oversight

Nuclear Waste: Department of Energy's Pit 9 Cleanup Project Is Experiencing Problems

Published by the Government Accountability Office on 1997-07-28.

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

                    United States General Accounting Office

GAO                 Testimony
                    Before the Subcommittee on Oversight and Investigations,
                    Committee on Commerce, House of Representatives




For Release
on Delivery
Expected at
                    NUCLEAR WASTE
1:00 p.m. EDT
Monday,
July 28, 1997
                    Department of Energy’s Pit
                    9 Cleanup Project Is
                    Experiencing Problems
                    Statement of Victor S. Rezendes,
                    Director, Energy, Resources, and Science Issues,
                    Resources, Community, and Economic
                    Development Division




GAO/T-RCED-97-221
Mr. Chairman and Members of the
Subcommittee:

              We are pleased to be here today to discuss a major Department of Energy
              (DOE) cleanup project—remediation of wastes buried in Pit 9 at the Idaho
              National Engineering and Environmental Laboratory. As you know, this
              project is very important to DOE because it is one of several projects
              where, through fixed-price contracting and private sector financing, DOE is
              trying to reduce the cost of cleaning up waste sites while shifting the
              consequences of poor performance to the contractors. While we have been
              supportive of DOE’s efforts to reform its contracting practices, we have
              also been concerned that the Department effectively manage this
              transition. Because DOE has several billion dollars targeted for similar
              types of projects, it is important that DOE be able to effectively structure
              and oversee this type of contracting arrangement.

              On the basis of our work for the Committee and the report we are issuing
              today,1 our testimony will address (1) DOE’s basis for selecting a
              fixed-price contracting approach and a subcontract for the project, (2) the
              basis for awarding the subcontract to Lockheed Martin Advanced
              Environmental Systems, and (3) the current status of the project.

              In summary, we found the following:

              •DOE chose a fixed-price approach for the project because Department
              officials believed a fixed price would help limit the project’s total costs
              and provide an incentive for contractors to use efficient practices in
              carrying out the cleanup by shifting the risk of nonperformance to the
              contractor. DOE officials believed they had a better chance of achieving
              these goals with a fixed-price approach than with a cost-reimbursement
              approach, even though uncertainties existed about the actual wastes in the
              pit. DOE also directed its M&O contractor at the Idaho Falls site to conduct
              the procurement process for the selection of a subcontractor and to
              oversee the project.

              •The M&O contractor awarded the subcontract to Lockheed Martin
              Advanced Environmental Systems on the basis of several key factors,
              including the adequacy of its technical proposal, its apparent technical and
              managerial expertise, its successful completion of the test phase, the
              price—about $200 million, and a guarantee of performance—under which
              the company would return all payments received if its treatment system
              failed to work properly. Because of reservations about the maturity of the
              technologies, the M&O contractor expanded the test phase of the

              1
               Nuclear Waste: Department of Energy’s Project to Clean Up Pit 9 at Idaho Falls Is Experiencing
              Problems (GAO/RCED-97-180, Jul. 28, 1997).



              Page 1                                                                         GAO/T-RCED-97-221
Mr. Chairman and Members of the
Subcommittee:




procurement from a review of references and results of prior work to
include pilot scale testing of key aspects of the proposed systems.

•Estimated completion of the project is at least 26 months behind the
original subcontract schedule. Furthermore, the waste retrieval and
processing facilities are not ready, and no retrieval or treatment of wastes
has begun. Instead, DOE has been assessed $940,000 in fines by its
regulators—the state of Idaho and the Environmental Protection
Agency—for failure to meet deadlines for submitting acceptable design
documents. Lockheed Martin Advanced Environmental Systems estimates
that its costs have already exceeded the subcontract price and has
requested $257 million for its work through June 30, 1997, as well as a new
cost-based subcontract to reimburse the company for all future costs.
These changes, if implemented, would bring the total subcontract price for
the Pit 9 cleanup to well over twice its original $200 million value. The
company’s basis for requesting more money is its view that problems with
the project are largely attributable to DOE and its M&O contractor for
improper administration of the subcontract, excessive interference, and
substantially changing the estimate of types and amounts of materials
contained in Pit 9. DOE officials said that it may be several months before
they have an official position on the company’s claims, but DOE and the
M&O contractor disagree with the assessment of what caused the problems
and instead point mainly to the subcontractor’s insufficient application of
technical and management skills on the project.

