oversight

DOE Management: Opportunities for Saving Millions in Contractor Travel Costs

Published by the Government Accountability Office on 1999-04-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to the Subcommittee on Energy
                  and Water Development, Committee on
                  Appropriations, House of
                  Representatives

April 1999
                  DOE MANAGEMENT
                  Opportunities for
                  Saving Millions in
                  Contractor Travel
                  Costs




GAO/RCED-99-107
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Resources, Community, and
                   Economic Development Division

                   B-282146

                   April 1, 1999

                   The Honorable Ron Packard
                   Chairman
                   The Honorable Peter J. Visclosky
                   Ranking Minority Member
                   Subcommittee on Energy and
                     Water Development
                   Committee on Appropriations
                   House of Representatives

                   The Department of Energy (DOE) incurs hundreds of millions of dollars in
                   travel costs each year. About 80 percent of these costs are incurred by the
                   contractors managing and/or operating the Department’s various facilities.
                   DOE has been concerned about travel costs and in 1995 implemented a
                   5-year, $175 million travel cost-reduction initiative to reduce travel costs
                   by $35 million per year, of which $30 million would come from
                   contractors. Because of your concern about the Department’s contractor
                   travel costs, you requested that we examine certain issues related to these
                   costs and DOE’s cost-reduction efforts. As discussed with your office, we
                   agreed to (1) provide information on the travel costs incurred by DOE
                   contractors and their primary destinations during fiscal years 1996 through
                   1998, (2) identify the purpose of this travel, and (3) assess the success that
                   DOE has had in reducing contractor travel costs and identify additional
                   actions available to reduce these costs further. In addition, we agreed to
                   examine the travel and other costs associated with contractor employees
                   on assignment to Washington, D.C.


                   Travel costs incurred by DOE contractors were reduced from $261 million
Results in Brief   in fiscal year 1995 to $223 million in fiscal year 1996. Since then, travel
                   costs have increased—to $249 million by fiscal year 1998—even though
                   funding to the contractors during this period had been decreasing. About
                   96 percent of the contractors’ travel was to domestic locations, the most
                   frequent of these being Washington, D.C. and the sites of DOE’s major
                   laboratories and test facilities: Albuquerque, New Mexico; Oakland/San
                   Francisco, California; Las Vegas, Nevada; and Los Alamos, New Mexico.
                   The most frequent foreign destinations were Russia, the United Kingdom,
                   Germany, France, and Japan.

                   The purpose of most travel—about 70 percent—was reported as being for
                   business reasons, that is, travel for purposes related to the mission of the




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             facilities. This category included trips to attend meetings or perform
             research. In a few instances, we identified trips that were miscategorized
             or were of questionable value to DOE. For example, business trips included
             travel to obtain advanced degrees. The second most frequently cited travel
             purpose was for attending conferences. According to DOE’s Inspector
             General, the large number of conference attendees is a concern. For
             example, the Inspector General identified hundreds of DOE contractor staff
             attending a 1997 conference in Vancouver, British Columbia, resulting in
             travel costs of about $1 million.

             DOE’s success in reducing contractor travel costs has been limited.
             Although contractor travel costs have increased since fiscal year 1996,
             they have remained below the fiscal year 1995 level—the level that DOE
             established as a baseline for calculating contractor travel cost savings.
             However, only in fiscal year 1996 did DOE attain the expected $30 million
             savings in contractor travel by achieving a $38 million reduction in that
             year. Contractors did not continue to achieve such savings because DOE
             did not enforce its cost reduction targets and some contractors did not
             have an overall strategy or plan to achieve lower travel costs. Greater
             emphasis on travel management—controlling the amount of travel—and
             travel cost control—minimizing airfare costs and other travel costs—could
             result in additional travel cost savings.

             DOE spends millions of dollars on travel and other costs for contractor
             employees on temporary or permanent assignment to Washington, D.C. A
             1997 DOE Inspector General report identified over 800 contractor
             employees from field locations working in Washington and costing DOE
             over $76 million annually, which includes significant living allowances.
             DOE has recognized problems with controlling this practice. The
             Department has reduced the number of contractor employees in
             Washington and is planning on further reductions. However, concerns
             exist over the additional compensation that contractors are providing for
             employees on long-term temporary assignments to cover the tax liabilities
             on their living allowances.

             We are making recommendations to the Secretary of Energy designed to
             reduce contractor travel costs and to clarify DOE’s policy on allowable
             travel costs.


             To carry out its missions, DOE relies on contractors for the management,
Background   operation, maintenance, and support of its facilities. DOE headquarters and



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                       its field offices oversee 34 major contractors at DOE sites throughout the
                       country. The activities that these contractors conduct serve a variety of
                       DOE missions, such as managing environmental cleanup, including the safe
                       treatment, storage, and final disposal of radioactive wastes; developing
                       energy technologies for transportation systems, efficient building systems,
                       and utilities; and maintaining the safety, security, and reliability of the U.S.
                       nuclear weapons stockpile.

                       In support of these activities, contractors’ staff travel domestically and
                       internationally to collaborate with officials in DOE programs, other federal
                       programs, industry, academia, and foreign countries. All of these trips add
                       up to hundreds of millions of dollars spent on airfare, hotels, meals, and
                       other direct travel expenses. DOE contracts spell out the allowable costs
                       that contractors can charge for travel expenses. Although these contracts
                       vary, the five contractors that we reviewed are generally allowed to
                       provide for employees the actual and reasonable costs for lodging and
                       transportation and a maximum daily amount for meals. Air travel is to be
                       via coach or the lowest discount fare available. However, airfare discounts
                       available to federal government employees are generally not available to
                       contractors.

                       Concerned with the cost of travel in its programs, DOE included travel cost
                       reductions in its 1995 Strategic Alignment and Downsizing Initiative. This
                       initiative aimed to reduce Department-wide funding by $1.7 billion over a
                       5-year period beginning in fiscal year 1996. The initiative targeted a
                       $175-million cost saving for travel over the same period. This saving would
                       be achieved by maintaining travel costs at a level $35 million below the
                       fiscal year 1995 level. DOE’s fiscal year 1995 travel cost was $307 million, of
                       which $261 million was for contractor travel and $46 million was for
                       federal travel.1 DOE anticipated a $30 million saving each year from
                       contractor travel and a $5 million annual saving from federal travel.
                       According to DOE officials in the Office of the Chief Financial Officer, these
                       reduction levels represented amounts that the Department believed to be
                       reasonable and achievable savings goals.


                       Travel costs incurred by DOE contractors were reduced in fiscal year 1996,
Contractor Travel      but since then these costs have been increasing. Thirty-four DOE
Costs Are Increasing   contractors reported that during the fiscal year 1996-98 period, they spent
                       over $700 million on direct travel costs. Annual contractor travel costs

                       1
                        The original fiscal year 1995 baseline totaled $324 million, of which $54 million was federal travel and
                       $270 million was contractor travel. However, DOE has created a new baseline for fiscal year 1995
                       travel costs to improve consistency with travel costs reported in later years.



