United States General Accounting Office Washington, DC 20548 May 14, 2003 The Honorable David L. Hobson Chairman The Honorable Peter J. Visclosky Ranking Minority Member Subcommittee on Energy and Water Development Committee on Appropriations House of Representatives Subject: Department of Energy: External Regulation Savings in Safety and Health Activities at DOE Science Laboratories The Department of Energy (DOE) is unusual among federal agencies in that it regulates and inspects its own facilities to protect the safety and health of its workers and of the communities surrounding its vast complex of research laboratories. With few exceptions, all other federal facilities must comply with national standards set by the Nuclear Regulatory Commission (NRC) for nuclear safety and by the Occupational Safety and Health Administration (OSHA) for worker safety and health. DOE asserts that, for the most part, its safety and health standards meet or exceed those promulgated for facilities regulated by NRC and OSHA. At DOE’s 10 science laboratories, which are run by management and operating (M&O) contractors, the department and its contractors use a contract administration process to select standards appropriate to current worker hazards and public safety issues.1 Both DOE and the M&O contractors are involved in safety and health activities.2 DOE’s field offices, most of which are located at the laboratories, provide continuous safety and health oversight of the M&O contractors. DOE headquarters offices provide policy guidance to the field offices and also conduct some oversight of the laboratories. Safety and 1 These science laboratories are also known as nonmilitary energy laboratories or non- defense science laboratories. 2 DOE and contractor safety and health personnel are involved in emergency preparedness, fire protection, industrial hygiene, industrial safety, occupational medical services, nuclear safety, radiation safety, transportation safety, and management of oversight and reporting on these safety and health activities. Page 1 GAO-03-633R External Regulation of DOE health personnel working for the M&O contractors take actions to comply with the safety and health standards and conduct their own self-assessment activities. DOE’s field offices track contract compliance through direct observations and through the review of safety and health reports and other related information provided by the M&O contractors. Over a decade ago, DOE began considering whether to end self-regulation of its facilities to improve safety and public trust in the department, among other reasons. However, after much study, the department concluded that the costs of shifting to external regulation would exceed the potential benefits of doing so. We have taken a position different from DOE. For example, in a 2002 report, we observed that external regulatory agencies’ “greater independence, coupled with use of national nuclear and worker safety standards and enforcement powers, would make them more cost-effective regulators [than DOE].”3 In addition, any resource savings to the department in shifting to external regulation could potentially be redirected to other mission priorities. The conference report accompanying the Energy and Water Development Appropriations Act for fiscal year 2002 directed DOE to prepare an implementation plan for shifting the department’s science laboratories to external regulation.4 In July 2002, DOE presented a plan that was 1 month late and lacked important information. A subsequent committee report accompanying the 2003 appropriations bill criticized DOE for providing the “grossly inadequate” plan.5 This report concluded that DOE “cannot be relied upon to provide accurate and objective information in response to Committee requests for information on this issue.” You therefore requested us to determine (1) how much DOE spends on safety and health activities at its science laboratories and (2) how much DOE might save after shifting to external regulation of these facilities. To address these objectives, we substantially relied on data collection instruments that we sent to DOE and M&O contractor officials associated with the 10 science laboratories. We briefed your offices on the results of our review on March 28, 2003, using the enclosed slides. This is report summarizes the results of that briefing. 3 U.S. General Accounting Office, Department of Energy: Observations on Using External Agencies to Regulate Nuclear and Worker Safety in DOE’s Science Laboratories, GAO-02- 868R (Washington, D.C.: June 26, 2002). 4 H.R. Rep. No. 107-258, October 30, 2001, at 109-110. 5 H.R. Rep. No. 107-681, September 24, 2002, at 133-134. Page 2 GAO-03-633R External Regulation of DOE In FY 2002, DOE spent about $145 million on safety and health activities at Summary its 10 science laboratories, and we believe that this spending level has not varied much during the last 4 years. This expenditure represented about 16 percent of all safety and health costs department wide. Virtually the entire expenditure went to cover the more than 1,400 federal and M&O contractor personnel involved in safety and health activities—about 95 percent of whom worked for the M&O contractors. The reported safety and health costs do not include any maintenance costs, which are accounted for separately. A shift to external regulation of the science laboratories could decrease DOE’s annual safety and health costs by up to about $41 million, or increase these costs up to about $5 million depending on the level of continued department oversight of these activities. Any potential savings in DOE safety and health costs, however, would