Facing cuts, Energy IG recommends sweeping changes

Wednesday - 11/16/2011, 9:55am EST

By Jack Moore
Federal News Radio

Facing likely budget cuts, the Energy Department's inspector general has issued a slew of recommendations, including cutting redundant staff, appointing a BRAC-like commission to study the department's facilities and federalizing the contractors that secure those facilities.

Those are among a list of possible recommendations included in Energy IG Gregory Friedman's report, dated Nov. 10, on the management challenges the department faces.

"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," he wrote in the report. "While the elements of various budget reduction plans under consideration differ on key details, dramatic change appears likely, and the impact on the department's operations could be equally dramatic."

BRAC-like study of labs

The IG report points to Energy's $10.4 billion stable of 16 federally funded research-and-development centers, in addition to a "broad array" of other facilities, which are mostly managed by contractors.

Friedman recommended a commission modeled on the Defense Department's Base Realignment and Closure plan to review the department's facilities.

Cost reports indicate Energy may be spending as much as 35 percent to 40 percent of total laboratory operating costs on overhead and administrative functions, according to the IG report, which may simply be "unsustainable in the current budget environment."

Using BRAC "as a guide," the department should establish an independent panel to examine its research facilities and alternatives to the current organization structure.

Streamlining NNSA

Friedman also said Energy should take a close look a the National Nuclear Security Administration, an agency separately organized within Energy. Created in 2000 out of concern for nuclear safety, the agency, which has its own human resources and acquisition officials, has evolved into an entity that duplicates functions carried out by the larger department.

These redundancies are not only expensive, the report stated, but also add another bureaucratic layer and complicate the department's operations.

The National Academy of Sciences is now studying three of Energy's major national labs and the work that each does. That report could be the jumping-off point for a larger review of how NNSA is organized within Energy, the IG report said.

Federalizing security staff?

Finally, the report said Energy should rethink its "gates and guards" strategy — the physical security of its facilities.

About $1 billion is spent each year on a security staff of 4,000 — almost entirely contractors. But there are inconsistent practices for hiring them. Some are hired as subcontractors, while others are brought on through stand-alone prime contracts.

Friedman said all options should be on the table. This includes a "master contract" using a single security contractor nationwide and, even, federalizing the department's security staff.

'Unpleasant realities'

In the introduction to the report, Friedman noted the "unavoidable and perhaps unpleasant realities" the department faces no matter what cost-saving tactics it adopts.

About 60 percent to 70 percent of Energy costs are eaten up by personnel. So, any cost-saving plans would likely have to include politically tough and "painful cutbacks" to the department's 115,000 employees and contractors.

Consolidating or shuttering Energy facilities presents its own set of management headaches. The IG report said doing so would be "challenging, tumultuous and involve navigating a maze of internal and external 'moving parts.'"