In addition to the act’s specific requirements, Energy’s guidelines provided that extended medical insurance should be offered to all separated contractor employees. Similar Types of Benefits Offered, but Amounts Varied Among Locations

The workforce restructuring plans generally included similar types of separation payments and other benefits. Some enhanced retirement programs included an additional incentive payment. As shown in table 1, the total average cost of benefits provided to the 23,782 separated employees was $25,619. Benefits Exceeded Amounts That Would Have Been Awarded Under Existing Contracts

Section 3161 of the National Defense Authorization Act for Fiscal Year 1993 authorized benefits such as educational and relocation assistance that exceeded those that would have been provided under existing contracts at the facilities. In contrast, federal employees who are involuntarily terminated through a reduction in force receive only severance pay based on years of service and an additional 10 percent of basic severance for each year an employee is over age 40; the maximum lifetime benefit is 1 year’s annual salary. Similar Benefits Were Generally Provided to Cold War and Post-Cold War Workers at Defense and Nondefense Facilities

Although the act referred only to workforce restructuring at defense nuclear facilities, the Secretary of Energy determined that in the interests of fairness, the planning process included in the act would apply to all workforce restructuring. In practice, most plans made little or no distinction in the benefits offered to those employees who worked during and after the Cold War. Efforts to Retain Critical Skills Have Improved

The limited data available for the early years of restructuring showed problems in retaining workers with critically needed skills. Since these early efforts, Energy has taken steps to improve its ability to retain critically needed skills. According to preliminary data reported for all facilities for fiscal years 1995 and 1996, about 2 percent of separated employees have had to be rehired or have their positions backfilled by someone with similar skills. Energy Provides Limited Oversight of Plan Implementation

After Energy approves the workforce restructuring plans, it provides little oversight or monitoring of how contractors implement those plans. While similar types of benefits were offered at most facilities, the formulas used to calculate severance pay combined with the differences in length of service and base salaries among the facilities resulted in a wide range for the value of these benefits. Scope and Methodology

To determine the types and amounts of benefits provided to separated employees as well as to determine what distinctions Energy made in determining who should receive these benefits, we relied primarily on data provided by the agency’s Office of Worker and Community Transition. The data for fiscal years 1993 and 1994 were obtained from the first report on workforce restructuring efforts. To determine the extent to which the contractors at Energy’s facilities had to rehire or replace workers, and to determine the steps that the agency has taken to oversee the implementation of the plans, we interviewed the officials responsible for restructuring at the four facilities we visited and officials in the Office of Worker and Community Transition. Four plans provided relocation assistance only to employees hired before 9/27/91.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) workforce restructuring plans, focusing on the: (1) types and amounts of benefits provided to separated employees; (2) distinctions DOE made in determining who should receive these benefits; (3) extent to which the contractors at DOE's facilities have to rehire workers or replace them with others having similar skills, because the downsizing was not targeted sufficiently to retain critically needed skills; and (4) steps DOE has taken to oversee the implementation of the plans.

What GAO Found

GAO found that: (1) the 23,800 contractor employees separated since 1993 under DOE's workforce restructuring plans have received an average of $25,600 in benefits; (2) about 88 percent of the costs were for enhanced retirement incentives or severance pay; (3) although similar benefits were offered at most facilities, the value of these benefits varied considerably among locations, reflecting the considerable discretion given to each facility in determining how best to reduce its workforce; (4) more than half of the workforce restructuring plans provided more generous severance pay than would have normally been provided by the contractors under existing contracts, and almost all plans provided other benefits not normally provided by the contractors, such as extended medical insurance; (5) the benefits provided under the plans exceeded those that would have been provided to federal employees in a reduction in force; (6) DOE's guidelines provide that the consideration of specific benefits for contractor employees should take into account both available funding and whether the employee was hired prior to the end of the Cold War, but most plans made no distinction in the benefits provided to employees hired during the Cold War and those hired after the Cold War ended; (7) the preliminary data for fiscal years (FY) 1995 and 1996 suggest that DOE's facilities have improved their ability to retain critically needed skills during downsizing; (8) early restructuring at some facilities resulted in subsequent hiring to fill vacated critical skill positions; (9) while data are not available on the number of critical skill positions that were refilled during FY 1993 and 1994, DOE's preliminary data for FY 1995 and 1996 indicate that about 2 percent of the positions vacated had to be refilled; (10) DOE provides limited oversight over how contractors implement workforce restructuring plans; (11) according to DOE officials, once the workforce restructuring plans are approved, the responsibility for implementation is left with the contractors and little monitoring is done by DOE program personnel; and (12) reviews by DOE's Office of Inspector General and others of DOE's early restructuring efforts have identified problems with the awarding of benefits.