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DOE Warns Governors Layoffs Possible For More Than 28,000 Contract Employees

Monday, March 18, 2013
By Ari Natter

The Department of Energy may soon begin to lay off or furlough more than 28,000 contract employees in 10 states, according to letters obtained by BNA that were sent to governors warning them of how a nearly $1.9 billion reduction in its budget will affect their states.

The letters, which were sent the week of March 4 to states with a large department presence through DOE labs and other facilities, come on the heels of warnings from the agency that contractors were most likely to bear the brunt of the mandatory federal budget cuts known as sequestration that went into effect March 1.

In Washington state, 4,800 contract employees may be laid off or furloughed, including 2,800 workers at the department's Office of River Protection, which oversees cleanup of radioactive waste at the Hanford site. Hanford is a former plutonium production site for nuclear weapons located on the Columbia River, where new leaks in underground storage tanks were recently discovered.

Cuts to Affect Nuclear Cleanup Efforts
“While the Department remains committed to its clean-up effort at Hanford, this decreased funding and the resulting contractor employment actions may curtail our progress related to closing the aging--and in some cases leaking--single-shell tanks storing over 25 million gallons of liquid radioactive waste at the Hanford site,” the department said in a letter to Gov. Jay Inslee (D).

Among the largest possible layoffs or furloughs are more than 8,200 contract employees at the Energy Department's Los Alamos National Laboratory in New Mexico and possibly more than 6,100 in California, which is home to Energy Department's Lawrence Livermore National Laboratory, according to the letters.

In a letter to New Mexico Gov. Susana Martinez (R), the department said the budget reductions could affect the ability of the state's waste isolation pilot plant to receive hundreds of shipments of radioactive waste, “which could curtail progress on radioactive waste cleanup activities in several states across the nation.”

Other layoffs or furloughs detailed in the letters include 2,100 contract employees at the department's Savannah River site, a nuclear research facility in South Carolina, and 1,750 contract employees in Illinois, which is home to the department's Argonne National Laboratory.


Funds Being 'Reallocated'
“The Department is reallocating money from long-term efforts to limit sequestration's near-term impact,” DOE said in the letters. “The impact of prolonged or permanent sequestration, then, would be greater than described here.”

The department also noted possible layoffs or furloughs at Idaho National Laboratory, the Thomas Jefferson National Accelerator Facility in Virginia, the cybersecurity program at the Pantex Plant in Texas, the Y-12 National Security Complex in Tennessee, and the department's Nevada national security site.

The layoffs and furloughs, which the letters said could begin as soon as April 1, come as the effects of $85 billion in across-the-board federal spending cuts take hold.


Contracts Could Be Cancelled, 'Re-Scoped'
While the department has warned that thousands of contractors are considered at risk under the cuts, DOE said in a Feb. 28 memo that most Energy Department employees, for now, will not be subject to furloughs with the exception of the National Nuclear Security Administration and the Office of the Chief Human Capital Officer, which does work related to human resources and workforce training.

In a separate letter obtained by BNA addressed to contractors and financial assistance recipients, the Energy Department said the cuts could result in modifications to procurement contracts, including negotiating lower prices or not exercising options.

“The Department may also determine it necessary to stop or suspend work, reduce the scope of work, or partially or completely terminate your contract for convenience,” the March 4 letter said. “Additionally, planned contract actions for new work may be re-scoped, delayed, or cancelled depending on the nature of the work and the degree to which it directly supports the agency's mission goals.”

By Ari Natter


Text of the letters to state governors are available at /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/palo(1).pdf, and the letter to contractors at /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/the-deputy-secretary-of-energy(1).pdf.

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