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were reduced to about $223 million in fiscal year 1996 but increased to
about $241 million in fiscal year 1997 and to about $249 million in fiscal
year 1998. More than half of the reported travel was incurred by five
contractors at DOE’s Oak Ridge, Sandia, Los Alamos, and Livermore
facilities.2 The details on the cost of travel and the number of trips
reported by each of the 34 contractors are contained in appendix I.

The increase in DOE contractor travel costs since fiscal year 1996 is more
dramatic when contrasted with other variables, such as the contractors’
overall funding and staffing. For example, at the same time that travel
costs were increasing, funding for contractors was decreasing.
Specifically, travel costs increased 12 percent from fiscal year 1996 to
fiscal year 1998, while overall funding to contractors decreased by about
1 percent. As a result, travel costs took a larger portion of the contractors’
funding. For each $1,000 of contractor funding, the average amount
needed for travel rose from $16.24 in fiscal year 1996 to $18.32 in fiscal
year 1998.3 Similarly, while the number of trips taken remained fairly
stable for this period, the number of contractor staff at the facilities
decreased about 10 percent, increasing the average number of trips per
person. Figure 1 illustrates the trends in travel costs, funding, staffing, and
the number of trips over the past 3 fiscal years.




2
 Lockheed Martin Corporation has two subsidiaries at Oak Ridge—Lockheed Martin Energy Systems,
Inc., which manages activities at DOE’s Y-12 Plant, and Lockheed Martin Energy Research
Corporation, which manages the Oak Ridge National Laboratory.
3
 Some contractors spent as little as $1.87 for travel per $1,000 of funding, while others spent as much
as $33.73 per $1,000 of funding. (See app. II.)



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Figure 1: Percent Change in Trips,
Costs, Funding, and Staffing Levels for
DOE Contractors From Fiscal Year
1996 to Fiscal 1998




                                          Legend

                                          FY = fiscal




                                          The primary domestic and foreign destinations of DOE contractors were
                                          Washington, D.C., and Russia, respectively. Most of the travel conducted
                                          by contractors—96 percent—was to domestic locations. Trips to
                                          Washington, D.C., accounted for about 11 percent of all domestic trips.
                                          For fiscal year 1998 alone, 34 DOE contractor sites reported making over
                                          20,000 trips to Washington, D.C., costing at least $20 million.4 More than
                                          percent of these trips were taken by five contractors. For example, Sandia
                                          National Laboratory reported taking over 4,500 trips to Washington, D.C.,
                                          in fiscal year 1998 or the equivalent of about 87 trips each week.
                                          Albuquerque, New Mexico, which is the destination for such sites as
                                          Sandia and the DOE Albuquerque Operations Office, was the second most
                                          frequent domestic destination, accounting for 8 percent of the domestic

                                          4
                                           Total costs for travel to Washington, D.C., are understated, since not all contractors reported costs by
                                          location, and two—Sandia National Laboratories and Lawrence Berkeley National Laboratory—were
                                          able to identify only airfare costs.



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                          trips taken. The remaining top destinations were Oakland/San Francisco,
                          California; Las Vegas, Nevada; and Los Alamos, New Mexico.

                          For foreign travel—accounting for 4 percent of the travel—contractors
                          most frequently listed Russia as the top destination. For fiscal year 1996 to
                          fiscal year 1998, DOE contractors took 3,829 trips to Russia, or about
                          15 percent of all foreign trips. The second most frequent foreign
                          destination was the United Kingdom, which accounted for 6 percent of all
                          foreign trips. The remaining top foreign destinations were Germany,
                          France, and Japan.

                          Costs are increasing for both domestic and foreign travel, but the greatest
                          percent increase is occurring in foreign travel. Although foreign travel
                          represents only 4 percent of the trips, it represents 11 percent of the travel
                          cost. From fiscal year 1996 to fiscal year 1998, foreign travel costs
                          increased by about 53 percent. More frequent trips to Russia have
                          significantly contributed to this increase. The number of trips to Russia
                          increased 107 percent from fiscal year 1996 to fiscal year 1998, and the
                          cost of these trips has more than tripled. Costs increased from about
                          $2.2 million in fiscal year 1996 to about $6.7 million in fiscal year 1998.
                          According to contractor officials, one reason for the increase in foreign
                          travel, particularly to Russia, was that there is a greater emphasis on
                          nuclear nonproliferation work abroad.


                          DOE contractors reported that most travel to domestic and foreign
Most Travel Is Related    locations was for business purposes, that is, travel for purposes related to
to Facilities’ Missions   the mission of the facilities. This category accounted for about 70 percent
                          of all travel for fiscal years 1996 through 1998. The next most frequent
                          travel category was for attending conferences. The remaining trips were
                          for training, recruitment, and other purposes. Figure 2 provides
                          information on the major travel categories reported by DOE contractor
                          sites.




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Figure 2: Major Purposes for DOE
Contractor Travel, Fiscal Years
1996-98




                                   The largest category—business—covered a wide variety of activities. Our
                                   review of travel documentation showed that employees take trips to meet
                                   with DOE officials, perform field tests, conduct various reviews and
                                   inspections related to warhead components, or perform other activities
                                   directly related to accomplishing the contractor’s mission. Some trips
                                   categorized as business had dual purposes, such as to attend a conference
                                   and to conduct meetings with industry.

                                   Although it was generally difficult to determine the reasonableness of such
                                   trips, we identified some business trips that were not directly related to or
                                   needed for accomplishing the facility’s mission. For example, Los Alamos
                                   National Laboratory funded a number of trips for its employees to obtain a
                                   master of business administration degree, many of which were categorized
                                   as business trips. In fiscal year 1998, 24 laboratory employees were
                                   enrolled in courses held at the University of New Mexico’s main campus in
                                   Albuquerque—about 100 miles from Los Alamos. These employees made
                                   at least 380 trips to attend class. Various expenses were incurred,
                                   including the cost of overnight hotel stays, rental cars, and meals. For
                                   example, one laboratory employee made 38 trips to Albuquerque in fiscal
                                   year 1998, spending about $5,321. We brought this practice to the attention
                                   of DOE officials, who subsequently determined that the cost of travel and
                                   per diem while attending these classes is not justified. These officials have




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                       determined that in the future, such costs for travel and per diem will not
                       be allowable under the contract.