likely be applied to reduce other costs associated with external regulation and would, therefore, not produce immediate overall budgetary savings. Costs would be incurred to bring the laboratories into compliance with national safety and health standards and to supplement the staffs of the external agencies to take on regulatory and inspection responsibilities for the numerous facilities at each science laboratory. In addition, both DOE and the M&O contractors might transfer safety and health personnel to other functional areas in their respective organizations rather than eliminate these positions to reduce overall operating costs. Further reductions in safety and health costs might be possible through staff reductions at DOE headquarters offices. However, these offices contend that personnel reductions are unlikely because staff will still be needed to self-regulate other facilities, such as the defense laboratories, and to interact with the external regulators. Any reduction in DOE safety and health costs after shifting to external regulation would stem from DOE altering its approach to overseeing safety and health activities. If DOE continues with its current oversight approach after regulatory authority shifts to NRC and OSHA, safety and health costs could actually increase up to about $5 million annually. These additional costs would result from DOE increasing its current safety and health staffing levels to interact with the external regulatory agencies, and the M&O contractors increasing their safety and health staffing levels to respond to reporting requirements and information requests from both the external regulators and DOE. We found that the DOE safety and health oversight approach, which drives staffing levels, is substantially reflected in the number of contractually required safety and health reports and frequent ad hoc information requests of the M&O contractors. Eliminating Page 3 GAO-03-633R External Regulation of DOE redundant information requests and oversight after shifting to external regulation could justify a reduction in or redirection of safety and health personnel that would lower safety and health costs. External regulation of the science laboratories would provide a number of Background benefits. In a 2001 report, we found that eliminating DOE self-regulation of safety and health activities and taking other actions would improve the accountability of the department.6 For a 2002 report, our examination of federal and foreign laboratories comparable to DOE’s science laboratories suggested that “external regulators can potentially oversee [the laboratories] more efficiently and at less cost than DOE’s internal staff.”7 In a subsequent testimony, we concluded “the issue is not should DOE shift to external regulation of its science laboratories, but how.”8 Shifting to external regulation of the science laboratories will entail federal government costs to bring the laboratories into compliance with national standards and annual cost increases for the regulatory agencies. Any potential reduction in safety and health costs within DOE and its M&O contractors is expected to help offset these other costs. To ascertain the greatest of these anticipated costs, the conference report on continuing appropriations for FY 2003 directed NRC and OSHA to conduct compliance audits of the 10 science laboratories, with funding support from DOE, and to cooperate with the department in preparing cost estimates to bring the laboratories into compliance with external regulations.9 The final DOE report is due no later than April 30, 2004. According to DOE, the transition costs to external regulation could be high, depending on the flexibility of the regulators in applying their standards to the department’s unique facilities without compromising safety. We have previously reported, however, that DOE would likely incur many of these costs anyway if the department were to bring the 6 U.S. General Accounting Office, Department of Energy: Fundamental Reassessment Needed to Address Major Mission, Structure, and Accountability Problems, GAO-02-51 (Washington, D.C.: December 21, 2001). 7 GAO-02-868R. 8 Department of Energy, Observations on Externally Regulating Nuclear and Worker Safety in DOE’s Science Laboratories, GAO-02-974T (Washington, D.C.: July 25, 2002). 9 H.R. Rep. No. 108-10, February 12, 2003, at 898-899. Page 4 GAO-03-633R External Regulation of DOE laboratories into compliance with DOE’s own safety and health standards. The annual costs after transition are primarily associated with increasing NRC and OSHA staffs to assume regulatory responsibilities for the science laboratories. In a DOE implementation plan for external regulation submitted to the Congress in July 2002,10 these agencies anticipated they would need an additional $6.9 million annually for this purpose.11 In FY 2002, DOE spent $145.3 million on safety and health activities DOE Spends About associated with its 10 science laboratories. DOE data indicate that this $145 Million Annually level of spending has not changed much in the previous 4 years.12 This expenditure represented about 16 percent of total department spending on on Safety and Health safety and health activities in FY 2002, compared to the 35 percent spent at Activities National Nuclear Security Administration sites and the 45 percent spent at DOE environmental management sites.13 The reported expenditure does not include corrective maintenance for the repair of failed or malfunctioning equipment. Of the safety and health costs for the science laboratories, the portion spent on DOE oversight was about $8.6 million. This $8.6 million covered primarily the cost of the approximately 74 full-time equivalent (FTE) employees involved in safety and health policy development and oversight of the laboratories, most of whom (approximately 89 percent) were located in field offices. The M&O contractors, however, incurred the vast majority of the $145.3 million in safety and health costs. The cost of their safety and health activities in FY 2002 was $136.7 million. For the most part, this expenditure supported the nearly 1,334 FTEs involved in these activities, comprising 3 to 9 percent of the laboratories’ workforces. As reported to us, expenditures on safety and health activities by the M&O contractors represented about 3 percent of their total budgets. 