The nuclear bomb factories and research facilities where the United States set the pace for the Cold War arms race are now being cleaned up and closed down. According to the Department of Energy (DOE), it will cost at least $230 billion over the next 40 to 75 years to clean up the waste buried in pits and stored in tanks at these sites.This Herculean task has set off a new race, as military giants like Lockheed Martin and Westinghouse, following federal budget dollars, have jumped into the waste management business. These defense contractors are now competing with big engineering firms like Fluor Daniel for a chance to handle the refuse.The federal government built nuclear bombs, missiles and submarines for more than 40 years without worrying about what to do with all the waste. High-level and potentially volatile atomic soups are now stored in tanks that could explode, while radioactive leftovers stashed in trenches have contaminated ground water supplies and nearby rivers. At the Hanford site in Richland, Wash., liquid waste must be constantly monitored and tested while scientists search for a safe way to transform the liquid and reduce the threat of explosion. And at the Idaho National Engineering Laboratory (INEL), near Idaho Falls, material tainted with plutonium is stored in barrels and landfills as it awaits the opening of some "permanent" waste depository.In 1988, DOE finally began to tackle some of these problems, shelling out billion-dollar contracts for nuclear cleanup. Since then, however, there's been little progress. The department's program increasingly appears to have been a boondoggle from the start: While turning a blind eye to waste, fraud and abuse, DOE allowed big contractors to set prices, cover expenses and withdraw money directly from the federal treasury with almost no DOE oversight. These contractors turned a handsome profit while paying only minimal attention to quality. Industry watchdogs and government auditors have documented in detail how these firms were essentially given a blank check for botched jobs at big nuclear waste dumps. Between 1989 and 1994, DOE poured $7.5 billion into this program without cleaning up a single major radioactive mess."DOE paid [companies] for simply showing up. Not anymore," says Energy Secretary Hazel O'Leary, who took office in 1993 promising a raft of contract reforms. This summer, O'Leary announced a new 10-year national plan aimed at cutting costs, increasing oversight, cleaning up waste and shutting down operations at certain DOE sites by 2006. The department's top brass are now making stops around the country, drumming up public support for the reforms in an effort to get Congress to fund waste operations well into the next century.Instead of hiring several big companies working independently at each site, DOE is trying to streamline the system by awarding work to one lead contractor. The department says it is carefully auditing its contractors and using "performance-based contracts" that pay according to the quality of the work done. DOE describes a future where today's government contractors are tomorrow's private waste managers -- where nuclear waste, which will remain deadly for thousands of years, is left in private hands.Despite all its talk of correcting past mistakes, DOE is still awarding contracts to some of the same pirates who defrauded and abused the old system. "The DOE is not in control of its own complex," says Washington, D.C. attorney Bob Roach, who spent a dozen years doing DOE oversight work. "They [DOE] have become the tools of the contractor." According to Roach, the General Accounting Office (GAO), watchdog groups and even certain DOE officials, daunting cleanup problems remain while a dubious collection of contractors is shuffled around, rehired and trusted with handling the nation's most dangerous waste.Consider Westinghouse. The atomic giant responsible for processing uranium for atomic weapons at Hanford in southeast Washington fleeced taxpayers for millions -- maybe billions -- during its five-year contract to clean up the nuclear mess it had created. In 1994, after a series of investigations by DOE, the GAO and the press, top department officials concluded that Westinghouse wasted one in every three dollars spent on the Hanford cleanup. Another audit conducted by Washington state's oversight office and released in 1994 found more than a quarter-billion dollars concealed in Westinghouse's annual overhead costs (the administrative and miscellaneous money needed to maintain operations). In essence, DOE was paying Westinghouse to run in place. The company cashed in on contracts that turned a huge profit but made little progress with the cleanup.After such probes into Westinghouse's finances, DOE responded by slashing millions of dollars from the contractor's budget. As of October 1, DOE will be relieving the company of its duties at the Hanford dump. Westinghouse, however, has not fallen out of DOE's good graces. Just as it was firing Westinghouse from the Hanford job, DOE renewed the company's cleanup contract at the Savannah River waste site, where it milked big defense budgets in the Cold War effort to produce materials for nuclear warheads.Fluor Daniel, the company DOE recently chose to replace Westinghouse at Hanford, is another participant in the department's game of musical chairs. At the Fernald nuclear dump in Ohio, where uranium was once processed for use with atomic bombs, government and labor officials say Fluor Daniel often overbilled DOE for shoddy cleanup work. A 1995 GAO report found that DOE contractors charged the federal government 40 percent more for waste studies than contractors employed by the Environmental Protection Agency (EPA). Among those contractors, the GAO found Fluor Daniel to be the most expensive, charging 58 percent more on studies than its peers working for the EPA. According to Gerry Pollet of the Seattle-based citizens' group Heart of America Northwest, the GAO is still actively investigating the company's financial abuses.Lockheed Martin, a relatively new player in the nuclear waste business, has a similar profile to Westinghouse and Fluor Daniel. The company has a history of problems with cost overruns and budgetary boondoggles, in addition to allegations of bribery and other dubious dealings with overseas arms customers. Before deciding to give Lockheed its waste contract at INEL, DOE first had to wait for the company to be cleared of charges pending with the Department of Defense.Now comfortably in control of Idaho's waste budget, Lockheed Martin is actually being paid by DOE to short-circuit the reform