FY 1996 cost savings report

Cost savings are an integral part of Hanford site operations. Congressional actions towards establishing a balanced budget have resulted in reductions to funding for all federal agencies, including the Department of Energy (DOE) Environmental Management (EM) cleanup mission. In September 1994 the DOE Richland Operations Office (RL) approved the FY 1995 multi-year baseline that included a cost estimate of $1.9 billion for FY 1996. However, Congress only appropriated $1.3 billion for that year. The shortfall of $600 million resulted in a significant challenge to accomplish the required workscope. Therefore, RL initiated an aggressive cost savings program to eliminate the shortfall by deleting workscope that was unnecessary and performing the remaining workscope more efficiently. RL initiated baseline planning actions (including deletions, deferrals, transfers, and additions) during the FY 1996 multi-year baseline development process to match workscope and anticipated funding and identified $205 million of workscope deletions. CFR (Contract Finance and Review Division) then reviewed over 200 cost baseline change requests during FY 1996 and documented an additional $95 million of FY 1996 cost savings. This included $73 million of workscope deletions and $22 million of efficiencies. Total savings as a result of FY 1996 initiatives, including baseline planning actions and current year initiatives, were $300 million