Nuclear Waste:

DOE's Estimates of Potential Savings From Privatizing Cleanup Projects

RCED-97-49R: Published: Jan 31, 1997. Publicly Released: Feb 11, 1997.

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Victor S. Rezendes
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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) efforts to privatize the cleanup of radioactive wastes at its Hanford site, focusing on the accuracy of the information provided in DOE's fiscal year (FY) 1997 congressional budget request on the six projects DOE noted as highly successful examples of privatization.

GAO found that: (1) the overall estimate of $1.1 billion in savings from privatizing six projects that DOE provided to Congress in its FY 1997 budget request was not totally accurate; (2) specifically, GAO found some understated costs, incorrect cost data, and cost comparisons of projects with different scopes that affected the accuracy of several of the estimates; (3) GAO did not find any evidence to suggest that the estimates were intentionally overstated or understated; (4) while DOE could not supply data to produce more accurate estimates for all of the projects, the available data for these projects indicate that the privatized approach has the potential to save several hundred million dollars compared with the current management and operation contracting approach; (5) however, only the two laundries were operational when DOE claimed these savings in its budget request; and (6) consequently, DOE's characterization of the six projects as highly successful appears to be premature.

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