Discussions are continuing, and the outcome of the disagreement is
uncertain. Meanwhile, because of these contract difficulties and the
related legal implications, the M&O contractor has hired outside legal
counsel for the Pit 9 project and, under the terms of the M&O contract, DOE
is responsible for paying those legal fees. Whatever the outcome, the Pit 9
project, as originally conceived, is clearly a failure. It simply cannot be
completed in the time frame or within the price agreed to by the
subcontractor. This has important future implications because DOE’s
planned investment in privatization cleanup projects is growing—DOE
included over $1 billion in its fiscal year 1998 budget request for 11 such
projects.

Before we provide you with more specifics on these issues, we would like
to briefly describe Pit 9 and the cleanup strategy.




Page 2                                                     GAO/T-RCED-97-221
             Mr. Chairman and Members of the
             Subcommittee:




             Pit 9 is an inactive waste disposal pit, slightly larger than 1 acre in surface
Background   area. From November 1967 through June 1969, various wastes ranging
             from contaminated rags to storage drums with hazardous chemicals and
             plutonium-contaminated sludge were dumped into the pit and covered
             with a layer of soil. DOE estimated that the pit contains about 250,000 cubic
             feet of transuranic and hazardous wastes2 and contaminated soil needing
             treatment. Because the wastes and soil are radioactive, retrieving and
             treating them involves special handling so that workers are not exposed to
             contamination and radioactive materials are not released to the
             environment.

             Starting in 1991, DOE and its regulators began exploring ways to remediate
             Pit 9. They hoped that in doing so, they would also obtain information that
             would help in cleaning up other locations at the Idaho Falls site. DOE and
             its regulators agreed to clean up Pit 9 by retrieving soil and waste from the
             pit, separating those materials that could be returned to the pit without
             treatment, treating the remaining soil and waste to achieve at least a
             90-percent reduction in volume, and packaging the remaining
             concentrated material for on-site storage until final disposal. The project
             was to proceed in three phases—proof-of-process by testing key
             components on simulated wastes, limited production tests on actual pit
             wastes, and then full-scale remediation of pit wastes.

             Pit 9 is one of the first of several privatization projects at DOE sites. DOE’s
             Office of Environmental Management, which is responsible for cleanup
             efforts, intends privatization projects to involve fixed-price, competitively
             awarded contracts. A private contractor would finance, design, build, own,
             and operate any required waste cleanup facilities, and DOE would pay the
             contractor only for a successful cleanup. This fixed-price approach is in
             contrast to the Department’s past practices, where DOE used a
             cost-reimbursement contract, told the M&O contractor how to perform
             waste-related cleanup activities, and paid the M&O contractor regardless of
             what was accomplished.

             Now we will discuss our findings in greater detail.




             2
              Transuranic wastes are man-made radioactive elements produced from uranium during a nuclear
             reactor’s operations and emit alpha particles. Alpha-emitters are dangerous because of inhalation
             concerns. Hazardous wastes are wastes regulated by EPA and authorized states under the Resource
             Conservation and Recovery Act of 1976. Hazardous wastes at Pit 9 include carbon tetrachloride and
             mercury.



             Page 3                                                                       GAO/T-RCED-97-221
                  Mr. Chairman and Members of the
                  Subcommittee:




                  DOE selected a fixed-price approach for the project despite some
DOE Preferred a   indications that this approach was not well suited for an application such
Fixed-Price       as Pit 9. Limited guidance exists on selecting a contract type, but the
Subcontract       Federal Acquisition Regulation (FAR) suggests that a firm fixed-price
                  contract, which best utilizes the basic profit motive of the private sector,
                  should be used when the risk involved is minimal or can be predicted with
                  an acceptable degree of certainty. Given that there was little certainty
                  about the contents of the pit, this guidance seems to suggest that a
                  fixed-price contract may not have been the best approach.

                  Questions about whether a fixed-price approach was appropriate for the
                  Pit 9 cleanup surfaced during the early stages of the procurement process.
                  Responses to the draft request for proposal (RFP) included concerns from
                  interested firms that a fixed-price approach would have to reflect large
                  contingencies and could therefore result in higher bids from the
                  competitors. In addition, these responses stated that a fixed-price
                  subcontract could generate claims for additional reimbursement if work
                  outside the scope of the contract occurred.

