been an extraordinarily challenging venture, marked by both progress and problems. Accordingly, I carry a record of performance with me to guide you in deciding on my fitness for this new position. While I think I am well qualified for the Under Secretary post by my past training and experience, you deserve my assessment of my current stewardship as you deliberate.

When I assumed the Assistant Secretary post, the Department's Environmental Management program was really still in its infancy. It had been in existence only three years, and had grown at a phenomenal pace. The budget grew from $900 mislion to nearly $6 billion in the space of four budgets. During the course of the program's growth, tangible results have often been difficult to quantify.

I saw then the need to prioritize our activities by risk, to get results, to get the costs of our work under control, to better protect our workers, and to do all of this while building a stronger technological and scientific base under the program, and dealing in a much more open way with our primary customers-the states, Indian Tribes, federal regulatory agencies, and the citizens in the 33 states and territory where the Department of Energy has its sites and facilities.

We've made substantial progress in each of these areas, although there is still much work to be done. We've begun the difficult, but necessary, process of ranking our activities at sites on the basis of their risk to workers, public health and the environment. Our FY 1996 budget benefitted by these rankings, and the budget to be submitted in two weeks will rely even greater upon risk assessment. On the ground, we are right in the middle of stabilizing all the plutonium and spent fuel at places like Rocky Flats in Colorado, Savannah River in South Carolina, and Hanford in Washington, and I'm glad to say that we are out of the study phase and into the real work at each of these sites. In the cleanup part of our work that most clearly resembles Superfund, we are devoting well over 50% of our activity to actual cleanup rather than studies. We have cut our rate of lost work days due to safety incidents nearly in half, while encouraging our workers to report incidents and potential safety problems more promptly. And just this week, the Defense Waste Processing Facility at Savannah River, the first and largest American vitrification facility for high level waste, has been declared ready to operate.

We have focused our technology development efforts in five very specific areas that will benefit the cleanup in the near-term, while beginning a strong fundamental research effort that holds great promise for dramatically driving down the costs of cleanup in the future. Finally, we have in place 11 citizen-run advisory boards that have contributed to lower cost clean-up decisions without the long, drawn-out opposition to heavy handed decisions that have historically plagued Federal cleanup programs.

It is in the cost of doing business and the relationships with our primary customers-state and federal regulators that we have made the most progress. We are dramatically changing the way we do contracting, moving in a three year period from traditional contracts in which the contractor is subjectively rewarded, and in which one contractor is expected to know how to do all the work, to a performance based contracting system in which we are introducing strong incentives for outstanding objectively-based performance as well as penalties for poor performance. By the end of 1996, Hanford, Rocky Flats, Savannah River, Idaho National Engineering Laboratory, and Fernald in Ohio, will all have such contracts in place. At Rocky Flats alone, this contract should save us well over $1 billion over a 5-year period from the original baseline. In addition to contracting, we undertook the difficult task of reducing or "right-sizing"-contractor employment at our sites, so that we could first cap, and then actually reduce the total budget for cleanup.

Today, our sites have nearly 17,000 or one-third fewer workers than when we took over, and this change has enabled us to both get more results on the ground as well as save nearly $2 billion dollars per year off the baselines we inherited from the last Administration. Our budget request for FY 1997 will be substantially less than our request for FY 1994, despite inheriting over $1 billion in new sites since May of 1993. Many have thought that such cost reduction would be impossible if we also were to meet the demands of compliance agreements established by our predecessors with federal and state regulators. I'm proud to be able to say that we have been able to work cooperatively with the states on a bipartisan basis. We have become more assertive in ensuring that we not “Cadillac” a job when a “Ford Escort" will do, and to their credit, practically every state and federal agency has worked with us to ensure that we can be in environmental compliance at a price, we as a Nation, can afford.

Even with this substantial progress, we still must confront major problems. Perhaps most fundamentally, our own management, as well as the National Academy of Sciences, has identified that the lack of very strong economic incentives to finish jobs is a significant obstacle. In a program that still employs tens of thousands of

people, there is tendency-unless pushed strongly-to string out work, because its end might mean smaller budgets. My main solution to this problem is to find ways to collaborate with states and citizens to establish plans that will help us finish our site activity sooner, write contracts that have very strong performance objectives to finish (which I believe we are doing), and then use the accumulated level of public accountability to push the jobs forward. We also need solutions to the ultimate problems of disposition of nuclear and hazardous materials, and this challenge must continue to be addressed.