                       Attending conferences accounts for the second most frequent travel
                       category. For the 3-year period from fiscal year 1996 through fiscal year
                       1998, DOE contractors reported making 56,205 trips to conferences—about
                       15 percent of the categorized trips—costing about $59 million. However,
                       this figure may be understated, since we found that for at least one
                       contractor, some conference trips were categorized as business trips. The
                       DOE Inspector General has raised concerns about the large number of
                       attendees at individual conferences. In a December 1998 report, the DOE
                       Inspector General concluded that some conferences were attended by
                       many DOE contractor participants.5 The report cited a May 1997 particle
                       accelerator conference in Vancouver, British Columbia, that was attended
                       by 520 DOE contractor employees (as well as 5 DOE employees), resulting in
                       travel costs of about $1 million. In another case, 176 DOE and DOE
                       contractor participants attended a January 1996 human genome
                       conference in Santa Fe, New Mexico. The Inspector General also reported
                       that, contrary to government policy, DOE had no internal procedures to
                       minimize the number of conference attendees. In response to the
                       Inspector General’s report, DOE issued requirements and responsibilities
                       for conference management on March 22, 1999. Among other things, the
                       requirements are intended to better ensure that the number of DOE and
                       contractor employees attending conferences is minimized.


                       DOE is aware of the high costs being incurred for travel and has developed
Success in Reducing    cost-reduction goals to help limit these costs. A substantial amount of
Travel Costs Limited   these reductions was projected to be obtained from the contractors.
                       However, DOE has had limited success. Although DOE surpassed its goal in
                       fiscal year 1996, it did not reach its annual goals in subsequent years
                       because it did not achieve the travel cost savings that it anticipated from
                       its contractors. To increase cost reductions in contractor travel, DOE and
                       the contractors will have to take additional actions. These could include
                       reducing the number of trips taken by contractor employees, obtaining
                       lower airfares for contractors, and adopting best contractor practices for
                       other allowable costs.




                       5
                        Inspection of the Department of Energy’s Conference Policies and Practices, DOE/IG-0433 (Dec. 1998).



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Cost-Reduction Efforts for   DOE and the contractors have taken actions to reduce travel costs. In
Contractor Travel Not        implementing its travel cost-savings initiative, DOE first set an overall
Fully Successful             cost-savings target and then allowed its contractors to establish their own
                             cost-savings measures. According to DOE officials, the Department
                             basically established an overall target—a reduction of about $35 million
                             below the travel costs for fiscal year 1995—and conveyed to each
                             contractors specific targets necessary to achieve the total reduction.
                             However, DOE did not establish measures to enforce these targets, nor was
                             it prescriptive as to how these cost reductions were to be achieved.

                             DOE contractors reported to us that they initiated a number of efforts to
                             reduce travel costs. These activities included greater use of
                             videoconferencing to reduce the number of trips and efforts to reduce the
                             costs of airline tickets. For example, some contractors made block
                             purchases of discount airline tickets, increased the use of Saturday night
                             stays for travelers when feasible, and negotiated discounts on airfares.
                             Furthermore, the contractors consolidated travel services and negotiated
                             discounts on hotel rooms. However, while all five contractors that we
                             visited were undertaking some efforts to reduce travel costs, none could
                             provide us with an overall strategy or plan to achieve the initiative’s travel
                             cost-savings targets. Instead, the level and type of effort taken varied by
                             contractor. For example, one contractor reported that as travel costs
                             neared the target, contractor officials directed programs to limit their
                             travel so that their target would not be exceeded. Officials for another
                             contractor told us that they basically do not follow the targets.

                             The contractors have not done their part to meet the target of a $30 million
                             annual reduction in their travel costs. They met the first year’s
                             reduction—achieving a $39 million, or 15-percent, reduction. Since then,
                             however, contractor travel costs have risen each year, and by fiscal year
                             1998, travel costs were only $16 million—6 percent—below the levels for
                             fiscal year 1995. However, DOE is on track to meet its overall cost-savings
                             goals only because DOE’s federal travel costs have been reduced
                             significantly beyond the expected $5 million annually. Federal travel costs
                             have been reduced each year, and for fiscal year 1998 represent a
                             $15 million, or 32-percent, reduction from the level for fiscal year 1995.
                             Figure 3 shows the amount of travel cost savings in both DOE federal and
                             contractor travel, as compared with the expected savings targets.




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Figure 3: DOE Contractor and Federal Travel Cost Savings in Fiscal Years 1996-98




                                          Dollars in millions

                                          Legend

                                          FY = fiscal year




Additional Actions Could                  DOE contractors need to contribute a larger share of travel cost savings in
Further Reduce Travel                     order for DOE to meet its overall travel cost-reduction targets over the next
Costs                                     2 years. Cost savings opportunities could result from improvements in
                                          travel management—the overall management of travel and trips
                                          taken—and travel cost control—the reduction of costs incurred when on
                                          travel. Although some cost-reduction actions are occurring by contractors
                                          in these areas, additional efforts are needed to reduce the number of trips
                                          and expand best practices for controlling travel costs.

Reduce the Number of                      The quickest and potentially easiest way to reduce travel costs is to reduce
Contractor Trips                          the number of trips taken. During fiscal years 1996-98, even though the
                                          number of contractor staff has dropped and some contractors reported
                                          that they increased the use of video and teleconferencing, the number of
                                          trips taken by DOE contractors had not been reduced. The number of trips
                                          was approximately the same for each of the 3 years—about
                                          200,000—according to the data that we obtained from contractors that
                                          were able to provide the number of trips for that period. Furthermore,
                                          some individuals take many trips. Some contractor employees have taken




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                       up to 52 trips in a single year, have been on travel status for over 200 days
                       in a year, and incurred travel costs as high as $96,000.

                       To reduce the number of trips requires effective overall travel
                       management. Yet, there are few contractor management controls over the
                       number of trips taken, which may be reflected in the contractors’ overall
                       lack of success in reducing the number of trips. None of the facilities that
                       we visited had established managerial controls over the extent of travel or
                       set cost targets. In most instances, travel expenses were absorbed into a
                       large program budget, limited only by each specific program’s availability
                       of funds. Although some managers whom we talked with said that they do
                       review proposed travel to ensure that it has a programmatic purpose or
                       limit attendance at conferences, they generally rely on their staffs to take
                       trips only when necessary. In fact, the program managers responsible for
                       approving travel told us that they were unaware of DOE’s cost-reduction
                       targets and therefore did not make specific efforts to reduce travel to meet
                       them.

                       Despite the contractors’ reliance on their employees to limit the number of
                       trips they take, individual travelers stated that they have little control over
                       their travel. They said that much of their travel is dictated by the needs of
                       the organizations providing the funding for their programs. Many staff
                       whom we talked with stated that they had to take trips, particularly to
                       Washington, D.C., that they felt were unnecessary. For example, one
                       senior official from Lawrence Livermore told us that despite alternative
                       options available, such as videoconferencing, he felt compelled to travel to
                       Washington, D.C., 15 times in the past year to attend program meetings or
                       risk a reduction in program funding. Another frequent traveler said that
                       DOE officials ask him to travel to attend meetings, in the event that
                       technical questions might be asked, and if no such questions are asked, he
                       returns home without accomplishing much. In most cases, travelers felt
                       that they had to attend these meetings because they view DOE as their
                       customer and the sponsoring program in Washington wanted their
                       attendance. Contractor staff added that DOE often requires them to travel
                       so that DOE staff do not have to travel, thus reducing DOE’s travel costs
                       while at the same time increasing contractors’ travel costs.

