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and outcomes of different internal Executive Order 12866 (Catalog of Federal Domestic Assistance
arrangements and agency decisions. Number 84.133B, Rehabilitation Research
This notice of proposed priority has and Training Centers Program.)
(d) Increased knowledge of ‘‘best VR
been reviewed in accordance with
practices’’ for prioritizing and providing Program Authority: 29 U.S.C. 762(g) and
Executive Order 12866. Under the terms
services to individuals with the most 764(b)(2).
of the order, we have assessed the
significant disabilities. The RRTC must Dated: March 22, 2007.
contribute to this outcome by potential costs and benefits of this
regulatory action. John H. Hager,
conducting research on the extent to
The potential costs associated with Assistant Secretary for Special Education and
which individuals with the most Rehabilitative Services.
significant disabilities are given priority the notice of proposed priority are those
resulting from statutory requirements [FR Doc. E7–5590 Filed 3–26–07; 8:45 am]
for services from their respective State
VR programs, and identifying best and those we have determined as BILLING CODE 4000–01–P
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Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Notices 14267
Procurement and Assistance contractor employees, retirees and 2006 generally accelerates required
Management, U.S. Department of dependents fairly. contributions to defined benefit pension
Energy, 1000 Independence Avenue, plans and is expected to increase the
A. Background
SW., Washington, DC 20585, telephone amount that DOE reimburses contractors
202–287–1645. The Department of Energy relies on for pension benefits over the next 5 to
SUPPLEMENTARY INFORMATION: contractors to manage and operate its 7 years.
specialized scientific, engineering,
I. Introduction production and clean-up sites and B. Description of DOE Notice 351.1
Under the Department’s unique facilities. DOE is the only Federal
Management and Operating (M&O) and agency that uses these unique M&O In April 2006, the Department of
other site management contracts, DOE contracts to conduct its missions. Energy issued Notice 351.1 to address
reimburses its contractors for allowable The Department obligates concerns about contractor employee
costs incurred in providing employee approximately 80 percent of its pension and medical benefits. However,
pension and medical benefits to current estimated annual $24 billion budget to due to concerns raised about the policy,
employees and retirees who are eligible 46 major cost-reimbursement contracts in June 2006, it was suspended pending
to participate in the contractors’ pension for management of DOE sites and consultation with stakeholders.
and medical benefit plans. DOE intends facilities in 20 states. Pension and post
The goals of the Notice were to
to continue its approach to reimbursing retirement benefit programs sponsored
improve the Department’s stewardship
costs incurred by its contractors for by contractors include 45 contractor
defined benefit pension plans, 37 of taxpayer dollars by mitigating the
these benefits consistent with cost growth associated with benefit
Government-wide rules on cost contractor defined contribution pension
plans, 23 contractor life insurance liabilities, moderating the volatility and
allowability; however, DOE believes an
plans, and approximately 260 contractor improving the predictability of the
examination of its policies and practices
is appropriate to ensure prudent fiscal medical benefit plans. These benefits Department’s cost reimbursement
management of taxpayer dollars. are provided to approximately 100,000 obligations for benefits, ensuring that
In FY 2006, DOE reimbursed 46 active employees and 100,000 retirees, costs for contractor employee pension
contractors a total of $1.077 billion for dependents and beneficiaries. Although and medical benefits are more
contractor employee pension and DOE reimburses its contractors for consistent with market trends, and
medical benefits—more than a 226 certain costs associated with contractor ensuring fairness to incumbent
percent increase since FY 2000. In employee benefits, DOE contractors contractor employees.
addition, the Department in its FY 2006 employ their own workforces and The major provisions of the Notice
financial statement reported $11.9 sponsor and serve as fiduciaries for all
included continuing to reimburse
billion in accrued unfunded liabilities benefit plans.
Most DOE M&O and site management contractors for costs for current and
for contractor employee pension and retired contractor employee pension and
medical benefits—a 68 percent increase contractors provide defined benefit
plans that are supplemented by defined medical plans under existing contract
since FY 2000. Costs and liabilities
contribution plans and generously provisions; requiring market-based
associated with these benefits are
projected to grow over the next several subsidized medical benefit plans. defined contribution pension plans and
years at a rate that significantly exceeds According to Department of Energy market-based medical plans for new
likely increases in the Department’s market comparisons, on average, the employees, except where to do so would
budget. pension benefits received by DOE be inconsistent with the terms of a
To address these rising costs and contractor employees are higher than collective bargaining agreement;
liabilities, on April 27, 2006, DOE the benefits earned by Federal or private requiring the Secretary of Energy to
issued Department of Energy Notice sector employees. In addition, on approve the costs of contractor proposed
351.1, Contractor Employee Pension and average, DOE contractor employees benefit augmentations; and separately
Medical Benefits Policy. This Notice contribute less for their medical benefit assessing the value of pension and
updated and revised the Department’s costs than Federal employees or private medical benefits to ensure that both are
policy concerning reimbursement of sector workers. market-based. The policy also provided
M&O and site management contractor The scope of DOE’s obligations for for the continuation of pension and
pension and medical benefit costs. On contractor employee benefit costs is medical benefit commitments made by
June 19, 2006, the Secretary of Energy significant and growing. In FY 2006, the contractors through collective
suspended implementation of the Department’s accrued unfunded bargaining agreements.
revised policy to permit consultation liabilities associated with contractor
with stakeholders. employee pension and medical benefits Issued in Washington, DC on March 19,
were $11.9 billion. In FY 2006, DOE 2007.
II. Challenge Presented by Increasing reimbursed its contractors $1.077 billion Ingrid A.C. Kolb,
Departmental Obligations to Reimburse for pension and medical benefit plans. Director of Management, U.S. Department of
Contractor Employee Benefits Costs and liabilities for these benefits Energy.
The Department of Energy is faced are projected to grow at a rate that [FR Doc. E7–5545 Filed 3–26–07; 8:45 am]
with the growing challenge of significantly exceeds projected increases BILLING CODE 6450–01–P
determining how to best balance its in the Department’s budget. Absent
responsibility for funding important actions to control benefit escalation,
national missions, including energy and contractor benefit cost reimbursements
nuclear security, scientific discovery will continue to increase. Further, the
sroberts on PROD1PC70 with NOTICES
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