DOE’s outside litigation costs exceeded $25 million in fiscal year 1995. At that time, DOE’s General Counsel acknowledged that the Department’s management of outside litigation costs had been inadequate and said that DOE was initiating actions to strengthen its controls over these costs. DOE Has Improved Cost Controls

Since we first reviewed DOE’s litigation costs, the Department has made considerable efforts to improve its procedures for controlling these costs, saving hundreds of thousands of dollars. Furthermore, headquarters’ oversight has not been as effective as it could be. DOE’s Cost Control Guidance Not Consistently Applied or Not Followed

We reviewed the bills associated with the Cook v. Rockwell/Dow and In re Hanford cases for fiscal year 1995, and found problems in many of them. Other issues have a far greater impact on the costs associated with the class action suits. These include the number of law firms representing DOE contractors, responding to discovery requests, and database development. Today, only two law firms are handling the litigation. Database Development

The final area that is driving costs is the development and maintenance of litigation databases.
Why GAO Did This Study

GAO discussed the Department of Energy's (DOE) controls over the litigation costs of defending lawsuits against its management and operating contractors.

What GAO Found

GAO noted that: (1) DOE outside litigation costs were over $25 million in fiscal year 1995; (2) DOE has improved its control over outside litigation costs by issuing guidance for reimbursable costs and specifying unreimbursable costs, which has saved hundreds of thousands of dollars; (3) DOE cost control guidance is not consistently applied or followed nor is headquarters oversight of field office billing procedures as effective as it could be; (4) other issues that have a greater impact on overall DOE litigation costs include the number of law firms representing DOE contractors, the handling of discovery requests, and database development; and (5) DOE is taking action to address these issues, such as consolidating law firms and contractors in one lawsuit, requiring future codefendants to hire common counsel, issuing guidance on responding to discovery requests, and developing plans to combine litigation case databases.