Reduce Airfare Costs   In the area of cost control, the biggest single element of travel costs is
                       airfare. For example, about one-half of the travel cost incurred by the
                       contractor at Oak Ridge was for the purchase of airline tickets. In contrast,
                       airfare cost for DOE federal employee travel is much lower—about
                       35 percent of travel costs. A major reason for this difference is the airfare



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discounts that the federal government obtains for federal employees. The
General Services Administration negotiates and contracts for discount
airfares with airlines and generally obtains discounted, unrestricted fares.
These discounts, however, are not available to federal contractors, and the
cost difference can be substantial. For example, a typical coach-fare flight
from San Francisco to Washington, D.C. in September 1998 cost about
$200 for a federal employee but about $1,300, on average, for a Lawrence
Livermore employee.

Efforts to get lower airfare rates have met with limited success. In the
past, DOE contacted airlines and requested that they extend their federal
discounts to DOE contractors. However, only one airline responded to DOE’s
request, and its proposal proved unfeasible. Currently, the General
Services Administration is considering plans in 2000 to solicit proposals
from airline carriers for airfare rates for government contractors.
However, General Services Administration officials are not optimistic that,
if a solicitation for contractor airfares is made, the airlines will respond
favorably to it. We noted that contractors have had some success in this
area. They are negotiating discounts directly with the airlines and have
been successful in getting reductions from full-fare rates.

Nevertheless, contractors could take additional actions to reduce the
airfare costs they are incurring. The most significant action is obtaining
nonrefundable tickets. A nonrefundable ticket is a ticket for which the
purchase price will not be returned if the trip is canceled. However, the
ticket can be exchanged for another for a small additional charge.
Nonrefundable tickets are generally less expensive and although the
savings will depend on the individual circumstances—such as destination,
ticket availability, ticket class, and the number of days the ticket is
purchased in advance—they can be substantial. An internal audit report at
Pacific Northwest National Laboratory found that the savings on
nonrefundable tickets were typically around 50 percent. Specific examples
that we identified had also shown significant savings. For example, at
Livermore one employee purchased a $1,602 refundable airline ticket to
attend a conference while another employee purchased a $414
nonrefundable ticket the next day to the same conference. In another
instance, an employee purchased a $473 refundable ticket, also to attend a
conference, while another employee purchased a nonrefundable ticket a
week later to go to the conference for $255.

However, the usage of nonrefundable tickets varied greatly among
contractors. For example, Livermore’s travel data showed that about



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                                   75 percent of the tickets purchased by travelers were nonrefundable and
                                   Sandia estimated that about 65 percent of its tickets were purchased on a
                                   nonrefundable basis. However, the percentage for Los Alamos was
                                   significantly lower. Los Alamos estimated that its nonrefundable ticket
                                   usage at less than 5 percent. The contractors’ travel management staff said
                                   that contractor employees are responsible for selecting the flights and
                                   tickets that they want to use and that the contractor encourages, but does
                                   not require, the use of nonrefundable tickets. They added that employees
                                   often do not like to use nonrefundable tickets because their travel plans
                                   frequently change or are canceled.

Reduce Other Allowable Costs       Controlling other allowable travel costs that contractor employees incur
                                   could further reduce travel expenses. Consistent with its contract with
                                   DOE, each contractor has its own allowable rates or criteria for costs that
                                   its employees incur for hotels, meals, rental cars, and other incidental
                                   expenses. However, in certain instances, costs allowed by some
                                   contractors are more generous than those allowed by others, as illustrated
                                   below:

                               •   The contractors at Oak Ridge and Pacific Northwest National Laboratory
                                   use federal per diem rates as a general standard for allowable hotel costs.
                                   However, Lawrence Livermore and Los Alamos do not and, instead, allow
                                   hotel rates that are deemed reasonable. These allowable rates can be
                                   significantly higher than the federal lodging rates. We found instances
                                   where Lawrence Livermore allowed hotel costs in Washington, D.C., that
                                   were $284 per night; in Orlando, Florida, that were $218 per night; in
                                   Monterey, California, that were $303 per night; and in Las Vegas, Nevada,
                                   that were $176 per night. In each instance, the federal hotel rate, which
                                   other contractors follow, would have been over 50 percent less.
                               •   Both Lawrence Livermore and Los Alamos allow actual daily meal costs of
                                   up to $46 on any domestic trip. In contrast, the meal costs allowed by
                                   other contractors were up to the rate under federal travel regulations ($30
                                   to $42 per day, depending on location) or, in the case of Oak Ridge, up to
                                   $35 per day. Although not all Livermore and Los Alamos employees use
                                   the full $46 allowance, we did note instances where the full $46 meal
                                   allowance was charged every day.
                               •   One contractor established a policy that allows employees to stay in
                                   higher-priced hotels when attending conferences but does not then allow
                                   the travelers rental cars. However, we saw instances where other
                                   contractors allowed their employees to stay in higher-priced hotels for
                                   conferences and to obtain rental cars. We noted one instance in which two
                                   employees from one contractor both went to the same conference in



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                       Atlanta, stayed in a hotel costing up to $158 per night, and obtained rental
                       cars.

                       While some of these cost savings, when taken individually, may not be
                       substantial, they could add up to considerable savings when taken
                       together. For example, a reduction of just $100 on the average trip to
                       Washington, D.C., would amount to total yearly savings of over $2 million.

                       Other, more fundamental changes in allowable costs could result in
                       greater travel savings. At least one contractor has established a policy for
                       other allowable costs that resulted in lower rates than the federal per
                       diem. The contractor at Pacific Northwest National Laboratory charged
                       DOE the lower of the actual travel costs incurred by its employees or the
                       federal per diem rate and shared with DOE any cost savings that the
                       contractor obtained below federal per diem rates. During fiscal year 1998,
                       the contractor continued to follow this policy even though this savings
                       incentive program was not included in its contract with DOE. However,
                       according to contractor officials, the fiscal year 1999 contract with DOE
                       again does not provide for this program and it is therefore not being
                       continued.


                       DOE spends millions of dollars on the costs associated with management
Millions Spent         and operating contractor employees assigned temporarily or permanently
Annually for           to Washington, D.C. In fiscal year 1997, over 800 contractor employees
Contractor Employees   were assigned to Washington, costing $76 million for the employees’
                       salary, living allowance, relocation cost, and other related expenses. DOE’s
on Assignment to       Office of Inspector General raised concerns about the Department’s
Washington, D.C.       awareness of, and control over, these assignments, and DOE has taken
                       actions to reduce the number of employees on assignments and plans to
                       reduce it further. However, a concern remains about the payments that
                       contractors are making to employees on long-term temporary assignments
                       for their increased tax-related costs.

