GAO: DOE Nuclear Cleanup "End-State Contract Model" Exceeds Budget by $500 Million in Six Years and Misses Goals

A report released by the U.S. Government Accountability Office (GAO) on July 29 shows that the Office of Environmental Management (EM) at the U.S. Department of Energy has accumulated over $500 million in cost growth on nuclear waste cleanup contracts since 2020, yet the agency cannot fully explain the reasons for these increases. EM is responsible for cleaning up 15 sites in the United States contaminated by nuclear weapons production and energy research. To address long-standing contract management problems, EM adopted the "End-State Contract Model" (ESCM) starting in fiscal year 2020, breaking cleanup work into smaller task orders under larger master contracts, with the goal of improving cost predictability, accelerating cleanup progress, and enhancing performance outcomes.

GAO's review indicates that this model has not consistently delivered the expected results. As of March 31, 2025, EM had awarded 57 task orders under ESCM, of which approximately half—29—explicitly defined an "end state." GAO focused its review on 9 completed task orders and found that 3 had no clearly defined end state, while the other 6 had established goals but achieved inconsistent results. Multiple sites experienced changes after contract award, directly driving up costs. For example, one task order at the Oak Ridge Reservation saw a cost increase of $216.661 million, a 45.17% rise; a second environmental operations task order at the Nevada National Security Site saw an even higher cost increase of 149.61%.

The report also noted that EM headquarters provided insufficient oversight during contract execution, failing to adequately ensure that sites defined and achieved end states, and failing to effectively use contract incentives to control costs. Some contract structures placed more financial risk on the government rather than appropriately transferring risk to contractors. This means that while ESCM formally attempts to improve management efficiency through task segmentation and goal orientation, its actual implementation remains hampered by inaccurate cost estimates, weak contract change management, insufficient data recording, and inadequate accountability.

This issue is not new. GAO had already designated DOE contract management as a high-risk area as early as 1990. Previous reviews also found that EM faced challenges in implementing end-state task orders, and stakeholders were concerned that insufficient competition among contractors could affect pricing fairness. This review was conducted at the request of a congressional committee report provision. GAO examined all ESCM task orders awarded as of March 31, 2025, evaluated contract documents for 19 selected task orders, and visited cleanup sites including Hanford in Washington State and Savannah River in South Carolina.

GAO made six recommendations to the Assistant Secretary for Environmental Management, including reporting contract modification data at the individual subtask level, strengthening headquarters oversight, requiring sites to follow a ten-year strategic task order plan, identifying and addressing root causes of cost growth, improving the accuracy of government independent cost estimates in negotiations, and ensuring that unpriced contract actions are priced within regulatory deadlines. DOE agreed with five recommendations and partially agreed with one, but as of the report's release, all six recommendations remained open. ESCM was intended to correct long-standing deficiencies in DOE's nuclear cleanup contracts, yet six years of implementation results show that without substantive adjustments to oversight, cost tracking, and contract incentive structures, similar cost overruns are likely to continue.