As Under Secretary, I would be immediately responsible for overseeing a portfolio of activities that carry out critical and closely related work with respect to nuclear materials, their stabilization and their disposition. In addition to the Office of Environmental Management, these would include the Office of Materials Disposition, which tackles the challenge of making decisions about the management of potentially dangerous nuclear materials; the Office of Civilian Radioactive Waste Management, which carries out the work of investigating the suitability of a proposed geologic repository for both civilian and defense high level nuclear waste; as well as lead responsibility for the safety at all Departmental facilities, working together with the Office of Environment, Safety and Health.

All of these offices manage tasks and carry out responsibilities that are intimately tied to the work that goes on within the Environmental Management program. We need to build upon the Secretary's efforts to create a Department that is not simply an independent collection of agencies, but a web of activities that each relate to the overarching issues of scientific and technology, energy, environmental and national security. As some members of this Committee know, I have spent a great deal of time in the last three years grappling with the difficult problems of nuclear materials management and disposition. Whether in Idaho, North Carolina, South Carolina, Colorado, Washington, Nevada, or California, it is clear that the transport, safety, preparation and disposal of these materials is an extraordinarily complex and controversial issue. Over the next year, my priorities would be to make measurable progress in this materials problem, while recognizing its long-term nature.

I would want to continue the difficult, but absolutely necessary task of educating the public about the plutonium disposition choices we have, both in terms of technology and site selection. I would also want to press as hard as possible to further improve the scientific underpinning of our civilian radioactive waste program, while making the best use of increasingly scarce dollars. I want to ensure that the facilities and sites are the safest possible for our workforce. Finally, I want to bring the kind of business orientation have to the entire Department, and work hard to finish the job of changing how DOE does its contracting so that the new smaller DOE is clearly seen to be achieving important national purposes in a cost-effective way. All of the activities I would be responsible for are ones for which there are important public purposes. The issue is not whether we shall deal with the legacy of the Cold War, but at what pace and under what definition of "clean." The issue is not whether we shall have to, as a Nation, deal with our nuclear materials, but whether we can do so with the support of our scientists and citizens. These are daunting challenges that are independent of organization and placement. I believe that the choice of placing them under coordinated leadership is the right way, and I hope I have established a record, at least among the Members of this Committee and in the communities and states where we work, that warrants your confidence.

Thank you for your attention and I look forward to answering your questions.
The CHAIRMAN. Thank you very much, Mr. Grumbly.

What I am going to do is have all the nominees make their statements and then we will proceed with your questions.

Mr. Alm.

TESTIMONY OF ALVIN L. ALM, NOMINEE TO BE ASSISTANT SECRETARY FOR ENVIRONMENTAL MANAGEMENT, DEPARTMENT OF ENERGY

Mr. ALM. Mr. Chairman and members of the committee: My name is Al Alm. I appreciate this opportunity to appear before this committee as the nominee for Assistant Secretary of Energy for Environmental Management. I will give an abbreviated version of my statement and submit the total statement for the record.

The CHAIRMAN. It will be entered in the record as if read.

Mr. ALM. I just want to say at the outset that I agree with the comments about Tom Grumbly's work as the Assistant Secretary. The pieces are now in place for the program to move: incentive contracts, a risk prioritization system; advisory committees have been established; and the work is moving from study to actual remediation.

I wanted to hit five issues that I think are important in approaching this position: First, we must reduce the most serious risks as quickly as possible. Some of these risks pose threats to the environment, to communities, and to workers.

The risk-based prioritization system initiated last year should play a major role in budgeting and in actions taken in the field. In many cases, risk can be dramatically reduced by stabilizing waste and by removal actions while awaiting permanent solutions. Putting off action awaiting final solutions only exposes the public and workers to unnecessary risk in the interim.

Second, we must reduce the so-called mortgage costs as quickly as possible. These costs include the surveillance and maintenance costs necessary to keep facilities safe. In many cases, advancements made today could be paid off in a few years by dramatically reducing these costs.