                       Contractor employees are often assigned to Washington on a
                       temporary—either short-term or long-term (more than 1 year)—or
                       permanent basis to provide technical expertise associated with the stated
                       mission of the employee’s home facility. DOE requires that contractor staff
                       assignments to Washington are not to be for providing administrative or
                       management support, or performing functions reserved for federal
                       employees. Currently, some contractor employees have been in




                       Page 14                                       GAO/RCED-99-107 DOE Management
B-282146




Washington for over 5 years, and at least 14 contractor employees have
been there for over 10 years.

The costs of employees on assignments are paid by specific DOE programs
or, in some cases, are a general administrative expense paid by DOE under
the various contracts. The costs to DOE for a contractor employee assigned
to work in Washington can be significant, ranging from $5,000 per month
to $29,000 per month (or as much as $348,000 per year). The costs for
assignments include not only the employee’s salary and benefits and
applicable contractor charges but also expenses for moving the employee
to Washington and various living allowances provided for the employee
while on assignment. The living allowances are provided for employees to
offset the expenses that they incur during an assignment. Each contractor
has its own formula or methodology for determining this compensation,
but it is generally tied to per-diem rates for the Washington area. Under
these formulas, the compensation can total $50,000 annually or more.
Appendix III provides details on the additional compensation provided for
employees on assignment for the five contractors we visited.

Concerns about the cost and number of employees on assignment to
Washington have been raised by DOE’s Office of Inspector General. In
December 1997, the Inspector General reported that DOE was spending at
least $76 million annually for field contractor support in Washington, D.C.6
Furthermore, although the Department was required to maintain an
inventory of these employees, it was unaware of the magnitude of
contractor personnel in Washington. The Inspector General identified over
800 field contractor employees in Washington—almost twice the number
listed in the DOE inventory. Moreover, the Inspector General determined
that, contrary to DOE requirements, many contractor employees were
providing support and administrative services.

DOE has since taken actions to reduce the number of, and improve its
controls over, contractor personnel assigned to Washington. The
Department has established a policy limiting the use of field contractor
employees in Washington and has reduced the number of contractor
employees on assignment there. According to a January 1999 DOE report to
the House Committee on Appropriations,7 the Department reduced the
number of employees on assignment to Washington by 235 as of

6
Audit of the Department of Energy’s Management of Field Contractor Employees Assigned to
Headquarters and Other Federal Agencies, DOE/IG-0414 (Dec. 1997).
7
Department of Energy: Use of Management & Operating Contractor Employees Supporting DOE in
Washington D.C., Use of Support Services Contractors (Jan. 1999).



Page 15                                                   GAO/RCED-99-107 DOE Management
B-282146




January 1998 through attrition, reductions, and reassignments, and by an
additional 59 as of January 1999. According to DOE, this brings the level of
contractor assignments down to 379.8 DOE expects to reduce the number of
contractor employees assigned to Washington by another 10 percent by
the end of fiscal year 1999. DOE is also drafting an order that revises the
requirements for the use and management of contractor employees.

Although DOE is addressing the issue of contractor employees in
Washington, D.C., and reducing their number, concerns still remain about
the amount of living allowance that employees are receiving during their
assignment. At four of the five facilities we visited, the contractors have a
two-tiered living allowance that pays a higher amount for employees on
temporary assignments of 1 year or longer. This is because the living
expenses provided for employees become taxable when the assignment is
longer than 1 year. Consequently, the contractors provide higher
additional compensation to offset the tax liability. For example, Los
Alamos provides its employees on assignments to Washington, D.C., for
longer than 1 year with (1) a basic living allowance of 80 percent of the
federal lodging rate for the Washington area and (2) an additional
40 percent of the basic allowance, for a total of about $4,200 per month in
fiscal year 1998. Only one contractor we visited—Battelle at DOE’s
Richland, Washington location—did not follow this practice. However,
Battelle officials said that they are currently requesting that DOE approve a
revised living allowance that would include a higher rate for employees on
assignments that last longer than 1 year.

The allowability of these additional payments, however, is unclear. A DOE
Notice provides requirements on headquarters’ use of contractor
employees. A specific objective of the notice is to establish limitations on
payments to employees whose assignments exceed 1 year. The notice
states that, for any assignment that exceeds 365 days, payments to the
affected employee for any additional tax burden caused by the long-term
assignment is unallowable in accordance with the Department’s
acquisition regulations. However, the cited acquisition regulations relate
to reimbursed relocation costs for permanent changes of duty—not
long-term assignments.

DOE’s Office of General Counsel recognizes that the Department does not
have a consistent and well-articulated position on allowing contractors to

8
 This total does not include certain contractor employees who were included in the amounts identified
by the Inspector General. These employees are working for other federal agencies, assigned under
statutorily authorized intergovernmental personnel agreements, assigned to the Nuclear Emergency
Search Team, or working under the Yucca Mountain contract based in Washington, D.C.



Page 16                                                      GAO/RCED-99-107 DOE Management
              B-282146




              pay for employees’ additional taxes caused by long-term assignments.
              According to an Office of General Counsel official, there are valid
              arguments on both sides of the issue. Much depends on (1) the
              interpretation of contract provisions, or the absence of such provisions,
              that would make the payments allowable or unallowable and (2) whether,
              after a certain period of time, a temporary assignment becomes
              tantamount to a permanent relocation and therefore the relocation rules
              should apply. According to the General Counsel official, the issue of
              long-term assignments of contractor employees to headquarters has
              top-level attention and concern within the Department and is being closely
              monitored by DOE management.


              The lack of substantial travel cost reductions from contractors stems
Conclusions   largely from a lack of overall travel management by DOE and its
              contractors. In this regard, DOE has set targets for its contractors to
              achieve but has not enforced them or ensured that its overall contractor
              travel cost-savings target was met. For its part, DOE contractors were
              aware of the targets, but many contractors did not translate this into an
              overall strategy or plan to achieve lower travel costs. Furthermore,
              consistent practices for reducing costs have not been put into place. In our
              view, it is difficult to justify why some contractors allow their staff to stay
              in high priced hotels, purchase higher priced airline tickets, or charge
              higher meal costs when others take stronger actions to minimize such
              costs. Similarly, the payments that contractors are making to employees
              on long-term temporary assignments for their tax-related costs are also
              being implemented inconsistently, and the allowability of such costs has
              not been resolved.

              A number of relatively simple ways are available to achieve substantial
              cost reductions. However, a commitment—by both DOE and the
              contractors—will be required to reduce the number of trips, reduce the
              cost of airfares, and reduce other allowable travel costs. This means that
              DOE, as an organization, needs to make clear what cost reductions are
              expected, contractors need to improve both their travel management and
              travel cost control, and DOE program areas will have to lessen their travel
              demands on contractor staff. Furthermore, achieving cost reductions will
              require that DOE develop clear policies and guidance on the travel-related
              costs it will deem allowable.




