Why It Matters

The Department of Energy's Office of Environmental Management (EM) has racked up over $500 million in cost growth on nuclear waste cleanup contracts since 2020, and a July 29 GAO report finds the agency cannot fully account for it. The EM program is responsible for cleaning up 15 U.S. sites contaminated from decades of nuclear weapons production and energy research. Since fiscal year 2020, EM has used an "End State Contract Model" (ESCM) that breaks cleanup work into smaller contracts called task orders within larger master contracts. The model was designed to deliver more reliable costs, faster cleanup, and better results. GAO found it has not consistently done any of those things.

Of 57 total task orders awarded under the ESCM as of March 31, 2025, about half (29) included defined end states. GAO reviewed nine completed task orders in depth: three had no defined end states, and the remaining six defined end states but were inconsistent in achieving them. Post-award changes drove cost growth across multiple sites. At Oak Ridge Reservation alone, one task order grew by $216,661,000, a 45.17% increase. At Nevada National Security Site, TO 2 Environmental Operations grew 149.61%. EM headquarters lacked adequate oversight throughout, and the agency did not fully use contract incentives that could have contained costs.

Broader Context

GAO's review was mandated by a congressional committee report provision directing the agency to evaluate EM's ESCM implementation. The specific committee is not identified on the GAO product page. The review examined all ESCM task orders awarded as of March 31, 2025, evaluated contract documents for 19 selected task orders, interviewed EM officials, and conducted site visits to the Hanford (Washington) and Savannah River (South Carolina) cleanup sites.

This is not a new problem. GAO has designated DOE contract management a high-risk area since 1990. A prior GAO review found EM experienced challenges implementing end-state task orders and that stakeholders raised concerns about fair pricing due to lack of competition among contractors.

GAO made six recommendations, all directed to the Assistant Secretary for Environmental Management. They cover: reporting contract modification data at the individual subtask level for sites using Approach B; strengthening EM headquarters oversight to ensure sites define and achieve end states; directing sites to follow 10-Year Strategic Task Order Plan requirements; identifying and addressing root causes of cost growth; improving accuracy of Independent Government Cost Estimates during negotiations; and ensuring Undefinitized Contract Actions are definitized by the regulatory deadline. DOE concurred with five recommendations and partially concurred with one. All six remain open.

The Bottom Line

The ESCM was meant to fix longstanding problems with DOE nuclear cleanup contracting. Six years in, cost growth exceeds $500 million, documentation is inconsistent, oversight at EM headquarters has been inadequate, and the agency has favored contract structures that shift financial risk onto the government rather than contractors. Until DOE acts on GAO's recommendations (particularly on oversight, cost tracking, and contract incentive structures), the conditions that produced these overruns remain in place.

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