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Inspection Report: INS-O-10-02

July 29, 2010

Severance Repayments at the Savannah River Site

The Department of Energy’s (Department) mission has evolved in recent years, which necessitated changes in the contractor workforce requirements. In 1993, Congress approved Section 3161 of the National Defense Authorization Act (Act), which mandates that if a change in the workforce is necessary, the Department must develop a plan for workforce restructuring that will minimize the impact on the affected employees and the surrounding communities. Since the passage of the Act, the Department has managed numerous contractor workforce restructurings that resulted in a reduction in the Department’s contractor workforce. For example, workforce restructuring efforts in Fiscal Years 2005, 2007 and 2009 at the Savannah River Site (Site) reduced the contractor workforce by 1,184 employees. The Office of Inspector General (OIG) received a hotline allegation that employees of the Washington Savannah River Company (WSRC), a former management and operating contractor, had inappropriately received severance payments under the 2007 Savannah River workforce restructuring. It was alleged that these employees were subsequently rehired to perform in the same or similar functional job areas but were not required to repay severance money. The contractual agreement between the Department and WSRC prohibited employees from receiving severance pay if they were offered employment at the Site, performing the same or substantially the same type of work with comparable pay and benefits, by any WSRC contractor or subcontractor. At the same time, the OIG’s Office of Investigations was in the process of reviewing a similar allegation received from Savannah River Operations Office (SRO) officials. The OIG’s Office of Inspections initiated an inspection to consolidate the information and review the facts and circumstances regarding both allegations. Our efforts focused on the Fiscal Year 2007 workforce restructuring which cost $9.7 million and resulted in the reduction of 312 contractor employees.

Topic: Management & Administration