              Page 17                                        GAO/RCED-99-107 DOE Management
                     B-282146




                     To reduce contractor travel costs, consistent with DOE’s cost-reduction
Recommendations      targets for travel, we recommend that the Secretary of Energy set travel
                     cost targets for each contractor and require that contractors not exceed
                     these targets. The target amounts should be conveyed to both the
                     contractors and DOE program areas for a combined commitment to ensure
                     that the cost reductions are achieved. Furthermore, to implement more
                     consistent travel cost reimbursement practices, the Secretary should
                     establish clear DOE policy on allowable costs—both travel costs and the
                     reimbursement of tax-related costs—and, when new contracts are let,
                     incorporate the policy into the contracts.


                     DOE agreed that there are additional opportunities to achieve travel cost
Agency Comments      savings and generally concurred with the report’s recommendations. With
and Our Evaluation   regard to the first recommendation, DOE stated that it will establish travel
                     cost targets, in collaboration with program offices and contractors, to
                     ensure a combined commitment to cost reductions. Furthermore, DOE will
                     promote alternatives to travel and will heighten headquarters and field
                     managers’ awareness of the cost of contractor travel to headquarters.
                     However, DOE did not specifically agree to require that contractors not
                     exceed its travel cost targets. In our view, firm targets are necessary to
                     provide DOE with the control needed to ensure that travel costs are
                     effectively managed and that its savings objectives are achieved;
                     consequently, we continue to recommend that DOE require that its
                     contractors not exceed the targets that it establishes.

                     In commenting on the second recommendation—to establish clear DOE
                     policy on allowable travel costs—DOE said it will evaluate the merits of
                     establishing standard rates, such as federal per diem rates, for the
                     reimbursement of contractor travel. DOE also agreed to determine the
                     appropriate treatment of the tax consequences of extended temporary
                     assignments and promulgate departmental guidance, which will be
                     incorporated into new contracts. The complete text of DOE’s comments is
                     included as appendix IV.


                     To determine the amount of travel incurred by DOE contractors, the
Scope and            primary destinations of this travel, and the travel purposes, we collected
Methodology          data from the 34 management and operating contractors identified in DOE’s
                     Strategic Alignment and Downsizing Initiative. We requested data on the
                     cost of travel and the number of trips taken in fiscal years 1996 to 1998, as
                     well as the most frequent travel destinations in each of those fiscal years.



                     Page 18                                       GAO/RCED-99-107 DOE Management
B-282146




We also requested information on the purpose of travel, as well as each
contractors’ staffing and funding levels during fiscal years 1996 to 1998.
We did not independently verify the data that the contractors provided. We
also compared the data with other information available at the five sites
we visited—the Oak Ridge National Laboratory and Y-12 Plant in Oak
Ridge, Tennessee; the Hanford Reservation in Richland, Washington; the
Lawrence Livermore National Laboratory in Livermore, California; the Los
Alamos National Laboratory in Los Alamos, New Mexico; and the Sandia
National Laboratories in Albuquerque, New Mexico. Such information
included contractors’ internal self-assessments of their data and travel
systems and internal audit reports. In general, we found that the data were
reliable for the purpose for which they were used.

At each of the facilities we visited, we reviewed pertinent contracts,
regulations, and guidance that detailed the controls over travel costs and
the allowability of such costs. We obtained and reviewed internal audit
reports on travel costs and the propriety of these costs. We also
judgmentally selected contractor employees’ travel vouchers for review to
determine if the costs for airfare, hotels, rental cars, and other expenses
were appropriate. We met with travel officials at each facility and
discussed with them the management of travel costs and the efforts being
taken to reduce these costs. Finally, we interviewed travelers, supervisors,
and managers to obtain their perspectives on the amount of and need for
the travel taken and on the methods for reducing these costs.

We obtained and reviewed documentation from DOE on its Strategic
Alignment and Downsizing Initiative and its plans for achieving the
initiative’s cost-savings goals. We discussed with officials from the Office
of the Chief Financial Officer and the Office of Management and
Administration the Department’s efforts to reduce contractor travel costs
and obtained their viewpoints on the contractors’ control of travel and
efforts to meet the current cost-reduction targets.

To examine the travel and other costs associated with contractor
employees in Washington, D.C., we obtained information at each facility
that we visited on the rationale and procedures for approving and
conducting off-site assignments and obtained listings of the individuals on
such assignments. We also obtained information on the additional
compensation provided for employees while on assignments.
Furthermore, we discussed contractor assignments to Washington, D.C.,
with DOE’s Office of General Counsel and with DOE officials in the Office of
Management and Administration who are responsible for maintaining the



Page 19                                       GAO/RCED-99-107 DOE Management
B-282146




inventory of assignees and for developing management controls for
contractor assignments. We obtained and reviewed relevant DOE
documents and Inspector General audit reports that addressed the costs
and controls over contractor assignments.

We conducted our review from August 1998 through March 1999 in
accordance with generally accepted government auditing standards.


As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after the
date of this letter. At that time, we will provide copies of this report to
Senator Ted Stevens, Chairman, Senate Committee on Appropriations;
Senator Robert C. Byrd, Ranking Minority Member, Senate Committee on
Appropriations; the Honorable Bill Richardson, Secretary of Energy; and
the Honorable Jacob J. Lew, Director, Office of Management and Budget.
We will make copies available to others on request.

Please call me at (202) 512-8021 if you or your staff have any questions
about this report. Major contributors to this report include William F.
Fenzel, John R. Schulze, Christopher M. Pacheco, and Patricia J. Rennie.

Sincerely yours,




(Ms.) Gary L. Jones
Associate Director, Energy, Resources,
  and Science Issues




Page 20                                        GAO/RCED-99-107 DOE Management
Page 21   GAO/RCED-99-107 DOE Management
Contents



Letter                                                                                         1


Appendix I                                                                                    24
DOE Contractor
Travel Costs and
Number of Trips
During Fiscal Years
1996-98
Appendix II                                                                                   26
DOE Contractor
Travel Costs Per
Thousand Dollars of
Funding, Fiscal Years
1996-98
Appendix III                                                                                  30
Living Allowances
Currently Provided by
Various DOE
Contractors for
Employees on
Assignment in
Washington, D.C.,
Area
Appendix IV                                                                                   31
Comments From the
Department of Energy
Figures                 Figure 1: Percent Change in Trips, Costs, Funding, and Staffing        5
                          Levels For DOE Contractors From Fiscal Year 1996 to Fiscal 1998




                        Page 22                                    GAO/RCED-99-107 DOE Management
Contents




Figure 2: Major Purposes for DOE Contractor Travel, Fiscal Years       7
  1996-98
Figure 3: DOE Contractor and Federal Travel Cost Savings in           10
  Fiscal Years 1996-98




Abbreviations

DOE        Department of Energy


Page 23                                    GAO/RCED-99-107 DOE Management
Appendix I

