Falls, Idaho;

  -- Plumes:  Savannah River, South Carolina;

  -- Landfill Stabilization:  Savannah River, South Carolina;

  -- D&D:  Morgantown, West Virginia

OST chose three of the lead sites through a competitive process,
considering each site's experience in an area and the strength of the
management team described in the site's proposal.  Thus, OST chose
Richland for Tanks, Idaho Falls for Mixed Waste, and Savannah River
for Plumes.  Subsequently, OST selected Savannah River, without
competition, to lead the Landfill Stabilization focus area.  Because
the Landfill Stabilization and Plumes focus areas are interrelated,
OST did not consider competition necessary.  Finally, OST chose
Morgantown to lead the D&D focus area because its staff had expertise
in contracting--an important consideration, since many D&D
technologies are available in the private sector.  OST gave the lead
sites the responsibility for managing the nationwide program for
their respective focus areas.  Their responsibilities included (1)
making nationwide funding decisions among potential technology
development projects and (2) ensuring that the needs of customers
across all DOE sites and EM offices, as well as various stakeholder
groups nationwide, were met.  However, OST provided the lead sites
with no specific guidelines for selecting projects.\11

We found that by delegating the lead responsibility for the focus
areas to field locations and by not providing any guidelines for
selecting projects, EM created an organizational structure that
allows certain lead sites to favor their own projects.  Within each
focus area, the funding for projects has begun to be concentrated at
the lead sites.  For fiscal year 1996, each lead site received more
dollars for projects in its focus area than it had received for
fiscal year 1995, before the restructuring (see table 1). 



                                Table 1
                
                Concentration of Funding at Lead Sites,
                             by Focus Area

                         (Dollars in millions)



                                        Percentage          Percentage
                                          of focus            of focus
                                            area's              area's
Lead site (focus area)          Amount       total  Amount       total
------------------------------  ------  ----------  ------  ----------
Richland, Washington (Tanks)     $11.8          51   $15.8          52
Idaho Falls, Idaho (Mixed        $13.9          46   $25.1          49
 Waste)
Savannah River, South Carolina    $4.6          14    $9.2          30
 (Plumes)
Savannah River, South Carolina    $2.4           8    $7.3          27
 (Landfill Stabilization)
Morgantown, West Virginia       $0.4\a         3\a    $6.3          43
 (D&D)
----------------------------------------------------------------------
\a Although Morgantown was designated as the lead site for the D&D
focus area in February 1995, Morgantown did not receive a significant
amount of funding until fiscal year 1996. 

Source:  GAO's presentation of data from OST. 

The concentration of funding at certain lead sites may, in part,
reflect an extended history of work in a particular area, yet in some
instances it also represents a dramatic shift in funding away from
the nonlead sites.  At Idaho Falls, for example, the increase in
funding for Mixed Waste projects evolved from this lead site's
long-term work on buried waste.  At Savannah River, however, the
increase in funding for Landfill Stabilization projects--from 8
percent in 1995 to 27 percent in 1996--may have occurred, to some
extent, because management wanted to secure support for researchers
at the lead site.  According to researchers and field representatives
at Savannah River, one reason for the increase in funding at Savannah
River was to provide support for researchers on-site whose work had
previously been funded through DOE's Defense Programs office. 
Meanwhile, the percentage of funding for Landfill Stabilization
projects at Idaho Falls, for example, dropped from 46 percent in 1995
to 20 percent in 1996.  Such shifts in workload have led to
expressions of concern by nonlead sites that their proposals are not
being treated fairly because their focus area's management has a
vested interest in selecting proposals submitted from the lead site. 

To ensure that proposals are selected fairly on the basis of their
scientific merits, the National Academy of Sciences' National
Research Council recommends that agencies use some form of peer
review to judge the quality of proposals.\12 The Council defines
"peer reviewers" as established working scientists or engineers from
diverse institutions who are deeply knowledgeable about a field of
study and who provide disinterested technical judgments as to the
scientific significance of a proposed work, the competence of the
researchers, the soundness of the research plan, and the likelihood
of success. 

We found, however, that although the lead sites used significantly
different systems to select projects, none of them used disinterested
reviewers to determine the technical merit of the proposed work.  For
example, in the Plumes focus area, the members of Savannah River's
lead team decided which projects should receive funding; no peer
reviewers evaluated the proposals' technical merit.  Although the
Landfill Stabilization and Mixed Waste focus areas did use peer
reviewers, most were associated with the local leadership team and,
therefore, were not independent.  The Tanks focus area used an
elaborate system of technical review, but many of the reviewers were
not independent.  Finally, the D&D focus area did not use peer
reviewers for fiscal year 1996 because the large demonstration
projects upon which the fiscal year 1996 D&D program is based were
competitively selected. 

During a 1995 review of EM's technology development program, the
National Research Council noted that EM's process for selecting
projects should incorporate a review of proposals by a knowledgeable
independent review group comprising individuals from outside the
agency with no vested interests in the outcome.  According to the
Council, this independent peer review system should (1) exclude those
reviewers who might be considered to have a conflict of interest and
(2) be carefully implemented to ensure equity.\13


--------------------
\11 Shortly after EM established the focus areas in 1994, OST
prepared a framework for independent peer review.  The initial
objectives of the process included (1) ensuring that technological
solutions reflect the best available science and (2) identifying
redundant and overly costly projects.  After submitting the framework
to the National Academy of Sciences and receiving their response that
the process was overly cumbersome, OST did not implement the process. 

\12 Allocating Federal Funds for Science and Technology, Committee on
Criteria for Federal Support of Research and Development (Washington,
D.C.:  National Academy Press, 1995). 

