EM contracts go under magnifying glass in search of DOGE savings

Department of Energy’s nuclear cleanup field bosses and top brass faced a Friday March 21 deadline to review existing contracts and recommend which ones should be retained, tweaked or terminated, according to an Office of Environmental Management memo.

This “review of covered contracts and grants” is implemented under President Donald Trump’s Executive Order 14222, according to the March 7 memo from the acting head  of Environmental Management, Dae Chung. This same executive order created the White House’s Department of Department of Government Efficiency (DOGE) Initiative.

The objective of the contract review is to “reduce overall federal spending or reallocate spending to promote efficiency” while advancing administration policies, according to the memo, viewed by Exchange Monitor.

A spreadsheet attached to the memo listed about 40 contracts from across the weapons complex and at the Cincinnati-based based Environmental Management Consolidated Business Center that would apparently be reviewed. 

A couple of industry executives Exchange Monitor spoke with briefly this week said they did not know of any specific instances of contracts being terminated or dramatically altered. 

“This process shall commence immediately and shall prioritize the review of funds disbursed under covered contracts and grants to educational institutions and foreign entities for waste, fraud, and abuse,” according to the memo from Chung. “EM shall complete this review within 30 days of the executive order.”

Field office managers and Washington, D.C.,-based executives should go over both prime cleanup contracts as well as non-cleanup contracts, according to the document. The latter category can include such things as interagency agreements and financial assistance grants.

The memo stipulates “where appropriate and consistent with applicable law, terminate or modify,” existing contracts, including “through negotiation.”

“Work with the prime contractor(s) in a collaborative manner to identify concrete opportunities for sustainable costs reductions in overhead and base operating costs along with corresponding opportunities for mission acceleration,” according to the Chung memo.

The memo urged managers to focus on issues such as “right sizing contractual requirements” and “increasing demand for more robust performance expectations” as well as reducing overhead costs.

The end result might be something akin to “Contract XYZ was retained” but Environmental Management was able to identify a 5% reduction in indirect costs, “allowing additional money for cleanup work,” Chung said in the memo.