DOE-EM privatization and the 2006 Plan: Principles for procurement policies and risk management

The Department of Energy`s Office of Environmental Remediation and Waste Management (EM) has recently set in place programs to restructure the strategic planning mechanism that will drive its clean-up schedule, The 2006 Plan, and to create a new set of business relationships with private contractors that will reduce costs--privatization. Taken together, the 2006 Plan and privatization will challenge EM to create new business practices to recast its risk management policies to support these initiatives while ensuring that its responsibilities toward the environment, human health, and worker safety (ES and H) are maintained. This paper argues that the 2006 Plan has transformed EM`s traditional, bottoms-up approach based on technical dictates to a top-down approach based on management goals--a transformation from an engineering problem to an economic problem. The 2006 Plan evolved from EM`s Ten-Year Plan, and seeks to convert the largely open-ended planning approach previously undertaken by EM to a plan bounded by time and dollars. The plan emphasizes making tradeoffs and choosing activities that deliver the most clean-up for the dollar. It also recognizes that each major player--stakeholders, DOE, OMB and Congress--has distinct interests that must be resolved if the process is to succeed. This, in turn, has created the need for a corresponding transformation in risk management practices from compliance-driven to benefit/cost-driven