10 Department of Energy, Implementation Plan for External Regulation of Non-Defense Science Laboratories. (Washington, DC: July 1, 2002). 11 The regulatory agencies anticipate the need for an additional 24 full-time employees at NRC and an additional 19 at OSHA. 12 Based on data obtained from DOE’s Functional Cost Report of 30 Major DOE Contractor Sites, the variation in safety and health costs since 1998 has been less than a 5 percent. 13 The remaining small percentage of total safety and health costs went to miscellaneous activities. Page 5 GAO-03-633R External Regulation of DOE Table 1 summarizes the safety and health FTE levels and costs for DOE and the M&O contractors and compares these costs with overall budgets. Table 1: Safety and Health FTEs and Costs in Fiscal Year 2002 Dollars in millions Safety and Safety and Overall Percent of Location health FTEs health costs budget budget DOE field offices 65.3 $7.5 $137.5 5.4 DOE headquarters 8.5 1.1 98.3 1.1 M&O contractors 1,333.8 136.7 4,201.3 3.3 Total 1,407.6 $145.3 $4,437.2a 3.3 Source: Figures for safety and health FTEs and costs were derived from responses to data collection instruments sent to cognizant managers in these organizations. The overall budget figure for the DOE headquarters offices is based on their program direction funding in fiscal year 2002. The budget figures for the DOE field offices affiliated with the 10 science laboratories and their M&O contractors came from responses to our survey. a Total does not add up because of rounding. Up to about $41 million annually in DOE’s safety and health cost savings Annual Safety and might accrue after the department shifts to external regulation, depending Health Savings of on the level of continued departmental oversight of safety and health activities. However, if DOE does not alter its oversight approach, Up to $41 Million especially through a reduction of contractual reporting requirements and Possible, Depending ad hoc information requests of the M&O contractors, shifting to external regulation might require additional safety and health personnel, potentially on Level of increasing annual DOE safety and health costs by up to about $5 million. DOE Oversight Our data collection instruments included three scenarios that asked DOE and M&O contractor safety and health managers how staffing levels might change under various levels of DOE oversight after NRC and OSHA begin regulating and inspecting the science laboratories. We developed a fourth scenario to provide an independent assessment of potential safety and health staff reductions for both DOE and its M&O contractors based on the experiences of another federal agency and its science laboratory which is already externally regulated. We selected the Jet Propulsion Laboratory, owned by the National Aeronautics and Space Administration (NASA), as a performance benchmark because DOE had already identified it as a federally funded research and development center comparable to its science laboratories. DOE has used the NASA interaction with the Jet Propulsion Laboratory contractor to identify best management practices for improving the overall efficiency and cost-effectiveness of its Page 6 GAO-03-633R External Regulation of DOE laboratories.14 The Jet Propulsion Laboratory concentrates its research on unmanned space operations, including solar system exploration, space and earth observing systems, robotic technology for space exploration, computational sciences for assimilation of large databases, and advanced instrumentation. The laboratory contractor holds all safety and health licenses with external regulators, and DOE considers this laboratory’s safety levels to be similar to that of its Lawrence Berkeley National Laboratory. In comparison to the Berkeley Lab and some other DOE science laboratories, however, the Jet Propulsion Laboratory has a small radioactive materials program, and it has no accelerator. On the other hand, the laboratory has about 30 percent more employees (about 5,200 employees mostly at three sites in southern California) and over twice the operating budget (about $1.4 billion in fiscal year 2002) compared to the largest DOE science laboratory. The four scenarios of DOE oversight are: • Scenario 1: DOE holds all applicable licenses and permits with external regulators, eliminates the M&O contract requirements that duplicate those of the external regulatory agencies, but retains its current approach to contract performance oversight. • Scenario 2: The same as the first scenario, but the M&O contractor, instead of DOE, holds any licenses and permits issued by external regulatory agencies. • Scenario 3: The same as the second scenario, but DOE changes its approach to contract performance oversight, relying instead on best industry practices and norms for safety and health risk management. • Scenario 4: DOE adopts the safety and health management approach used by NASA at its Jet Propulsion