process. When DOE officials came to town to discuss the department's reform efforts, INEL spokespersons explained how "Lockheed really took the lead" and will help DOE with its "compliance re-engineering." Questioned by Beatrice Brailsford of the Snake River Alliance as to what the department means by "compliance re-engineering," a department official replied, "We have given money to Lockheed to challenge our burdensome regulations." In other words, DOE is paying Lockheed to write its own rules and compliance standards.It's obviously not a good idea to let the fox guard the hen house, yet this is exactly the situation the DOE reform process is perpetuating. In the four years since Secretary O'Leary launched her contract reform, according to the industry newsletter Defense Cleanup, the department has "quietly retreated from perhaps the boldest and arguably one of the most significant reforms -- a plan to stop letting nuclear weapons contractors withdraw money directly from the federal treasury without substantive oversight."DOE defends its policy of giving contractors direct access to government coffers, arguing that it is saving taxpayers' money by avoiding finance fees from private banks. DOE officials also insist the department's new 10-year plan will provide "substantive oversight." So far, however, Hanford is the only site where all expenses must be invoiced and accounted for. And even if Fluor Daniel does own up to all it spends at Hanford, critics of the new reforms say DOE doesn't have the staff to really monitor the operation."There's not enough feds in the system," says Richard Miller of the Oil, Chemical and Atomic Workers Union. "DOE has the largest imbalance of contractors to feds." According to a top DOE official who wished to remain anonymous, "96 percent of the people in environmental management have no training in environmental work."DOE may have a shortage of waste specialists, but it sure doesn't lack spokespersons eager to hype the latest "reforms." When the department's general counsel at the Hanford site describes DOE's "new way of doing business," she sounds exactly like the spokeswoman from Fluor Daniel. Both insist that it's unfair to judge the waste management business by past abuses, and enthuse about how DOE and its contractors make a great team.Beyond the pep talk, however, neither the contractor nor the department seems able to give concrete assurances that fraud and mismanagement will stop. Under the new reforms, costs are supposed to be "independently validated." When asked what the department means by "independent," DOE spokeswoman Susan Brechbill replied, "That has yet to be determined."For Lockheed Martin, what passes for oversight seems more like inbred collusion. After all, the DOE administrators initiating this latest round of contract reforms at INEL are some of the same folks who allowed Westinghouse and the engineering company EG&G to grant themselves tax-funded bonuses.In a 1994 memo to Secretary O'Leary, DOE Inspector General John Layton described how Idaho officials paid out cost-reduction incentives to EG&G, among other companies, without any proof that the contractors were actually saving the government money. Apparently, all contractors had to do to receive a bonus was claim a certain amount of savings.John Wilcynski is one of the DOE officials who was interviewed by the inspector general's office and is suspected of allowing payment without proof. He now evaluates the new "performance-based" contracts and decides how much to pay contractors. In performance reports from DOE's Idaho office, Lockheed Martin is, unsurprisingly, scoring high marks.By expanding private industry's role in waste management, the Department of Energy hopes contractors will use government money to set up shop in the communities that depend on waste jobs. At INEL, for example, DOE is currently seeking bids to build a private, mixed-waste treatment facility. Eventually, once INEL and other government dumps are declared to be "decontaminated and decommissioned," DOE believes this kind of private, spin-off business will form part of an alternative economy that will absorb displaced defense industry workers.Critics in Idaho say such ventures will result in a kind of McWaste drive-through industry where both chemical and radioactive materials will be handled behind closed doors and away from public scrutiny. "It will simply be deregulated and effectively dumped," says Mary Olson of the Washington-based Nuclear Information & Resource Service. "Somebody's just going to say, 'Hey, get rid of this.' It's really a nightmare."Unlike most longtime DOE officials, who are reprimanding veteran contractors with awards and declaring them reformers for maintaining the status quo, a few in the department are working for real change. With the cooperation of industrial watchdog and environmental groups, these officials could help end business as usual.Before real reform can occur, however, DOE needs employees with skills and experience that match the agency's new mandate. Since the refocusing of the department's mission away from energy and defense toward waste cleanup in the late '80s, DOE has done little to hire employees with appropriate experience. O'Leary's appointment as secretary of energy in '93 led to some minor staff shake-ups, but the environmental management offices at DOE are still dominated by staffers brought in from the department's defense and nuclear power divisions. This "old guard" at DOE has helped engineer the transition of contractors like Westinghouse and Lockheed Martin from energy and defense jobs into waste management."During the past 10 years or more, the United States has developed emerging environmental services and technology," says Jim Werner, who heads a DOE environmental management office in Washington, D.C. "These aren't the aerospace giants. What we need to do is make use of these smaller companies."The EPA, state environmental agencies and private companies already utilize the services of smaller waste managers that don't have a history of fraud and abuse. In the past decade, some of these firms have grown enough to compete with the likes of Westinghouse and Fluor Daniel. DOE contractors like CH2M Hill, which is currently cleaning up and handling nuclear materials at the Rocky Flats nuclear weapons plant in Colorado, started out in the minor leagues with an ecologically minded mission. "That's what they are in business to do," Werner says of CH2M Hill. "Some people are juiced up about what they're doing -- that makes all the difference. They also have the mindset of 'Let's get the job done and get out.'