Inside Watchdog Suggests Radical Changes in DOE Labs

Want some provocative ideas for reforming the sprawling network of laboratories and environmental cleanup programs run by the U.S. Department of Energy (DOE)? Then pick up a copy of a notably out-of-the-box special report released this week by Gregory Friedman, DOE's inspector general (IG). It offers some "difficult to implement and highly controversial" ideas for shaking up the agency—such as launching a Pentagon-style effort to close and consolidate DOE's 16 national laboratories.

For more than a decade, Friedman and his fellow IG office watchdogs have been putting out annual reports on the management challenges facing DOE. Even by Washington standards, the reports have been extremely sober and carefully worded analyses of organizational snafus and potential budget potholes. They usually make for a pretty eye-glazing read; the 2000 edition, for instance, offered this snooze-inducing insight: "Logistical and organizational issues must be resolved; expectations, responsibilities, and authorities must be established; and, human capital issues must be addressed." Indeed.

This year, however, Friedman takes a different tack. "The Department and the Federal government in general face a new challenge," he writes. "We know of no other time in recent memory when there was such a broad and bipartisan consensus concerning the need to reduce Federal spending and address the Nation's mounting debt. … [D]ramatic change appears likely, and the impact on the Department's operations could be equally dramatic."

Noting that political leaders have challenged DOE to "think outside its comfort zone" about ways of addressing the coming budget crunch, Friedman offers five relatively radical ideas for addressing some "seemingly unavoidable and perhaps unpleasant realities."

One proposal is to create something like the military's 2005 Base Realignment and Closure (BRAC) Commission, which oversaw efforts to shrink the Pentagon's infrastructure, to rationalize DOE's research and development laboratories. "These facilities, with wide variations in mission, range in size from Ames Laboratory with an annual appropriation of approximately $30 million to Sandia National Laboratories with a budget of more than $2.3 billion," the report notes. But a 2009 analysis found that administrative and support costs suck up about one-third of the $10.4 billion spent by the labs. That "cost structure, specifically the proportion of scarce science resources diverted to administrative, overhead, and indirect costs for each laboratory, may be unsustainable in the current budget environment," Friedman concludes. An independent BRAC-like panel could "examine alternatives for evaluating, consolidating, and/or realigning the Department's R&D laboratory complex."

Another is to use an outside body, such as the U.S. National Academies' National Research Council, to propose ways to "reprioritize" DOE's efforts to clean up hundreds of contaminated sites using "a form of environmental remediation triage." The agency currently estimates it could cost $250 billion to complete the cleanups, but "the current strategy may not be sustainable if the Department's remediation budget suffers major reductions," the report notes. Instead, using a medical strategy drawn from hospital emergency rooms, DOE would first use available funds to cleanup sites that pose the highest risks to health and safety. The agency would also move to reduce costs by winning agreements with state and federal environmental officials to meet less-strict cleanup standards. Getting those agreements, however, "would be a very costly and time-consuming process," the report notes, "and would, understandably, be extremely unpopular with a variety of constituencies."

A third recommendation calls for applying a new evaluation process created by Energy Secretary Steven Chu—called the Quadrennial Assessment—to DOE's entire science program. So far, it has been used only for the agency's technology research programs.

Two final ideas involve streamlining DOE's National Nuclear Security Agency by eliminating the duplication of programs and staff, and reviewing how DOE provides security at its laboratories.

Such suggestions "are intended to provide a starting point for any conversation," the report notes. "We are mindful of the fact that they represent approaches which could be both difficult to implement and highly controversial."

That's for sure, says Michael Lubell, a longtime DOE watcher at the American Physical Society in Washington, D.C. The cleanup reform, for instance, "may make perfect sense," he says, "but politically it is a lead balloon."

And although there may be some opportunities to save money by eliminating lab overlap in a BRAC-like process, "there's not a lot of redundancy left in the system," Lubell says. "You've got labs that have developed pretty distinct missions over the last few decades." That was less true 15 years ago, he adds, when a high-profile, independent commission led by then-Motorola executive Robert Galvin explored similar ideas for consolidating DOE laboratories. Then, "you did have some labs that did very similar things." Today, however, labs have "morphed," he says, and have "a lot of infrastructure at each site that is distinct. It would be very tough to consolidate."

So far, Friedman's report has gotten the silent treatment from DOE leaders, who haven't commented publicly. And it has not exactly lit a fire among lawmakers in Congress. Senator Jeff Bingaman (D-NM), chair of the Senate Energy and Natural Resources Committee, told reporter John Fleck of the Albuquerque Journal that he was skeptical that it would carry much weight on Capitol Hill. "I haven't heard any serious conversation about it in Congress or here in Washington," Bingaman said.

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