\13 Improving the Environment:  An Evaluation of the DOE's
Environmental Management Program (Washington, D.C.:  National Academy
Press, prepublication copy, 1995). 


   ACTIONS TAKEN BY OST TO IMPROVE
   EM'S TECHNOLOGY DEVELOPMENT
   PROGRAM
------------------------------------------------------------ Letter :5

Starting in December 1995, OST began taking actions independently to
improve the technology development program's management within its
own office and within EM as a whole.  To eliminate duplication and
overlap and to promote coordination across EM's programs, OST
developed a strategy in February 1996 that will coordinate and rank
technology development projects funded by EM's various program
offices.  To eliminate overlap among focus areas within its own
office, OST scheduled a comprehensive review of all ongoing work in
each focus area to clarify which projects each focus area should be
funding.  OST's review is scheduled to be completed by the end of
June 1996.  In addition, in February 1996, OST combined the Plumes
and Landfill Stabilization focus areas into the Subsurface
Contamination focus area.  Responding to the recommendations of the
OST-sponsored melter review panel, the focus areas began to close out
melter projects in December 1995, and in April 1996, the Deputy
Assistant Secretary of OST told us that OST had decided to stop
funding melter projects because most melter technologies are now
available commercially.\14

To help ensure that the funding for projects is not being
concentrated at the focus areas' lead sites unless warranted by the
projects' technical merits, senior OST officials told us that they
plan to direct the focus areas' managers to use independent peer
reviewers in selecting projects.  OST indicated that this system will
be in place for the fiscal year 1997 selection process.  Reviewers
are to be "external, independent, and technically qualified" to
determine the technical and scientific merits of specific projects
and to ensure that projects are selected on the basis of their merits
without regard to the location of the work. 


--------------------
\14 OST plans to continue funding one project involving U.S.  support
of Russian technology. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

We provided a copy of our report to DOE for its review and comment. 
The offices of Science and Technology, Environmental Restoration, and
Nuclear Material and Facility Stabilization did not provide comments. 
A senior technical adviser in the office of the Deputy Assistant
Secretary for Waste Management commented on our statement that,
despite the promising steps taken to improve the management of
technology development, it is not clear that OST can effectively
coordinate technology development across EM's program offices without
EM's leadership and support.  According to the Office of Waste
Management, EM has given OST leadership and support to coordinate
technology development.  Specifically, the Office of Waste Management
cited the former Assistant Secretary for Environmental Management's
strategic goals, and the newly confirmed Assistant Secretary for
Environmental Management's guiding principles, for focusing EM's
technology development efforts.  While we agree that such goals and
principles are important as guides to DOE's technology development
efforts, we note that they do not provide specific direction for
eliminating duplication and promoting coordination across EM's
programs.  Accordingly, we have not changed this portion of our
report. 


---------------------------------------------------------- Letter :6.1

We conducted our review from May 1995 through June 1996 in accordance
with generally accepted government auditing standards.  Appendix I
provides a detailed discussion of our scope and methodology. 

As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 7 days from the date of this letter.  At that time, we will
send copies to the appropriate congressional committees; the
Secretary of Energy; and the Director, Office of Management and
Budget.  We will also make copies available to

others upon request.  Please call me at (202) 512-3841 if you or your
staff have any questions about the information provided in this
report.  Major contributors to this report are listed in appendix II. 

Sincerely yours,

Victor S.  Rezendes
Director, Energy, Resources,
 and Science Issues


OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

At the request of the Ranking Minority Member, Senate Committee on
Governmental Affairs, we examined the Office of Environmental
Management's (EM) current management practices in selecting
innovative projects for funding.  Specifically, we determined whether
EM is managing its program to prevent (1) excessive duplication and
unnecessary overlap and (2) an unwarranted concentration of projects
at certain field offices. 

To determine whether excessive duplication and unnecessary overlap
existed within EM's program, we obtained the opinions of experts on
duplication in research projects.  Specifically, we attended the
3-day melter review panel, which was sponsored by EM's Mixed Waste
and Landfill Stabilization focus areas in November 1995, and we spoke
with other researchers who have served as peer reviewers for the
National Academy of Sciences.  We requested descriptions of all
technology development projects from each EM program office for
fiscal years 1995 and 1996.  After determining that the Office of
Environmental Restoration and the Office of Nuclear Material and
Facility Stabilization were not currently developing technology, we
limited our review to information received on projects funded by the
Office of Science and Technology's (OST) focus areas and the Office
of Waste Management. 

To determine whether there was an unwarranted concentration of
projects at certain field sites, we compared the distribution of
projects among sites for fiscal years 1995 and 1996.  We also
reviewed the process each focus area used to select projects for
funding, after the focus areas' leadership was moved to the field. 

In the course of our work, we interviewed the Deputy Assistant
Secretaries of Environmental Restoration, Waste Management, Nuclear
Material and Facility Stabilization, and Science and Technology,
representing each of the EM program offices that have historically
funded technology development activities.  We also interviewed the
leaders of each of the five focus areas.  In addition, we attended
several of the Technology Development Council's meetings, as well as
the February 1996 meeting of the Focus Area Board of Directors, which
OST convened to address the concerns we noted during our review.  We
obtained and reviewed pertinent documents, including copies of the
proposals received by each of the focus areas for fiscal year 1996,
as well as descriptions of the projects funded in fiscal 1996.  We
performed our review from May 1995 through June 1996 in accordance
with generally accepted government auditing standards. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION, WASHINGTON,
D.C. 

Bernice Steinhardt, Associate Director
Duane Fitzgerald, Assistant Director
Ruth-Ann Hijazi, Evaluator-in-Charge
Margie K.  Shields, Adviser
Karen D.  Wright, Evaluator


*** End of document. ***