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The U.S. Department of Energy has its share of challenges as it conducts some of the world’s most high-tech research, maintains a stockpile of nuclear weapons and cleans up after decades of bomb-making.

A report released this week outlines some of those struggles while providing a look at the expansive scope of the department’s responsibilities and costly liabilities.

According to work over the past year, the agency’s inspector general says a growing problem is oversight and management of more than 11,300 contracts to keep operations humming at 17 national laboratories, dozens of contaminated sites and other facilities.


The Energy Department is the largest civilian contracting agency within the federal government. About 90 percent of the $30 billion it gets each year goes toward contracts.

The inspector general’s findings this year on the oversight of those contracts is nothing new because federal accountants have called contract management within the agency “high risk” since 1990. The difference is officials are starting to look closer at subcontractors.

The report identifies millions of dollars in losses related to quality assurance at sites in Washington state, New Mexico and South Carolina.

At the Hanford Nuclear Reservation near Richland, Washington, contractors have paid millions to settle allegations that they provided inadequate materials, claimed unnecessary overtime, mischarged costs and exposed the agency to undue financial risk, the report said.

At the nation’s only underground nuclear waste repository in southern New Mexico, concerns about quality assurance were raised again in September, the report noted. The facility is ramping up work again following a nearly three-year shutdown caused by a radiation release.

The closure put a serious wrinkle in the nation’s efforts to clean up Cold War-era waste.

Given the complexity of the work done by the Energy Department and its role in national security, watchdog groups say federal agencies should manage the labs, not contractors, to solve many of the problems.

Energy Department officials did not respond to a request for comment on the report.


There are sites across the U.S. where the environmental legacy of the Cold War and development of the atomic bomb linger. Covering an area equal to the combined size of Rhode Island and Delaware, the cleanup operation is the largest in the world.

According to the report, the department has spent over $164 billion to treat and dispose of nuclear and hazardous waste and has completed cleanup at 91 of 107 sites since 1989. In the last six years alone, the department has spent $35 billion on the work.

Officials say the contamination makes for complex problems that often require first-of-their-kind solutions.

Overall, environmental liability has roughly doubled from a low 20 years ago to $372 billion for the 2016 fiscal year. Half of that liability is at Hanford and the Savannah River Site in South Carolina.

The inspector general earlier this year found significant issues with management of the cleanup effort at the nation’s only commercial nuclear fuel reprocessing plant in New York. Operations there generated more than 600,000 gallons of high-level liquid waste.

The cleanup has been ongoing since 2011. Without an effective strategy, officials warned that costs and delays would keep escalating.


The Energy Department has about 88 million gallons of liquid waste stored in underground tanks and an additional 4,000 cubic meters of solid waste stored in bins. Cost estimates for treating and disposing of the waste exceeds $50 billion.

Officials aim to ship some of it to the repository in New Mexico. There is also a facility being built at Hanford that will be the world’s largest radioactive waste treatment plant — focused on processing and stabilizing 56 million gallons of radioactive and chemical waste.

The report states the department has faced significant challenges in building and operating that plant. In December 2016, the cost estimate ballooned by $4.5 billion.