Secretary of Energy designate Ernest Muniz recently stated that maintaining the status quo in environmental cleanup at the Hanford Nuclear Reservation is not acceptable. We agree. The inefficient cleanup at Hanford, coupled with the ballooning federal deficit, provides an opportunity to make some long-needed changes. We think it is possible to increase work production dramatically while simultaneously reducing the price of work. Government budget sequestration is starting to produce a number of predictable consequences — the Department of Energy and its prime contractors are using the sequester to perform work that might otherwise go to subcontractors and break the Hanford Atomic Metal Trades Council Union. DOE employees are not making any sacrifice whatsoever — not even a single day off. Prime contractors have done layoffs of less than 1 percent of their total work force and announced short work furloughs for some of their employees. However, local subcontractors are being wiped out through suspensions and cancellations of contracts. One, which we are associated with, is in the process of going from an employment count of 86 to five. This contractor is seen as the best on the Hanford site, has the best safety record and has never missed a DOE milestone. Other subcontractors are experiencing the same treatment, and many will not survive these DOE actions. When asked about this, Jack Surash — head of DOE Procurement — said the department intended to rely on its prime contractors to make the best decisions regarding self-performance vs. procuring work through competition to subcontractors. But best for whom — the prime contractors or the American taxpayers? Subcontractors have better safety records than primes, even though they perform the high-hazard work, and they are much more cost effective than a prime contractor performing the same work.
Subcontractors have superior work methods, lack the entitlement mentality of prime contractors, have superior management systems, have more market-based wages and benefits and compete for each job where the prime contractors do not.
There is really only one way forward. The government needs to figure out how it can get more of its business done at less cost. DOE has seven prime contractors on the Hanford site. That means there are many duplicative organizations, such as finance, procurement, human resources, labor relations, facility management and more.
Not only are all of these functions duplicated, they are made even more inefficient by seven differing management systems. This produces inefficiencies. For example, people are not transferrable between prime contractors without retraining at a high cost. There are many other examples we could cite.
Together, these factors increase Hanford total costs by at least$200 million a year over that which would be necessary with a single prime contractor. A single prime contractor is needed to streamline all of the functions at Hanford.
Most people understand that a lack of competition is what produces the entitlement mentality so prevalent at Hanford and other DOE sites. This coupled with the management bureaucracy DOE has created produces unnecessary high costs to accomplish work a minimum of four times, and in some cases 10 times, greater than would be paid for the same work outside the Hanford environment.
This makes for some very unhappy customers — the U.S. taxpayers.
The current business model is based on the production of nuclear material for weapons purposes. That mission ended 25 years ago. A new business model is overdue. The answer clearly is competition.
A single prime contractor should support DOE as a contract management organization, routinely putting all work out for competing bids. The work requirements should be consistent with an environmental cleanup objective with a management system focused solely on outcome — not process.
We are aware this would be a significant change and that the status quo will be threatened. People need to remember, however, that unless we change our ways, we have zero chance of ever attracting new missions to Hanford. Completion of Hanford cleanup will be jeopardized.
Now is the time for our political leaders to work with a new secretary of Energy to make the dramatic change required.
Sid Morrison represented Washington’s 4th Congressional District for 6 terms, from 1981 to 1993. Valoria Loveland represented the 16th Legislative District from 1993-2001.