Third, we must take regulatory obligations seriously. The Federal Government cannot play by a different set of rules than the private sector. If we establish the credibility that DOE takes these obligations seriously, then we should be in a position to negotiate changes when it makes sense to do so. As I indicated earlier, support of stakeholders, the States and Congress will be key as we move ahead, particularly in light of budgetary limitations.

Fourth, we must improve the cost effectiveness of the program. We must assure that we are not only doing the right thing, but also that we are doing it right. Through life cycle analysis, risk analysis, and other tools, we need to assure that the actions we are taking represent the most cost effective option.

Finally, we need to apply the best science to the environmental management program. There are substantial opportunities to characterize waste more efficiently and deploy new, more cost effective technologies. New technology will allow DOE to conduct the program at lower cost and, by allowing it to tackle some currently intractable problems, will result in greater health protection.

I believe that, with diligent efforts, we can look toward reducing most of the mortgages and reducing most of the risk within a decade. Such a goal could mobilize DOE's staff, contractors, and stakeholders toward a realistic interim end point that would demonstrate large benefits within a finite period of time.

I thank you very much for this opportunity to appear before the committee and I look forward to answering your questions. If confirmed, I would look forward to working very closely with this committee.

Thank you very much.

[The prepared statement of Mr. Alm follows:]

PREPARED STATEMENT OF ALVIN L. ALM, NOMINEE TO BE ASSISTANT SECRETARY FOR ENVIRONMENTAL MANAGEMENT, DEPARTMENT OF ENERGY

Mr. Chairman and members of the committee, my name is Al Alm. I appreciate the opportunity to appear before this committee as the nominee for Assistant Sec

retary of Energy for Environmental Management. I am honored to have been nominated by President Clinton to serve in this critical position. If confirmed, I look forward to serving at the Department of Energy (DOE) under Secretary O'Leary's leadership.

Few positions in the Federal establishment offer greater challenges. The Department of Energy's Environmental Management program was established to manage and clean up wastes generated from 45 years of production of nuclear weapons. This program is the largest single environmental activity in the world, with an unsurpassed technical and management challenge.

The Congress and the American people have the right to expect that taxpayer dollars are prudently invested, that results are achieved and the public and workers are protected. This task of managing and cleaning up the weapons complex sites must be achieved during a period when discretionary budget resources will be increasingly scarce. To succeed, it is critical to retain the support and help of the Congress, the States and the stakeholders at DOE facilities. It is clearly a tall order. I believe success is possible. From its beginning in the late 1980s, the Environmental Management program has evolved into a major undertaking. The first Assistant Secretary, Leo Duffy, shaped the program during its early years. Tom Grumbly, who has been nominated by President Clinton to be Under Secretary of the Department, has accomplished a great deal over the last three years in this position. Incentive contracts are in place at most of the facilities, costs have been reduced, advisory committees have been established at the sites and comparative risk assessment is being used to establish priorities. These accomplishments are not only attributable to leadership at the top, but also through dedicated work by DOE employees and contractors. I have been impressed with the dedication and competence of many of the DOE employees and contractor staff that I have met recently, as well as over the years. Success in the position for which I have been nominated would be impossible without their efforts.

I subscribe to the direction and goals that Tom Grumbly has established for the program. The task is now to translate this momentum into lasting achievements at the sites, based on the following priorities.

First, we must reduce the most serious risks as quickly as possible. Some of these risks pose threats to the environment, to communities and to workers. The riskbased prioritization system initiated last year should play a major role in budgeting and in actions taken in the field. In many cases, risk can be dramatically reduced by stabilizing wastes and by removal actions, while awaiting permanent solutions. Putting off actions awaiting "final" solutions only exposes the public and workers to unnecessary risk in the interim.

Second, we must reduce the so-called mortgage costs as quickly as possible. These mortgage costs include the surveillance and maintenance costs necessary to keep facilities safe. In many cases, investments made today could be paid off in a few years by dramatically reducing these costs. These costs savings would occur upon decontaminating, and in some cases, decommissioning these facilities. A private business would never hesitate to make such investments. Savings from mortgage reduction would allow for funding more risk reduction projects in the future.

Third, we must take our regulatory obligations seriously. The Federal Government cannot play by a different set of rules than the private sector. If we establish the credibility that DOE takes these obligations seriously, then we should be in a position to negotiate changes when it makes sense to do so. As I implied earlier, support of stakeholders, the States and Congress will be key as we move ahead, particularly in light of tight budgetary limitations.