DOE Contractor Travel Costs and Number
of Trips During Fiscal Years 1996-98


Dollars in thousands
                                                           FY 1996                    FY 1997                   FY 1998
                                                                  Number of                  Number of                 Number of
Contractor              DOE site                   Total cost         trips     Total cost       trips    Total cost       trips
Iowa State University   Ames Laboratory                   $857         1,194         $713          921         $694           757
The University of       Argonne National
Chicago                 Laboratory                       10,473       10,353       10,162        9,517        9,583         8,646
RMI Environmental       Ashtabula
Services                Environmental
                        Management Project                  84           119          107          152           90           161
CBS Corporation         Bettis Atomic Power
                        Laboratory                         830           995          988        1,236        1,189         1,308
Brookhaven Science      Brookhaven National
Associates              Laboratory                        5,102        7,464        4,879        6,576        5,239         6,045
Battelle                Columbus
                        Environmental
                        Management Project                  76            76           51           54           39            47
Universities Research Fermi National
Association, Inc.     Accelerator
                      Laboratory                          3,951        4,770        4,049        4,860        4,223         4,978
Fluor Daniel Fernald    Fernald
                        Environmental
                        Management Project                1,878 Not available       1,633 Not available       1,811 Not available
Hanford                 Hanford
Environmental Health
Foundation                                                 186           168          136          123          110           121
Fluor Daniel Hanford,   Hanford
Inc.                                                      4,754        4,450        2,723        2,612        2,868         2,543
Lockheed Martin         Idaho National
Idaho Technologies      Environmental
Company                 Engineering
                        Laboratory                       10,653        8,164       12,195        8,542       11,134         8,520
Allied Signal           Kansas City Plant
Aerospace FM&T                                            4,757        5,933        4,432        5,707        5,401         5,847
Lockheed Martin         Knolls Atomic Power
Corporation             Laboratory                        1,139        1,988        1,449        2,450        1,561         2,699
University of California Lawrence Berkeley
                         National Laboratory              5,173        7,455        7,126        8,189        7,114         8,311
Univeristy of California Lawrence Livermore
                         National Laboratory             30,634       24,678       33,793       24,565       36,812        26,791
University of California Los Alamos National
                         Laboratory                      28,573       32,347       35,830       36,855       37,864        36,784
Babcock & Wilcox of     Miamisburg
Ohio                    Environmental
                        Management Project                 711 Not available          490 Not available         172 Not available
                                                                                                                       (continued)



                                               Page 24                                           GAO/RCED-99-107 DOE Management
                                               Appendix I
                                               DOE Contractor Travel Costs and Number
                                               of Trips During Fiscal Years 1996-98




Dollars in thousands
                                                           FY 1996                          FY 1997                       FY 1998
                                                                   Number of                        Number of                    Number of
Contractor             DOE site                    Total cost          trips        Total cost          trips       Total cost       trips
Midwest Research       National Renewable
Institute              Energy Laboratory                  4,794 Not available             5,001             3,870       4,920         3,790
Wackenhut Services,    Nevada Test Site
Inc.                                                       101               77                87             63          102           81
Bechtel Nevada         Nevada Test Site                   5,896 Not available             6,604             6,396       7,049         6,871
TRW Environmental      Nevada Test Site
Safety Systems, Inc.                                      1,884 Not available             4,485              936        4,217          755
Oak Ridge              Oak Ridge Institute
Associated             for Science and
Universities           Education                          3,821          3,096            4,377             3,492       4,493         4,028
Lockheed Martin        Oak Ridge National
Energy Research        Laboratory
Corporation                                              12,710         12,674          13,737             12,371      14,194        12,445
Lockheed Martin        Oak Ridge Y-12 Plant
Energy Systems, Inc.                                      8,916         10,608            9,093             9,064       8,307         6,945
Battelle               Pacific Northwest
                       National Laboratory               12,965          9,942          14,246             10,326      15,681        12,387
Mason & Hanger         Pantex Plant
Corporation                                               5,059          4,359            4,659             3,809       4,399         3,291
Princeton University   Princeton Plasma
                       Physics Laboratory                  992           1,447            1,449             1,705       1,559         1,685
Kaiser Hill            Rocky Flats
                       Environmental
                       Technology Site                    1,911          1,220            1,965             1,218       1,586          910
Sandia Corporation     Sandia National
                       Laboratories                      39,364         37,324          40,633             35,111      41,574        35,634
Westinghouse           Savannah River Site
Savannah River
Company                                                   9,547          6,022            8,669             5,157       9,673         5,686
Wackenhut Services,    Savannah River Site
Inc.                                                       429             503              514              519          537          574
Stanford University    Stanford Linear
                       Accelerator Center                 2,307 Not available             2,201             1,573       2,029         1,655
Westinghouse Electric Waste Isolation Pilot
Company               Plant                               1,520          1,623            1,342             1,825       1,850         2,004
West Valley Nuclear    West Valley
Services, Inc.         Demonstration Project               526             602              696              709          937          913
Totals                                               $222,571          199,651        $240,513            210,503    $249,010       213,213

                                               Notes: Columns may not total due to rounding.

                                               The table includes subcontractor travel reported to GAO.




                                               Page 25                                                      GAO/RCED-99-107 DOE Management
Appendix II

DOE Contractor Travel Costs Per Thousand
Dollars of Funding, Fiscal Years 1996-98


              Contractor                                DOE Site
              Iowa State University                     Ames Laboratory
              The University of Chicago                 Argonne National Laboratory
              RMI Environmental Services                Ashtabula Environmental Management
                                                        Project
              CBS Corporation                           Bettis Atomic Power Laboratory
              Brookhaven Science Associates             Brookhaven National Laboratory
              Battelle                                  Columbus Environmental Management
                                                        Project
              Universities Research Association, Inc.   Fermi National Accelerator Laboratory
              Fluor Daniel Fernald                      Fernald Environmental Management
                                                        Project
              Hanford Environmental Health Foundation   Hanford
              Fluor Daniel Hanford, Inc.                Hanford
              Lockheed Martin Idaho Technologies        Idaho National Environmental Engineering
              Company                                   Laboratory
              Allied Signal Aerospace FM&T              Kansas City Plant
              Lockheed Martin Corporation               Knolls Atomic Power Laboratory
              University of California                  Lawrence Berkeley National Laboratory
              University of California                  Lawrence Livermore National Laboratory
              University of California                  Los Alamos National Laboratory
              Babcock & Wilcox of Ohio                  Miamisburg Environmental Management
                                                        Project
              Midwest Research Institute                National Renewable Energy Laboratory
              Wackenhut Services, Inc.                  Nevada Test Site
              Bechtel Nevada                            Nevada Test Site
              TRW Environmental Safety Systems, Inc.    Nevada Test Site
              Oak Ridge Associated Universities         Oak Ridge Institute for Science and
                                                        Education
              Lockheed Martin Energy Research           Oak Ridge National Laboratory
              Corporation
              Lockheed Martin Energy Systems, Inc.      Oak Ridge Y-12 Plant
              Battelle                                  Pacific Northwest National Laboratory
              Mason & Hanger Corporation                Pantex Plant
              Princeton University                      Princeton Plasma Physics Laboratory
              Kaiser Hill                               Rocky Flats Environmental Technology Site
              Sandia Corporation                        Sandia National Laboratories
              Westinghouse Savannah River Company       Savannah River Site
              Wackenhut Services, Inc.                  Savannah River Site
              Stanford University                       Stanford Linear Accelerator Center



