Speech to the ECA Spring Meeting

March 7, 2003

“THE 2004 BUDGET AS AN INSTRUMENT FOR CHANGE”

Chairman Jerry Kuhaida ( Ka- Hide- Ah)- (Council member Oak Ridge) Chairman -elect Bob Thompson (Mayor of Richland) Good morning. I ‘m very pleased to be with you this morning.

When your Executive Director, Seth Kirshenberg, invited me to speak to you, he indicated that you were most interested in hearing about the current status of the EM program with a focus on the Fiscal Year ‘04 budget. I am happy to try to do that today.

I think the FY ‘04 budget provides an excellent framework to talk. Not only numbers, but more importantly, the changes being made in the EM Program and the progress achieved to date. To update you on actions we have taken leading up to the FY 04 budget request and where that budget will take the program. I am committed to change this program for the better and I believe that this budget is an instrument of change for the better. But to understand fully what it changes, how it changes things, and why,--- we have to back up a bit.

It was apparent to me early on that the EM program was not operating at an acceptable performance level. For a long time the program had experienced difficulty --both in fully understanding its mission and in executing its mission. Many of you in this room came to me with that very message. You told me in so many words that the EM Program was not well. That improvements needed to be made. And I appreciate that level of care and candor.

The first thing we needed was a thorough diagnosis of the problem. That was begun when Secretary Abraham, in August of 2001, directed a “Top-to-Bottom review” of the program. This review resulted in a number of findings and recommendations that I’m sure most of you are familiar with. One important, overarching finding of the review, issued in February of 2002, was that during the 1990s “a major emphasis was placed on managing risk rather than actually reducing risk to the workers, the public, and the environment”. Process rather than results had become the basis for contract performance and cleanup approaches. In other words, we were focused on the journey and forgetting that the whole purpose of the trip was to arrive at a pre-determined destination safely and on schedule.

Although a diagnosis was necessary for a cure, it was not sufficient. Along with the diagnosis we needed a prescription or plan of action---- and the willingness to implement it.

To that end, the EM Program committed to devote the next eighteen months to developing and implementing several key management reforms that would drive accelerated risk reduction and project completion. We are ahead of schedule. In one year, we have begun developing and implementing four management reforms, which serve as the basis for the EM Program’s accelerated risk reduction cleanup initiatives. These reforms are:

Acquisition Strategy— We are implementing a strategy that will both increase competition by enlarging the pool of potential contractors competing for our work and increasing the accountability of our contractors to deliver real, meaningful cleanup. The goal is not a once through but establishment of an organization and management framework that provides routine and objective checks and identifies corrective action when performance warrants.

Configuration Control— EM has begun implementing a strict configuration management system that baselines a number of key, critical program elements, such as Performance Management Plans, EM corporate performance measures, and life-cycle costs. Strict configuration control and monitoring of these key elements will facilitate a high confidence level that the goals and direction of the accelerated cleanup initiatives are being met and will continue to be met.

Human Capital— This reform strongly supports the President’s Management Agenda. EM is building a more robust organizational and performance accountability system that holds each manager and employee accountable for actions and results. Individual performance management is being fully integrated into EM organizational goals.

New Budget Structure— We have developed and begun implementing a new budget structure, which complements other management reform initiatives by focusing on visibility and accountability for completing the actual work of this program. The new budget structure clearly identifies scope and resources that are necessary for fulfillment of the accelerated cleanup and risk reduction mission.

While implementing these management reforms was important we were not idle in other important areas.

First, in the FY 03 budget, we asked for a Cleanup Reform Account and requested funds for accelerating “high payoff initiatives”.

Next, we signed Letters of Intent with our regulators. These Letters of Intent are significant because they lay the foundation to move forward with implementing EM’s accelerated risk reduction and clean up strategies. They signify alignment that is critical—and showing that alignment by signing up in black and white reinforces public commitment.