                  Even with these concerns, DOE decided to use a fixed-price approach.
                  According to DOE officials at the Idaho Falls site, they realized that a
                  fixed-price approach to this cleanup entailed some risks due to the
                  uncertainties of the pit’s contents. However, DOE also believed there was
                  much to be gained, including information on how to effectively clean up
                  other DOE disposal sites, if this new approach were successful. In addition,
                  DOE had come under criticism from private industry for continuing to fund
                  what was perceived as research and development efforts of its M&O
                  contractors without any actual cleanup. According to senior DOE officials,
                  private industry was confident that it had the technology to clean up the
                  wastes and preferred a fixed-price arrangement. Therefore, senior DOE
                  officials at Idaho Falls and headquarters decided that the potential benefits
                  associated with fixed-price contracting outweighed the possible risks.

                  In conjunction with its decision to use a fixed-price approach to the Pit 9
                  cleanup, DOE also decided to have its M&O contractor—EG&G Idaho,
                  Inc.(EG&G)—conduct the procurement process, select the subcontractor,
                  and oversee the subcontractor’s efforts at Pit 9. According to DOE officials,
                  there were several reasons for choosing a subcontract for this effort:
                  (1) DOE believed that EG&G already had the necessary expertise to
                  evaluate the technical proposals submitted by interested firms and to
                  oversee the cleanup; (2) DOE considered the Pit 9 project to be within
                  EG&G’s area of responsibility; and (3) DOE believed the project could be



                  Page 4                                                      GAO/T-RCED-97-221
                        Mr. Chairman and Members of the
                        Subcommittee:




                        executed more efficiently as a subcontract through EG&G because using
                        the M&O’s procurement and contracting standards would simplify and
                        streamline the procurement process.


                        After several steps to provide information to interested firms, EG&G
Subcontractor           received proposals from three competitors—a team led by Lockheed and
Selected Based on       two other teams, one led by Rust Federal Services (formerly Waste
Proposal, Experience,   Management Environmental Services), and the other by Nuclear Radiation
                        Technologies Corporation. EG&G used a Source Evaluation Board (Board)
Price, and              to review and evaluate the three proposals. The Board determined that the
Performance             Lockheed and Rust proposals were essentially equivalent, but the Board
                        had significant reservations about whether the proposed technologies
Guarantee               were sufficiently developed. According to DOE officials, the private
                        sector—including representatives from the two competing teams—had
                        been telling DOE and EG&G that proven, “off-the-shelf” technology was
                        capable of remediating the wastes in the pit. However, the Board believed
                        that while the components of the proposed systems may have been tested
                        individually, they had never been combined into a total system to treat
                        radiologically contaminated materials.

                        Although the Board had reservations, it also believed that these two
                        technical proposals reflected the best available processes at the time. To
                        mitigate concerns about the proposed technologies, the Board
                        recommended that, in going forward with the procurement, the
                        proof-of-process phase be expanded from a review of references and
                        results of prior work to include pilot scale testing of critical aspects of
                        both treatment systems.

                        Prior to the conclusion of the proof-of-process phase, EG&G sent a request
                        for pricing proposal to both teams. Although DOE’s original intent had been
                        to make no payments until actual remediation began, the request for
                        pricing proposal provided for some design milestone and construction
                        progress payments to keep the overall subcontract price lower by
                        offsetting the subcontractor’s cost of financing. Because of this change in
                        payment strategy, the request for pricing proposal also required a
                        corporate guarantee of performance to protect the government’s interests.
                        Under this corporate guarantee, if the subcontractor’s proposed system
                        did not pass the limited production test at completion of construction and
                        installation, the subcontractor would be required to return all payments
                        made to date. When the Rust team declined to provide the corporate




                        Page 5                                                      GAO/T-RCED-97-221
                      Mr. Chairman and Members of the
                      Subcommittee:




                      guarantee, EG&G deemed Rust to be nonresponsive to the request for
                      pricing proposal and disqualified them from further consideration.