Laboratory. This approach is essentially NASA’s application of scenario 3. Table 2 provides estimated changes in annual safety and health costs under the four scenarios for DOE oversight. The first scenario resulted in a projected increase in safety and health costs, while the other scenarios produced decreases in these costs through anticipated reductions in safety and health FTEs. Any reduction in annual DOE safety and health costs, however, might not produce overall budgetary savings, in part because the external agencies would need to supplement their staffs to regulate and inspect the science laboratories. In addition, there might not be immediate 14 Berkeley Lab. DOE Best Practices Pilot Study, LBNL/PUB-865 (Berkeley, CA: February 2002). Page 7 GAO-03-633R External Regulation of DOE savings to DOE, given the transition costs to bring the laboratories into compliance with national safety and health regulations, irrespective of their present conditions relative to DOE’s own standards. Further, both DOE and the M&O contractors might transfer safety and health personnel to other functional areas in their respective organizations rather than eliminate these positions to reduce overall operating costs. Nevertheless, any savings in DOE safety and health personnel costs might be transferred to NRC and OSHA to help defray their increased costs, and reducing the safety and health personnel now required to meet the significant information needs of DOE might allow the M&O contractors to shift some of these resources to more science mission work or to needed maintenance and infrastructure upgrades. Table 2: Estimated Savings in Annual Safety and Health Costs Dollars in millions Location Scenario 1 Scenario 2 Scenario 3 Scenario 4 DOE field offices ($1.1 to $1.2) $0.2 $0.2 to $0.8 $5.9 M&O contractors (2.9 to 4.0) 0.4 to 0.8 7.4 to 8.7 35.2 a a Total ($4.0 to $5.2) $0.6 to $0.9 $7.6 to $9.5 $41.2 Source: Negative or positive savings estimates were derived from responses to data collection instruments sent to cognizant managers in these organizations. DOE headquarters offices indicated no staffing changes for the first three scenarios and we did not estimate them in the fourth scenario. Note: Dollar values were derived by multiplying the number of FTEs (either projected safety and health position increases in scenario 1, or position decreases in the other scenarios) by the average cost of an FTE as reported for each location. a Totals do not add up because of rounding. Projected changes in safety and health costs for the first three scenarios were derived from responses to our survey of DOE field offices and M&O contractors. Headquarters offices did not project any staffing changes under the first three scenarios. For scenario 4, we calculated changes in DOE’s field staff by applying NASA’s safety and health staffing approach (i.e., reducing safety and health field FTEs to one per laboratory). In calculating potential changes for M&O contractor staff, we determined that the Jet Propulsion Laboratory’s safety and health staffing levels were about 28 percent less than at DOE’s Lawrence Berkeley National Laboratory, even after DOE had adjusted staffing figures downward to account for differences in personnel functions at the two laboratories.15 15 In the DOE Best Practices Pilot Study report, DOE adjusted the safety and health staffing figure downward from 150 to 41 at the Berkeley Lab and from 50 to 40 at Jet Propulsion Laboratory. Page 8 GAO-03-633R External Regulation of DOE For example, DOE excluded its own safety and health personnel involved in radiation safety and environmental radiation monitoring, health services, and fire protection because it was determined that these functions were not performed by the safety and health personnel at the Jet Propulsion Laboratory. We then applied the 28 percent reduction to each of the 10 DOE science laboratories to estimate potential savings, although the potential for this reduction would vary among the laboratories, depending on the circumstances presented. We did not calculate any staff changes for DOE headquarters. Implementing scenario 4 could potentially provide the greatest savings to offset the transition costs and the annual cost increases anticipated for additional NRC and OSHA personnel under external regulation. Implementing this scenario, however, would also require the most dramatic changes in DOE’s oversight culture, particularly in contract administration and the responsibilities placed on safety and health personnel. Our analysis suggests that, to a large extent, the safety and health staffing levels across DOE field offices and the M&O contractors are driven by the need to monitor and respond to the numerous safety and health contractual reporting requirements and ad hoc information requests. Eliminating unnecessary information requests after shifting to external regulation could justify a reduction or redirection of safety and health personnel that would lower safety and health costs. DOE has recognized the need to fundamentally change its contract administration process to improve contractor efficiency and effectiveness and to enhance accountability. In April 2002, DOE formulated principles to guide the development of pending contracts with three science laboratories.16 The management practices at NASA’s Jet Propulsion Laboratory were used to support these principles. One of the principles calls for reliance on national standards to establish contractor requirements and performance criteria, while minimizing the use of DOE orders and directives that place administrative and operational requirements on the contractor. Applying this principle alone, in conjunction with adopting external regulation, would help to move DOE toward the potential safety and health savings projected in scenario 4. 