In December 2000, the Department of Energy (DOE) awarded Bechtel National, Inc. (Bechtel) a contract to design and construct the Waste Treatment Plant (WTP), one of the largest nuclear waste cleanup projects in the nation. Originally expected to cost $4.3 billion and be completed in 2011, DOE now estimates that WTP will cost over $12.2 billion and be completed in late 2019. Weaknesses in DOE's management and oversight of contractors led GAO to designate DOE contract management as a high-risk area since 1990. GAO was asked to determine whether (1) DOE's internal controls are designed to provide reasonable assurance against improper WTP payments and (2) DOE's controls reasonably ensure proper accountability for WTP assets. GAO reviewed fiscal year 2005 and 2006 internal controls by analyzing data and documents, interviewing DOE and contractor staff, and physically observing property items.

The Dept. of Energy (DoE) manages over 100 construction projects with estimated costs over $90 billion and 97 nuclear waste cleanup projects with estimated costs over $230 billion. DoE has about 14,000 employees to oversee the work of more than 93,000 contractor employees. This testimony discusses: (1) recent work on contract and project mgmt. within two of DoE's largest program offices -- the Nat. Nuclear Security Admin. (NNSA) and the Office of Environmental Mgmt. (EM); (2) preliminary results of ongoing work on project mgmt. at NNSA's Mixed Oxide Fuel Fabrication Facility project at the Savannah River Site in South Carolina; and (3) actions needed by NNSA and EM to improve contract and project mgmt. Illustrations.