DOE Privatizing of Oklahoma Oil Lab to Save $25 Million Over Next Five Years

Advances Clinton Commitment to Reinvent Government
and Meets Goal of DOE's Strategic Alignment Initiative

Washington, DC - With the Department of Energy's (DOE) Strategic Alignment Initiative approaching the end of its first year, Energy Secretary Hazel R. O'Leary announced today that the department had completed plans for the first of the initiative's major privatization efforts.

DOE reached an agreement with BDM-Oklahoma, its petroleum program management contractor, to privatize the Government's principal oil research laboratory in Bartlesville, OK. The action will save taxpayers at least $25 million over the next five years and permit more funding to go to actual petroleum research rather than to administrative overhead.

The privatization action meets one of the key objectives of the department's Strategic Alignment Initiative, a government reform and cost savings plan which Secretary O'Leary announced on August 3, 1995. DOE is also well underway in two other privatization efforts, one to transfer a Federal environmental laboratory in Montana to private ownership, the other to sell the Government's share of the Elk Hills Naval Petroleum Reserve oil field.

"These efforts are central to President Clinton's plan to reinvent' government," said Secretary O'Leary. "We are making Government work better and cost less by transferring to the private sector those operations more effectively carried out in the commercial marketplace."

The Federally owned National Institute for Petroleum and Energy Research in Bartlesville, OK, is one of the Government's longest-operating R&D institutions with a research history that dates back to 1918. Under the privatization plan, BDM-Federal, the parent company of BDM-Oklahoma, intends to move research staff from the Federal facility to leased space at the Phillips Petroleum Company's R&D facility in Bartlesville, pending final approval of leasing arrangements. BDM will continue to carry out DOE-sponsored oil research projects for the remaining two years of its management and operating contract with the Energy Department while attracting additional research and other projects from Federal and State government agencies and the private sector.

By November 1998, when DOE's contract with BDM-Oklahoma expires, the new private research facility should be self-sustaining. It will be encouraged to compete for future DOE research funding in addition to offering its research and other services to other agencies and private companies.

"This agreement takes a major step toward ensuring a viable Government petroleum program in the future even as budgets decline," said Patricia Fry Godley. "With this plan, we will be able to spend a greater percentage of tax dollars on actual petroleum research that can benefit our domestic producers rather than using it to pay overhead and to maintain research facilities. This is a prime example of how Government can do more for less."

The first researchers will begin moving to the new laboratories as soon as lease arrangements between BDM and Phillips are finalized. By October, approximately 85 of the current 200 BDM scientists, engineers and support employees will have transferred to the leased facilities. Other BDM employees will remain at the Federal site to carry out facility shutdown and environmental cleanup activities.

As part of the agreement, BDM will reduce its remaining workforce at the Federal facility by approximately 20 positions by October 1996, and other positions will be phased out over the next two years. Some employees will be relocated to other BDM offices in the United States. Workers who may be involuntarily separated will be offered severance packages including displaced worker medical benefits and outplacement assistance. Relocation and educational assistance will also be an option for eligible displaced workers.

DOE will offer the Federal property for disposal through the General Services Administration. DOE said it would also entertain expressions of interest from academic or other institutions that might wish to take over ownership of some or all of the facility.

DOE is also examining options for relocating the 23-person Federal staff that currently manages the National Oil Program from offices at the Federal site. The Department is currently considering plans that would keep the Federal employees in Oklahoma.

-End of TechLine-

For more information, contact:
Robert Porter, DOE Headquarters, (202) 586-6503, e-mail: robert.porter@hq.doe.gov