This paper explores the successes and failures of privatization and other contract reform initiatives within the DOE Weapons Complex over the past seven years. The paper concludes that the successes and failures of these project delivery methods depend largely on the risks attendant with the project itself. For example, where the wastes to be remediated defy characterization and the technology is innovative, the Department ordinarily should bear most of the risk, and some specie of cost-reimbursable contracting should be employed. On the other hand, where the risks are readily quantifiable and the technology is proven, more of the risk and responsibility can and should be placed on the contractor. This form of risk transference runs the continuum from lump-sum contracting to design/build, to privatization, depending on the circumstances. The preferred contracting form, however, is not dictated solely by project-related risk. Onto this risk must be overlain a set of risks that derive from the project management capabilities and the institutional biases of the oversight M&O or M&I contractor. Foremost among this additional set of risks is the ability of the oversight contractor to employ a level of contractual interface that is commensurate and proportionate with the selected project delivery method.
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