              Page 26                                          GAO/RCED-99-107 DOE Management
                                Appendix II
                                DOE Contractor Travel Costs Per Thousand
                                Dollars of Funding, Fiscal Years 1996-98




  Funding in millions                     Travel Costs in thousands            Travel cost per $1000 funding
FY96         FY97       FY98              FY96         FY97            FY98     FY96          FY97             FY98
 $33           $29       $27              $857          $713           $694    $26.36       $24.25         $25.40
 476           460       460          10,473          10,162           9,583    22.00        22.09             20.83

   9            15        14                 84          107             90      9.23          7.18             6.38
 304           302       294               830           988           1,189     2.73          3.27             4.05
 407           405       400              5,102        4,879           5,239    12.54        12.05             13.10

  24            17        16                 76           51             39      3.17          3.00             2.44
 264           273       282              3,951        4,049           4,223    14.97        14.83             14.98

 269           275       295              1,878        1,633           1,811     6.97          5.94             6.15
  12            12        10               186           136            110     15.76        11.72             11.22
1,121        1,152       920              4,754        2,723           2,868     4.24          2.36             3.12

 677           618       587          10,653          12,195          11,134    15.74        19.73             18.97
 336           358       353              4,757        4,432           5,401    14.16        12.38             15.30
 307           279       275              1,139        1,449           1,561     3.71          5.19             5.67
 192           220       214              5,173        7,126           7,114    26.98        32.36             33.21
 951         1,120      1,274         30,634          33,793          36,812    32.21        30.18             28.89
1,110        1,250      1,327         28,573          35,830          37,864    25.75        28.67             28.53

 115           112        92               711           490            172      6.18          4.38             1.87
 179           158       176              4,794        5,001           4,920    26.78        31.65             27.95
  17            16        18               101            87            102      5.79          5.47             5.72
 251           296       290              5,896        6,604           7,049    23.46        22.35             24.32
 256           255       300              1,884        4,485           4,217     7.36        17.59             14.06

 112           126       147              3,821        4,377           4,493    33.99        34.66             30.56

 576           546       561          12,710          13,737          14,194    22.07        25.14             25.28
1,116          751       806              8,916        9,093           8,307     7.99        12.11             10.31
 504           497       465          12,965          14,246          15,681    25.71        28.68             33.73
 287           291       269              5,059        4,659           4,399    17.63        16.01             16.35
  65            65        59               992         1,449           1,559    15.26        22.29             26.42
 556           586       618              1,911        1,965           1,586     3.44          3.35             2.57
1,314        1,300      1,341         39,364          40,633          41,574    29.96        31.26             31.00
1,421        1,317      1,252             9,547        8,669           9,673     6.72          6.58             7.73
  56            56        58               429           514            537      7.73          9.21             9.26
 188           181       179              2,307        2,201           2,029    12.27        12.16             11.34
                                                                                                       (continued)


                                Page 27                                          GAO/RCED-99-107 DOE Management
Appendix II
DOE Contractor Travel Costs Per Thousand
Dollars of Funding, Fiscal Years 1996-98




Contractor                                 DOE Site
Westinghouse Electric Company              Waste Isolation Pilot Plant
West Valley Nuclear Services, Inc.         West Valley Demonstration Project
Totals
Average




Page 28                                            GAO/RCED-99-107 DOE Management
                                    Appendix II
                                    DOE Contractor Travel Costs Per Thousand
                                    Dollars of Funding, Fiscal Years 1996-98




    Funding in millions                       Travel Costs in thousands                     Travel cost per $1000 funding
  FY96         FY97         FY98              FY96           FY97             FY98            FY96         FY97             FY98
    76            93          88              1,520          1,342           1,850            19.92       14.37             21.09
   123           120         126               526             696             937             4.28         5.80             7.44
$13,704      $13,550      $13,594       $222,571         $240,513        $249,010
                                                                                              16.24       17.75             18.32
                                    Note: The table includes subcontractor travel reported to GAO.




                                    Page 29                                                    GAO/RCED-99-107 DOE Management
Appendix III

Living Allowances Currently Provided by
Various DOE Contractors for Employees on
Assignment in Washington, D.C., Area

                                             Assignments of 1 year or      Assignments greater than
Contractor               DOE site            less                          1 year                   Permanent assignments
Lockheed Martin Energy   Oak Ridge           •55% of current federal       •100% of current federal      •25% of base pay cost of
Systems, Inc.                                travel regulations per diem   travel regulations rate       living differential
                                             rate                          •Additional 10% of base
                                             •Additional 10% of base       pay field premium
                                             pay field premium             •Additional 10% of base
                                             •Additional 10% of base       pay location allowance
                                             pay location allowance
Sandia Corporation       Sandia National     •55% of current federal       •100% of current federal      •15%-18% of base pay
                         Laboratories        travel regulations per diem   travel regulations rate       living differential (declining
                                             rate                          •10% of base pay              to zero after 5 years)
                                             •10% of base pay              assignment allowance          •$1,000 miscellaneous
                                             assignment allowance          •$1,000 miscellaneous         allowance
                                                                           allowance
University of            Los Alamos          •55% of current federal       •80% of current federal       •None
California               National Laboratory travel regulations per diem   housing allowance
                                             rate                          •40% “plus-up” of housing
                                                                           allowance to cover
                                                                           additional tax liabilities
University of            Lawrence           •55% of current federal        •Actual and reasonable        •$1,000 miscellaneous
California               Livermore National travel regulations rate for    costs, plus an additional     allowance
                         Laboratory         stays of 1 to 6 months         allowance to cover
                                            •Actual and reasonable         additional tax liabilities
                                            costs for stays of 6 to 12     •$1,000 miscellaneous
                                            months                         allowance
                                            •$1,000 miscellaneous
                                            allowance
Battelle                 Pacific Northwest   •60%-85% of federal travel    •60%-85% of federal travel    •20% of base salary cost of
                         National Laboratory regulations lodging rate      regulations lodging rate      living adjustment (declining
                                                                                                         to zero after 5 years)




                                            Page 30                                                GAO/RCED-99-107 DOE Management
Appendix IV

Comments From the Department of Energy




              Page 31        GAO/RCED-99-107 DOE Management
Appendix IV
Comments From the Department of Energy




Page 32                                  GAO/RCED-99-107 DOE Management
           Appendix IV
           Comments From the Department of Energy




(141222)   Page 33                                  GAO/RCED-99-107 DOE Management
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