18 January 2010

High profile fail for USDOE

Stimulus job count lowered by almost 50% 
The US Department of Energy (USDOE) announced it was lowering its claims of stimulus jobs created or saved at Hanford by over 50%.  This announcement comes in response to the Hanford Advisory Board's Budget and Contracts Committee meeting agenda and Heart of America Northwest Executive Director, Gerry Pollet, preparing questions asking how USDOE was counting jobs.
A Tri-City Herald article covered the lowering of the job count last week.  Here, Heart of America Northwest provides you with fuller information:
  • USDOE at Hanford was including in its estimate of jobs created or saved an estimate of jobs from purchases and offsite contracts.  The rationale for this does not hold up to sound economic scrutiny. Essentially, this was an invitation for double counting of jobs. So, if a contractor needed to buy a new backhoe for Hanford, the contractor might say that the need was caused by increased stimulus funded work. Then, an estimate was made of the new jobs created at the backhoe factory based on cost. This had no basis in reality.
  • Pollet raised this question after seeing the figure being touted by USDOE (actually increased to over 3,200 at year's end) compared to the Hanford site's total employment figures. The total employment was not up anywhere near 3,200.
  • Why is this significant?  It appears that USDOE is a lousy investment in job creation due to the high cost of work and the contracting structure, high overhead costs, etc. One new teacher position in WA State with a fully funded classroom costs $75,000. Many construction jobs create a new FTE for less than that. Yet, each job created at Hanford costs over $200,000, and this figure will increase.
  • USDOE spent $273 million of stimulus money at Hanford through the end of November 2009.  At the end of  December, based on work hours reported funded with stimulus funds (based on 40 hours of work for each claimed FTE) there were only 1,423 jobs created or saved. By the time one full year of salary has been paid to these employees, USDOE will have spent at least another $90 million and more likely $150 million. Yet, few additional employees will be added with stimulus funds in the coming months. 
  • USDOE's choice of "shovel ready projects" - demolitions - for stimulus funding should have led to far more job creation. Essentially, USDOE stimulus funds are going to neither creation of jobs or to the highest priority environmental and safety work which should be funded. USDOE says the highest safety and environmental priority it has in the nation is the emptying of Single Shell High-Level Nuclear Waste tanks. Yet, no stimulus funding is going toward speeding the emptying of tanks.

1 comment:

  1. The Federal government needs to be paying much more attention to how the stimulus money is being used, not just at the Hanford site but in all areas where the money is being distributed. At Hanford, if the money isn't being used for what it is said to be used for, what is it actually going toward? It clearly doesn't seem to be utilized for the cleaning of the site nor does it appear to be used for job-creation, an essential aspect of getting our country out of the recession. Why is that they are getting away with this?