                      The subcontract for the Pit 9 cleanup was signed in October 1994 and
                      included both design milestone and construction progress payments, unit
                      price payments for remediation of the contents of the pit, and lump sum
                      payments for decontamination and decommissioning and profits. Since
                      Lockheed replaced EG&G as the M&O contractor in 1994, to address the
                      potential conflict of interest associated with one Lockheed company
                      overseeing a subcontract with another Lockheed company, the Lockheed
                      M&O contractor prepared an organizational conflict-of-interest mitigation
                      plan that was reviewed and approved by DOE. This resulted in the M&O
                      contractor’s Pit 9 contract administration and oversight group being
                      sequestered from the rest of the organization, and the establishment of a
                      program oversight board to monitor the dealings between the M&O
                      contractor and the subcontractor.


                      Currently, the project is stalled. LMAES estimates it is at least 26 months
Subcontractor Wants   behind the original subcontract completion schedule and that its costs
to Renegotiate        have already exceeded the $200 million subcontract price. LMAES has asked
Contract Because of   for $257.4 million in total reimbursable costs through June 30, 1997.3 For
                      any work conducted after April 1, 1997, LMAES asked to convert the
Schedule and Cost     existing subcontract to a cost-reimbursement basis. These changes, if
Difficulties          implemented, would bring the total subcontract price to well over twice its
                      original $200 million value. Furthermore, LMAES has substantially slowed
                      its work on the project to limit its costs and says it will not resume normal
                      construction activities unless the subcontract is satisfactorily
                      renegotiated.

                      In addition to possible increases in subcontract price, DOE has incurred or
                      will incur other costs related to Pit 9. For example, DOE has paid
                      $23.1 million for testing and preliminary design activities and $12.9 million
                      for project oversight by the M&O contractor, in addition to about $3 million
                      for DOE oversight costs. DOE was also assessed $940,000 in fines by its
                      regulators for failure to meet enforceable deadlines for submitting
                      acceptable design documents for the project, as specified in the Federal
                      Facility Agreement and Consent Order for the Idaho Falls site. DOE will pay
                      the fines and is studying its options for recovering the cost from either the
                      M&O contractor or LMAES. In addition, because of the contract difficulties

                      3
                       LMAES asked for $158.1 million in payments in addition to the $52.9 million already received through
                      March 1997. LMAES expected an additional $46.4 million to be recovered through future milestone
                      payments or some other method.



                      Page 6                                                                         GAO/T-RCED-97-221
                             Mr. Chairman and Members of the
                             Subcommittee:




                             with LMAES, the M&O contractor has hired outside legal counsel for the Pit 9
                             project and, under the terms of the M&O contract, DOE is responsible for
                             paying those legal fees.4


Subcontractor Faults DOE     LMAES blames DOE and its M&O contractor for a large portion of the schedule
for Schedule and Cost        and cost problems. The company stated its case in its Request for
Problems                     Equitable Adjustment to the M&O contractor and DOE. In summary, this
                             document focuses on three main factors that LMAES says were under DOE’s
                             control and led to the schedule and cost problems: (1) improper
                             administration of the fixed-price subcontract, (2) too much interference
                             with a fast-track approach that was necessary to meet contract deadlines,
                             and (3) changing estimates of Pit 9’s contents. LMAES argues that these
                             factors, particularly DOE’s involvement in design activities and changing pit
                             inventories, have materially changed the Pit 9 project from what the
                             subcontract originally required. Therefore, LMAES believes that its
                             corporate guarantee of performance is no longer applicable to the project.

Subcontract Administration   LMAES  says that it undertook the project with the expectation that it would
                             have comparatively more freedom on the privatized, fixed-price Pit 9
                             project than on a project procured under a cost-reimbursement approach,
                             while accepting more risk if it failed. The company assumed there would
                             be minimal government oversight and administration of the
                             subcontractor’s effort, because of DOE’s representation in subcontract
                             specifications that the Pit 9 project was an “integrated ’turnkey’ pilot”
                             effort, with the “subcontractor assuming maximum responsibility,
                             authority, and liability.” In contrast to what it expected, LMAES says that
                             DOE and its M&O contractor actually administered the subcontract using
                             substantial and intrusive oversight that was inconsistent with DOE’s
                             privatization concept. According to LMAES, the amount of oversight was a
                             problem because the number of review comments slowed its efforts and
                             left the company unable to exercise the degree of flexibility it expected
                             when it negotiated the subcontract. In having to respond to this degree of
                             oversight, LMAES said that it was performing unanticipated work, well
                             beyond the subcontract’s scope, in order to keep the project moving
                             forward.



