Energy Employees Compensation:

Actions to Promote Contract Oversight, Transparency of Labor's Involvement, and Independence of Advisory Board Could Strengthen Program

GAO-08-4: Published: Oct 26, 2007. Publicly Released: Oct 26, 2007.

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Congress enacted a program to compensate Department of Energy employees and contractors in the atomic weapons industry who developed work-related illnesses. Department of Labor (Labor) administers the program using estimates of workers' likely radiation exposure to decide claims. The estimates are produced by Health and Human Services' (HHS) National Institute for Occupational Safety and Health (NIOSH) and reviewed by the Advisory Board on Radiation and Worker Health. NIOSH awarded a contract to Oak Ridge Associated Universities (ORAU) to help carry out its work. GAO examined: (1) costs and oversight of NIOSH's contracts, (2) implementation of the conflict of interest policy for NIOSH and its contractors, (3) the extent of Labor's involvement in NIOSH's activities and actions to deny benefits, and (4) challenges to advisory board independence and options to enhance it. GAO reviewed contract files, examined Labor's comments on NIOSH documents, and analyzed data on cases sent to NIOSH for rework.

ORAU's contract costs almost tripled from $70.1 million to $198.7 million because the original cost estimate significantly underestimated program complexity and resources needed. The contractor ran into complexities such as unavailable or incomplete radiation monitoring records, forcing the use of more staff resources to estimate workers' radiation exposure. Labor costs were particularly expensive because of the need for technical expertise. NIOSH established procedures to monitor overall contractor performance and focused on expediting claims processing, achieving considerable progress. However, its oversight of contractor costs was insufficient and NIOSH relied primarily on external audits to validate labor charges. These audits are not a substitute for preventive controls needed to ensure that the agency reimburses only allowable costs charged by the contractor. NIOSH has issued a comprehensive conflict of interest policy. Because there are a limited number of experts with knowledge of Energy sites, the contractor often hires individuals who previously worked at these sites, and this policy attempts to incorporate their input while avoiding conflicts of interest that could have a detrimental effect on claimants. Most policy provisions have been implemented, but with some delays. As a result, NIOSH has not yet audited disclosure forms or imposed any applicable penalties. Labor's extensive involvement in commenting on draft NIOSH technical documents used to estimate radiation doses and returning cases to NIOSH for rework did not indicate a systematic effort to deny benefits paid to claimants, but Labor's rationale for its comments was not always transparent. A detailed explanation was needed for GAO to understand how certain comments made the NIOSH documents more clear and consistent and how this would facilitate Labor's adjudication of cases. For example, one comment suggested that NIOSH was being overly favorable to claimants and upwardly biasing their dose estimates by using data from a group of monitored workers at a particular site to estimate radiation doses for unmonitored workers at other sites. However, Labor explained it was seeking clarification to adjudicate cases where claimants might object to their estimate being based on a site where they had never worked. GAO's analysis of the 2,811 cases that Labor returned to NIOSH for rework as of March 2007 did not indicate an effort to deny benefits because 87 percent of the cases had less than a 50 percent probability of causation, based on NIOSH's initial dose reconstruction, and thus likely would have been denied. While GAO did not find evidence that the advisory board was impeded in performing its statutory duties, issues pertaining to the board's funding structure, member appointment process, and support staff present challenges to its independence. Various options are available to enhance independence such as appropriating funds in a separate line item for the board, establishing bipartisan Congressional involvement in appointing board members, and developing procedures to ensure support staff is independent of the program.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The House passed H.R. 5687 to amend the Federal Advisory Committee Act to improve the balance, transparency, and independence of federal advisory committees (which would include the Advisory Board on Radiation and Worker Health). The bill's provisions address a number of aspects of federal advisory committees, including conflict of interest disclosure of appointed individuals, independent reporting, and prospective member selection process.

    Matter: In light of the potential vulnerabilities of the Advisory Board on Radiation and Worker Health, Congress may wish to consider the options related to funding, appointment of members, and advisory board reporting that we have identified to further enhance the independence of the advisory board.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HHS agreed there is merit to establishing a more formalized process for identifying and selecting advisory committee designated federal officers. NIOSH developed an internal policy containing criteria to guide the selection of the Designated Federal Official (DFO) for the Advisory Board on Radiation and Worker Health. These criteria specify that federal officials who fill key supporting roles to the Advisory Board are independent of the NIOSH Dose Reconstruction Program. The policy was subsequently solidified with the CDC Federal Advisory Committee Management Team.

    Recommendation: To further enhance the independence of the President's Advisory Board on Radiation and Worker Health, the Secretary of HHS should implement the agency's regulatory responsibility under the Federal Advisory Committee Act to develop procedures to ensure that the advisory board's work is not unduly influenced by the appointing authority or any special interests. These procedures could include a provision specifying that federal officials who fill key board support roles must be independent of the dose reconstruction program.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: Labor agreed with our recommendation and noted that it is now including the rationale and basis for its written comments on NIOSH documents. In its review of NIOSH technical documents used for dose reconstruction, Labor's comments explicitly state that their intent is to make the NIOSH document more clear and consistent, which will facilitate Labor's adjudication of claims.

    Recommendation: To increase transparency and facilitate congressional oversight of Labor's involvement in NIOSH activities, the Secretary of Labor should take steps to ensure that Labor's comments on draft NIOSH technical documents and special exposure cohort petition evaluations more explicitly indicate how the comments are intended to promote clarity and consistency, and thereby facilitate Labor's adjudication of claims. This could include a brief explanation accompanying Labor's comments on each NIOSH document, that would adequately describe Labor's specific rationale for its comments.

    Agency Affected: Department of Labor

  3. Status: Closed - Implemented

    Comments: In response to GAO's recommendation regarding strengthening oversight of contract costs, CDC's Procurement and Grants Office drafted new operating procedures covering the review and payment of contractor invoices using additional supporting documentation. Under the contract with Oak Ridge Associated Universities (ORAU), the contracting officer receives detailed spreadsheets every month which include a breakdown of billed costs by subcontractor. These reports go to the contracting officer and program analyst. The procedures are in draft form and are expected to be implemented by December 31, 2011.

    Recommendation: To strengthen NIOSH's oversight of costs incurred in the dose reconstruction program and improve NIOSH's review and approval process for contractor billings, the Secretary of Health and Human Services should direct the Director of Centers for Disease Control and Prevention's Procurement and Grants Office to establish a policy and procedures to periodically assess the prime contractor's oversight of subcontractor costs to determine if there are any deficiencies and corrective actions needed and assess whether the controls can be sufficiently relied on to ensure that subcontractor payments are allowable, reasonable, and in compliance with all Federal Acquisition Regulations and contract requirements.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: CDC's Procurement and Grants Office determined new operating procedures covering the review and payment of contractor invoices using additional supporting documentation. Under the contract with Oak Ridge Associated Universities (ORAU), the contracting officer receives detailed spreadsheets every month which include a breakdown of billed costs by subcontractor. These reports go to the contracting officer and program analyst. The procedures are expected to be implemented by December 31, 2011.

    Recommendation: To strengthen NIOSH's oversight of costs incurred in the dose reconstruction program and improve NIOSH's review and approval process for contractor billings, the Secretary of Health and Human Services should direct the Director of Centers for Disease Control and Prevention's Procurement and Grants Office to establish appropriate policies and procedures for effective review and approval of the prime contractor's invoices. Such policies and procedures should specify the steps to be performed for review and approval, the individuals responsible for carrying out these steps, the level of invoice detail needed to perform an appropriate review, and the appropriate documentation to be maintained of that review process.

    Agency Affected: Department of Health and Human Services

 

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