Fourth, we must improve the cost-effectiveness of the program. We must assure that we are not only doing the right thing, but also that we are doing it right. Through life-cycle analysis, risk analysis and other tools, we need to assure that the actions we are taking represent the most cost-effective option. Even when we have chosen a course of action, we need to make sure we are achieving the objective the most efficient way through sound project management and cost controls.

Today, many new tools are being used to create a more cost-effective clean-up program. Some of these include incentive contracts, re-engineering, benchmarking, privatization, activity-based costing, overhead analysis and life-cycle analysis. I would intend to rely strongly on these tools to assure we are doing the right things efficiently.

Fifth, we need to apply the best science to the Environmental Management program. There are substantial opportunities to characterize wastes more efficiently and deploy new, more cost-effective technologies. New technology will allow DOE to conduct the program at lower costs and, by allowing it to tackle some currently intractable problems, will result in greater health protection.

I firmly believe that streamlining processes and shortening the deadlines for final actions will be less costly and more protective to the public and workers than searching for a "perfect" solution. Moving ahead with clean-up actions, even if they are interim in nature, will reduce risk and future costs. To the extent that mortgage costs are reduced, more funds would be available for future cleanup. This is greatly preferable to spending money continuously on surveillance and maintenance at existing facilities. In my brief review of the program to date, it appears that a phase 1 effort aimed at reducing most of the risk and mortgage costs-could be achieved within a decade. Such a goal could mobilize DOE staff, contractors and stakeholders toward a realistic interim end point that would demonstrate large benefits within a finite period time.

Before discussing my qualifications for this position, I would like to make one final observation. The current debate about the budget deficit reflects a concern by the President and the Congress that the current generation is placing unfair obligations on future generations. Government expenditures that result only in current consumption raise that issue. Many of the investments made in the Environmental Management program, however, have the opposite effect; they reduce future obligations by a much greater amount than the current investment. I would hope that we can demonstrate that these investments will burden our children and grandchildren with smaller health and ecological risks and of less costly future obligations to maintain deteriorating facilities.

I believe that my previous experience in both government and the private sector have provided me a solid basis for taking on the challenges of the Environmental Management program. My many years in the environmental area have acquainted me with the complete range of environmental issues, from public health concerns to ecological values. As Deputy Administrator of the Environmental Protection Agency during the tenure of William Ruckelshaus, I acted as chief operating officer for a program of comparable size to that of DOE's Environmental Management program. In that position, I learned how to establish goals for an organization, how to make decisions rapidly and how to assure program results. My private sector employment has provided me further management experience, including understanding the importance of being efficient. My service on EPA's Science Advisory Board and National Academy of Sciences panels have given me an understanding of the scientific community. On nuclear issues, I am currently co-chairman of the Environmental Management Advisory Board and have previously served at both the Atomic Energy Commission and the Department of Energy.

If I am confirmed by the Congress, I pledge to devote all my energies to cleanup of the weapons complex and to work closely with members of this committee. I realize the magnitude of this task and am humbled that the President and the Secretary have expressed their confidence in me to undertake this endeavor.

Thank you very much for the opportunity to make this statement and I look forward to answering your questions. I also look forward to working with you in the future if you see fit to confirm me. Thank you very much.

The CHAIRMAN. Thank you, Mr. Alm.

Mr. Coburn.

TESTIMONY OF CHRISTOPHER M. COBURN, NOMINEE TO BE A MEMBER OF THE BOARD OF DIRECTORS, U.S. ENRICHMENT CORPORATION

Mr. COBURN. Mr. Chairman and members of the committee: I am honored and pleased to be here today as a nominee to the Board of Directors of the U.S. Enrichment Corporation. I believe my background in science, technology, R and D, and public policy will be a valuable asset to the board as it continues to oversee strategy, direction, and resources for USEC.

With the Energy Policy Act of 1992, the Congress established a strong foundation, framework, and agenda for revitalizing the Government uranium enrichment program and then for transferring the enterprise from the public to the private sector. The board and the management of USEC have worked vigorously to translate the Congressional mandates into actions that in a very short time have produced impressive results.