                             4
                              We have previously reported on DOE efforts to control the legal expenses its M&O contractors incur
                             in defending themselves against class action lawsuits. See Managing DOE: The Department’s Efforts to
                             Control Litigation Costs (GAO/T-RCED-96-170, May 14, 1996); Managing DOE: The Department of
                             Energy Is Making Efforts to Control Litigation Costs (GAO/RCED-95-36, Nov. 22, 1994); and Managing
                             DOE: Tighter Controls Needed Over the Department of Energy’s Outside Litigation Costs
                             (GAO/T-RCED-94-264, July 13, 1994).



                             Page 7                                                                       GAO/T-RCED-97-221
                            Mr. Chairman and Members of the
                            Subcommittee:




Fast-Track Schedule         A fast-track, phased construction project is one where design and
                            construction work are performed simultaneously. Design and construction
                            stages are completed in phases so that when the design is completed for
                            part of the project, construction work on that portion of the project
                            begins. LMAES, DOE, and the regulators agreed to a fast-track approach for
                            the project in order to comply with the construction schedule specified in
                            the request for price proposal. LMAES said, however, that a fast-track
                            approach required that the subcontractor be allowed a great deal of
                            discretion in determining the manner, means, and methods of meeting the
                            project requirements within the agreed-upon price and schedule. The
                            company believes that DOE’s oversight and involvement was so excessive
                            as to remove all discretion for reducing the time required for project
                            completion. In addition, LMAES said that DOE did not provide all necessary
                            information in a timely manner, taking an average of 53 days to provide
                            review comments instead of the 30 days to which DOE agreed.

Contents of the Pit         DOE  has limited information as to the actual contents of the pit because, at
                            the time the wastes were placed in the pit, DOE did not intend to later
                            retrieve them. Few records were kept, and DOE has no precise knowledge
                            of what quantities and types of materials are in the pit. However, in 1991,
                            the M&O contractor initially estimated the types and quantities of
                            radioactive and other materials in the pit, based on available shipping
                            records, process knowledge, written correspondence, and other DOE
                            information. Those estimates were included in the subcontract. Then,
                            beginning in 1993, the M&O contractor initiated an effort to develop
                            additional information on all of the disposal pits and trenches at the Idaho
                            Falls site’s subsurface disposal area, including Pit 9. As a result, the
                            estimates for the Pit 9 contents were refined several times, and LMAES cites
                            multiple instances in which those revisions created the potential for
                            substantial changes in the proposed approach to remediating the waste. In
                            particular, LMAES is concerned about possible increases in salts, organics,
                            and radioactive products. These materials could affect both (1) the extent
                            of protection workers need to safely work in the treatment building and
                            (2) the speed at which material could be processed through the melter.


DOE Attributes Most         DOE and its M&O contractor are studying LMAES’ claims and are involved in
Problems to Subcontractor   discussions on how to move the project forward. However, the M&O
Performance                 contractor has notified LMAES that both the M&O and DOE see no
                            justification for converting the subcontract to a cost-reimbursement basis;
                            instead, they expect LMAES to continue performing the subcontract as
                            awarded. DOE officials said that it may be several months before they have



                            Page 8                                                      GAO/T-RCED-97-221
                             Mr. Chairman and Members of the
                             Subcommittee:




                             an official position on LMAES’ other financial claims. However, DOE and the
                             M&O contractor have a substantially different view of why the cleanup is
                             behind schedule and its costs are above the subcontract price. They
                             attribute the schedule delays and cost overruns primarily to the
                             insufficient technical and managerial skills LMAES initially placed on the
                             project.

Subcontract Administration   DOE and its M&O contractor contend that their oversight of the project has
and Fast-Track Schedule      been related to their responsibilities for ensuring adequate consideration
                             of environmental safety and health. DOE, its M&O contractor, and its
                             regulators noted that initially LMAES personnel seemed particularly limited
                             in their knowledge about necessary regulatory requirements, including
                             those related to air emissions and dealing with nuclear materials, and, as a
                             result, submitted inadequate designs. Therefore, DOE and the M&O
                             contractor said that they had to provide much more oversight, including
                             more design review comments, than they expected for a fixed-price
                             subcontract situation. However, DOE officials do not agree that they were
                             slow in providing these review comments, as LMAES contends.