16 Memorandum for Heads of Departmental Elements, the Under Secretary of Energy, Robert G. Card, Principles for Office of Science Laboratory Contracts, Department of Energy: April 30, 2002. Page 9 GAO-03-633R External Regulation of DOE We provided a draft of this report to DOE for its review and comments. Agency Comments Written comments are presented and evaluated below and are reprinted in enclosure II. In commenting on our report, the Deputy Secretary of Energy expressed several concerns about our analysis and the need to shift to external regulation. For example, DOE commented that because our cost estimates were not independently verified, they are not “decision-quality information.” Other comments pertained to our estimates of department savings in safety and health costs after shifting to external regulation of the science laboratories. For example, DOE questioned our calculation of potential reductions in safety and health costs and the level of information necessary to monitor these activities. Finally, DOE raised some concerns about transition costs and other potential costs associated with shifting to external regulation. While we agree that our assessment of safety and health costs for the department was hindered by limitations in the availability of budget quality data, our method of estimating these costs was reasonable. Further, given the uncertainties about future roles, responsibilities and interactions among DOE and its M&O contractor safety and health personnel after shifting to external regulation, providing a range of savings estimates based on a combination of survey responses from the individuals responsible for these activities and our own calculations, make us confident that our assessment is independent and credible. Finally, while we were not asked to assess the transition costs and other potential costs and benefits of shifting to external regulation in this report, we have discussed these issues in previous reports. At this point, with the analysis undertaken on this issue over the years, it seems to us that philosophical opposition rather than data limitations is the main stumbling block to the department’s shift to external regulation. Our specific comments to each of the concerns raised by DOE are in enclosure II. To obtain information on the cost of safety and health activities and on the Scope and potential for reductions under different DOE oversight scenarios, we Methodology relied for the most part on data collection instruments that we sent to DOE and M&O contractor officials associated with the 10 science laboratories. We also visited NASA’s Jet Propulsion Laboratory, a federally funded research and development center that we selected because it is comparable to DOE’s science laboratories and because the department has already used it as a performance benchmark. In addition, we obtained safety and health cost data from centralized data systems to compare with our survey data. We did not independently verify the accuracy of the self- reported data, nor did we undertake an independent study of the current and proposed safety and health staffing levels for DOE and its contractors, Page 10 GAO-03-633R External Regulation of DOE or of the proposed additions to NRC and OSHA staffs. We did, however, compare responses among the laboratories and follow up with respondents when necessary. We also encouraged narrative explanations of the responses. To obtain additional information, we spoke with DOE headquarters and field office officials. We conducted our work between August 2002 and March 2003 in accordance with generally accepted government auditing standards. As agreed with your offices, we will make copies of this report available to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-3841 or Dan Feehan, Assistant Director, at (303) 572-7352. Major contributors to this report include Joel Grossman, Thomas Laetz, Mehrzad Nadji, Cynthia Norris and Michael Sagalow. Robin Nazzaro Director, Natural Resources and Environment Enclosure Page 11 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Enclosure I: Briefing Slides Page 12 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 13 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 14 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 15 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 16 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 17 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 18 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 19 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 20 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 21 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 22 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 23 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 24 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 25 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 26 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 27 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 28 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 29 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 30 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 31 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 32 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 33 GAO-03-633R External Regulation of DOE Enclosure I: Briefing Slides Page 34 GAO-03-633R External Regulation of DOE Enclosure II: Comments from Enclosure II: Comments from the the Department of Energy