Letter Report: INS-L-07-03

November 15, 2006

Alleged Waste of Funds Involving Excess Property at Rocky Flats

Letter Report, Nuclear weapons production operations at Rocky Flats were discontinued in 1992. Subsequently, responsibility for Rocky Flats was reassigned from the Department’s Office of Defense Programs to the Office of Environmental Management. In January 2000, DOE entered into a contract with Kaiser-Hill Company, LLC, for the closure of Rocky Flats by December 2006. Closure activities included the dismantling and removal of 805 structures, many of which were radioactively contaminated, as well as the disposal of 600,000 items of excess property and equipment. Rocky Flats was closed on October 13, 2005. The dismantling and removal of structures included the 371/374 Building Cluster. Prior activities in the 371/374 Building Cluster focused on the recovery of plutonium from mission-related work and the treatment of aqueous waste. At the time site facilities were being evaluated for closure, the 371/374 Building Cluster contained radiological and chemical contamination on building surfaces and in building equipment/systems. The Office of Inspector General received an allegation that Kaiser-Hill wasted funds by throwing away thousands of dollars of excess personal property from the 371/374 Building Cluster without making the property available for sale to other parties. It was alleged that the property included items such as tool chests, electric motors, conduits and fittings, spools of wire, and many other types of tools and supplies valued at anywhere from $16 to $8,000. Reportedly, some of the items were brand new and still in their boxes. It was also alleged that, inconsistent with how most of the property was handled, an electrical subcontractor was allowed to take possession of some equipment and remove it from the site. After receiving the allegation, the Office of Inspector General conducted a preliminary inquiry. We were informed that property remaining on-site was considered "economic discard" and that it was cheaper to discard the property rather than incurring costs to decontaminate it and try to sell it at auction. In response to continuing concerns, the Office of Inspector General initiated an inspection into the facts and circumstances surrounding this matter.