Contents of the Pit          DOE  and its M&O contractor also disagree with LMAES’ contentions regarding
                             the significance of the updated information about the contents of the pit
                             that they shared with LMAES. They noted that the updated information was
                             not a formal revision to the contractual estimate of the pit’s contents, and,
                             therefore, the subcontractor had the discretion whether to use it. DOE and
                             its M&O contractor further noted that LMAES’ subcontract proposal stated
                             that all technologies used in its proposed approach were proven in current
                             industrial-scale applications, and the treatment scheme was “very robust,
                             in that any chemical, radiological, or physical characteristic of waste in Pit
                             9 can successfully be processed.” LMAES also claimed that its treatment
                             scheme ensured that the Pit 9 process could successfully handle other
                             buried or stored transuranic and transuranic mixed wastes as well as
                             low-level mixed wastes and hazardous wastes in the DOE complex. Finally,
                             DOE and M&O contractor officials noted that the subcontract included a
                             clause allowing for future adjustments if differing site conditions were
                             encountered—for example, if the actual pit contents differ from the
                             estimates when excavation occurs.

Insufficient Technical and   DOE and M&O contractor officials said that they believed LMAES’ parent
Managerial Skills            corporation would use its vast worldwide resources to provide the
                             necessary expertise to accomplish the work. However, the officials
                             contend that this did not happen, at least in the early phases of the work.
                             For example, the officials point out that Lockheed reported in a 1995 peer



                             Page 9                                                      GAO/T-RCED-97-221
              Mr. Chairman and Members of the
              Subcommittee:




              review of LMAES’ Pit 9 activities that there was a lack of adequate
              nuclear-experienced personnel to successfully execute the design review
              function, provide environmental safety and health oversight during
              construction, and administer the environmental safety and health
              functions during operations.

              Another problem contributing to lack of progress on the subcontract,
              according to DOE and M&O contractor officials, was the high number of
              times the LMAES project staff has changed—as of May 1997, there have
              been four project managers. LMAES acknowledges the turnover but
              maintains that the administrative approach used by DOE and the M&O
              contractor materially increased the complexity of the requirements
              associated with the project, necessitating the assignment of managers with
              more experience to get the job done. DOE officials said that with these
              frequent changes in leadership, some important actions were left
              unaddressed for a considerable length of time. For example, it was not
              until February 1997, after the current manager was appointed, that LMAES
              developed a complete system requirements document, which compiles the
              system performance and design requirements of the subcontract into one
              place so that managers can more clearly identify what the processes
              should be designed to do.

              DOE  has also faulted the M&O contractor for its performance in overseeing
              the Pit 9 project. DOE attributed the M&O’s declining performance on Pit 9
              to a continued lack of management control systems, an apparent lack of
              accountability in ensuring the timely submittal of two key documents to
              regulators, and weak project management planning and prioritization of
              issues. However, DOE also gave the M&O contractor credit for aggressively
              trying to keep activities on schedule and resolve design-related issues at
              the earliest opportunity. We could not determine the impact of the M&O
              contractor’s performance at Pit 9 on the amount of its overall award fee.
              However, since 1994, DOE has considered the M&O’s overall performance
              under the contract to be “good,” with performance evaluation scores in the
              86 to 90 percent range and performance award fees totaling $33.3 million
              for the 2-year period.


              It remains to be seen whether DOE and its M&O contractor will be able to
Conclusions   hold Lockheed Martin Advanced Environmental Systems accountable for
              the extra project costs, negotiate changes and pay substantially more to
              complete the project, or attempt to recover the government’s investments
              to date. Whatever the outcome, the Pit 9 project, as originally conceived, is



              Page 10                                                    GAO/T-RCED-97-221
           Mr. Chairman and Members of the
           Subcommittee:




           clearly a failure. It simply cannot be completed in the time frame or within
           the price the subcontractor agreed to. This has important future
           implications because DOE’s planned investment in privatization cleanup
           projects is growing—DOE included over $1 billion in its fiscal year 1998
           budget request for 11 such projects. In light of this growing DOE emphasis
           on privatization, the outcome of the Pit 9 subcontract negotiations may
           provide some insight into DOE’s overall ability to achieve privatization
           goals, including lower project costs and the risk of nonperformance
           shifted from DOE to the contractors.


           Thank you, Mr. Chairman and members of the Subcommittee. That
           concludes our testimony. We would be pleased to respond to any
           questions you may have.




(141089)   Page 11                                                    GAO/T-RCED-97-221
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