Department of Energy Note: GAO comments appear at the end of this appendix. Page 35 GAO-03-633R External Regulation of DOE Enclosure II: Comments from the Department of Energy Page 36 GAO-03-633R External Regulation of DOE Enclosure II: Comments from the Department of Energy Page 37 GAO-03-633R External Regulation of DOE Enclosure II: Comments from the Department of Energy Page 38 GAO-03-633R External Regulation of DOE Enclosure II: Comments from the Department of Energy Page 39 GAO-03-633R External Regulation of DOE Enclosure II: Comments from the Department of Energy The following are GAO’s comments on the Department of Energy’s letter dated April 28, 2003. The number associated with each of our comments corresponds to the numbered DOE statement in this enclosure. GAO Comments 1. We agree that any reductions in safety and health costs under the first three oversight scenarios would at best offset anticipated increases in staffing at NRC and OSHA. However, we disagree that these estimates are questionable. Our estimates were derived directly from survey responses provided to us by DOE and M&O contactor safety and health managers who are in the best position to provide these data. The fourth scenario, which did not rely on survey responses conditioned by DOE’s oversight culture, yielded much higher potential reductions in safety and health costs. These savings would go well beyond offsetting increases in NRC and OSHA costs, but only if they are not shifted to other functional areas of the department and its M&O contractors. 2. We agree with the two propositions extracted by DOE from our report that are behind the potential savings of up to $41 million calculated in scenario 4. We believe that these propositions are reinforced by DOE’s current policy guidance for developing new science laboratory contracts. This guidance underscores the use of national standards to establish contractor requirements and performance criteria, while minimizing the use of DOE orders and directives as mechanisms for placing administrative and operational requirements on the contractors. 3. We agree that our report did not include any specific examples of “unnecessary” DOE reporting requirements. However, we disagree that there was no analysis to support our claim that these requirements and ad hoc information requests drive the apparent high levels of safety and health staffing. We compared the number of information requests from NASA to its Jet Propulsion Laboratory with those from DOE to its 10 science laboratories. The Jet Propulsion Laboratory had significantly fewer information requests than the DOE laboratories because NASA essentially relies on the information requested by external regulators, and their oversight, as well as the Jet Propulsion Laboratory’s self-assessments for safety assurances. If this laboratory’s total information demand equaled the information requested of DOE’s M&O contractors, one would expect that the number of staff necessary to respond to these requests would be similar. However, the Jet Propulsion Laboratory and the NASA Management Office at this laboratory have far fewer safety and health personnel as a proportion of their workforces than at a comparable DOE science laboratory and its associated field offices. Page 40 GAO-03-633R External Regulation of DOE Enclosure II: Comments from the Department of Energy 4. DOE’s concern that three entities (DOE, NRC, and OSHA) will each request information under external regulation gets at a root concern expressed by most of the M&O contractors that the department will not fundamentally alter its oversight approach even with the presence of external regulators. Scenario 4 shows that the Jet Propulsion Laboratory is able to respond to the information requests of its external regulators and NASA overseers with 28 percent fewer safety and health personnel than a comparable DOE science laboratory, even after significantly reducing the number of pertinent DOE laboratory personnel (i.e., from 150 to 41) to account for differences in the types of hazards overseen in the respective laboratories. And, as reported by DOE, the Jet Propulsion Laboratory does this while maintaining comparable levels of safety to its Lawrence Berkeley National Laboratory. 5. We agree that DOE can address to some extent the issue of “unnecessary” information requests under existing self-regulation. However, we disagree that shifting to external regulation is “far from the most plausible mechanism through which unnecessary information requests may be eliminated.” (See response to comment 6.) 6. We disagree that shifting to external regulation will make it harder rather than easier to eliminate unnecessary information requests. Shifting to external regulation should help clarify what DOE reporting requirements and other information requests are duplicative of the information needs of external regulators. Applying a NASA-type oversight approach will also help uncover those administrative mechanisms to ensure a safe and healthy work environment that are unnecessary given the presence of external regulators. 7. We pointed out in our report that the potential for a 28 percent reduction in safety and health personnel would vary among the laboratories, depending on the circumstances presented. That is, for some laboratories a higher percent reduction in M&O contractor safety and health personnel might be achieved, and for other laboratories a lower percent reduction would be possible. Applying this percentage to reduce safety and health costs across the 10 laboratories is actually more conservative than the 30 percent reduction in costs estimated by DOE’s major M&O contractors in one of our previous reports. We were told that this latter estimate is only achievable if DOE relinquishes its oversight to external regulators. It also takes into consideration the Oak Ridge National Laboratory, which would likely have the greatest regulatory presence of NRC under external regulation. 