Eliminating the exemption enjoyed by the nonprofit contractors would strengthen this tool. The enforcement program appears to be a useful and important tool for ensuring safe nuclear practices. H.R. Therefore, depending on the interpretation of the term “discretionary fee” as discussed above, limiting payment to the amount of the incentive fee could exempt these two contractors from paying any penalty for violating nuclear safety requirements. In contrast, these same contractors could have only a portion of their fee (the “discretionary fee”) at risk for violations of nuclear safety requirements. If a nonprofit contractor’s entire fee was subject to the civil penalty, the Secretary has discretion that should ensure that no nonprofit contractor’s assets are at risk because of having to pay the civil penalty. Under the existing law, in addition to the seven contractors exempted by name in the statute, the Secretary was given the authority to exempt nonprofit educational institutions. H.R. 723, however, Brookhaven Science Associates would be able to limit its payments for civil penalties.
Why GAO Did This Study

This testimony discusses GAO's views on H.R. 723, a bill that would modify the Atomic Energy Act of 1954 by changing how the Department of Energy (DOE) treats nonprofit contractors who violate DOE's nuclear safety requirements. Currently, nonprofit contractors are exempted from paying civil penalties that DOE assesses under the act. H.R. 723 would remove that exemption. GAO supports eliminating the exemption because the primary reason for instituting it no longer exists. The exemption was enacted in 1988 at the same time the civil monetary penalty was established. The purpose of the exemption was to ensure that the nonprofit contractors operating DOE laboratories who were being reimbursed only for their costs, would not have their assets at risk for violating nuclear safety requirements. However, virtually all of DOE's nonprofit contractors have an opportunity to earn a fee in addition to payments for allowable costs. This fee could be used to pay the civil monetary penalties.

What GAO Found

GAO found that DOE's nuclear safety enforcement program appears to be a useful and important tool for ensuring safe nuclear practices.