Third, with funding in place and our goals clearly articulated, we next needed a strategy to attain those goals. A roadmap if you will. This need was met with the development of Performance Management Plans that must be put in place at each major site. The PMPs identify and articulate the strategies, key milestones, and commitments that facilitate accelerated risk reduction and clean up.

Finally, we needed to align our regulatory framework. Instrumental in executing the Performance Management Plans are the requisite regulatory frameworks. This is not a question of our commitment to achieve positive environmental benefits through the framework of our regulatory agreements. But rather a question of how to fulfill that commitment more expeditiously and effectively. In order to align the regulatory framework with acceleration and the resulting priorities, adjustments are occurring that involve milestone changes in agreements, permit modifications, or Record of Decision amendments to name a few. We are actively pursuing these changes that will underpin the strategy of the performance management plans.

You may be asking yourself “How does all this interesting and encouraging information relate to the FY ‘04 budget as an instrument for change?” Here’s how: The first and most important reason is that the FY ‘04 budget request is the first budget that fully reflects the initiatives undertaken by this Administration to transform and revitalize the cleanup of the former nuclear weapons complex. All the innovation and effort of the past year was instrumental in crafting our FY ‘04 budget request.

Second, this budget uses a new budget structure developed as one of the management reforms that came from the Top-to-Bottom review. This new structure supports integration of performance and budget which is crucial to our focus on completion and real risk reduction.

Finally, another finding of the Top-to -Bottom review is that EM needs to focus on its core mission. This budget helps move us in that direction while at the same time demonstrating our commitment to the need for Long Term Stewardship. It proposes that office be realigned in a new Office of Legacy Management. This will help assure greater authority, accountability, and visibility. The Office of Legacy Management will allow us to better keep our commitments to communities, the environment, and our workers.

In FY 2004, the EM program will continue making progress in implementing management reforms and making changes in the areas emphasized in the Top-To-Bottom Review. The EM FY 2004 budget request has been tailored around meeting our mission of accelerated risk reduction and completion. The most impressive aspect of this budget is that it fully reflects each site’s new accelerated risk reduction and cleanup strategies. The investment we have requested in our FY 2004 budget will allow EM to keep its new accelerated risk reduction and cleanup strategies on track. The strategic groundwork has been laid and the EM program is moving forward with its risk reduction and cleanup strategies. Through the implementation of accelerated cleanup strategies, the EM program anticipates that cleanup will be completed at least 35 years earlier (2035) than originally anticipated (2070) and life-cycle savings of greater than $50 billion will be achieved.

FY 2004 will be a banner year, where significant risk reduction will be achieved. During FY 2004, EM program will:

_ Eliminate 1.3 million gallons of radioactive waste from underground tanks, and permanently close 9 underground radioactive waste tanks (two at Savannah River, one at INEEL, and 6 at Richland)

_ Complete stabilization of all remaining plutonium metals, oxides, and residues in EM inventory (at Richland and Savannah River)

_ Package 633 metric tons of spent nuclear fuel for safe storage and disposal (cumulative 88% of EM’s inventory packaged)

_ Accelerate transuranic waste shipments to the Waste Isolation Pilot Plant. EM will ship more than 12,000 m³ of transuranic waste to the Waste Isolation Pilot Plant.

_ Complete remediation of 180 formerly contaminated sites (surpassing 50% of these sites in the EM inventory)

The FY 2004 budget will allow the EM program to remain focused on the core mission of accelerated risk reduction and project completion.

The Office of Environmental Management is a national program. Under this administration it is a new program. Re-thought; Re-designed; and I hope Rejuvenated. But its success still depends, in no small measure, on the cooperation and support, and of the states and local communities who neighbor our sites. And the support of the officials and citizens of the community who are, after all, the people most affected by the risks present. From the very beginning of my service in EM I have known how important the support of local communities can be. I have felt from the very start of my tenure that I have had your support and I appreciate it. And I intend to do everything I can to keep it and justify it. Although we may not always agree on a specific matter here and there, it’s been a pleasure to be here with you this morning and I look forward to working with you as we move forward together.