8. We agree that safety and health cost information is based primarily on responses to our data collection instruments. We relied on survey data because DOE does not have budget quality information on safety and health costs. We disagree with DOE that our cost information does not represent decision-quality information; given the steps we took to determine the reasonableness of the data, including Page 41 GAO-03-633R External Regulation of DOE Enclosure II: Comments from the Department of Energy making cost adjustments where necessary based on follow-up conversations with respondents. 9. We agree that it would be difficult to determine how much of the transition costs to bring the laboratories into compliance with NRC and OSHA standards could be attributable to upgrading these laboratories to meet DOE’s own standards. DOE stated that there was no basis for assuming that much of the transition costs would be needed to meet the department’s own standards and that any such determination could not be verified. DOE also contends that its safety and health standards meet or exceed those of NRC and OSHA, but that it achieves acceptable levels of safety by means other than those that would be imposed under external regulation. We acknowledge that the full cost of transitioning to external regulation cannot be ascertained until the completion of comprehensive compliance audits involving DOE, NRC, and OSHA for the 10 science laboratories. However, based on previously reported information, we believe that some of the transition costs will be associated with complying with DOE’s own regulations. DOE even stated in its Implementation Plan for External Regulation of the Non- Defense Science Laboratories that some of the transition costs would be necessary to cover the backlog of preventive facility maintenance that presumably are in noncompliance with its own standards. 10. A review of DOE’s Integrated Safety Management System was beyond the scope of our report. We note, however, that officials at the Jet Propulsion Laboratory told us that they also have an established integrated safety management system operating within the context of external regulation. We believe that the reasonable application of regulations to reflect activities and hazards associated with a particular work environment is appropriate and not automatically eliminated with external regulation, as seen at the Jet Propulsion Laboratory. We have also reported that NRC claims it would be flexible in applying its standards to DOE’s unique facilities without compromising safety, and OSHA has concluded that any deficiencies identified at the laboratories would be similar to levels found in the private sector and, therefore, manageable. 11. We agree that characterizing the laboratories under the stewardship of DOE’s Office of Science as military or nonmilitary does not fully capture the scope of research taking place at them. However, we provided the questioned footnote to clarify for some readers that the science laboratories have been referred to in other ways. For example, the current version of H.R. 6 – The Energy Policy Act of 2003, uses the phrase “nonmilitary energy laboratories.” However, because DOE has itself referred to the science laboratories as “nondefense” science laboratories in its implementation plan for external regulation, we have further clarified the footnote by adding “nondefense science” laboratories. 12. We did not perform a cost benefit analysis of shifting to external regulation of the science laboratories in this report, and we still question the need to do so. As we Page 42 GAO-03-633R External Regulation of DOE Enclosure II: Comments from the Department of Energy previously reported, in our view “DOE has sufficient information and has had ample time to move forward on external regulation.” At this point, it appears to us that philosophical opposition rather than data limitations is the principal impediment to a shift to external regulation. Besides, while some costs and potential beneficial savings are reasonably quantifiable, others are not. For example, attempting to quantify the cost of any potential decrease in our national security by shifting to external regulation would be as difficult as trying to quantify the benefits of increased public trust in DOE that might be gained by eliminating self-regulation of safety and health functions. As to national security concerns, we would add that we previously reported that officials at comparable foreign defense and nondefense laboratories, all of which accept the presence of external regulators, indicated that they do not share DOE’s concern that external regulation poses a threat to their national security. In addition, our present report identifies at least one oversight scenario that might yield significant savings in safety and health costs that could potentially help support additional research to enhance our national security. (360257) Page 43 GAO-03-633R External Regulation of DOE This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. 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Department of Energy: External Regulation Savings in Safety and Health Activities at DOE Science Laboratories
Published by the Government Accountability Office on 2003-05-14.
Below is a raw (and likely hideous) rendition of the original report. (PDF)