The Department of Energy (DOE) will significantly reduce its contractor work force over the next two years in order to cut costs and increase productivity at facilities across the country.

At DOE's annual budget briefing today, DOE officials said the department expects to achieve approximately $1 billion in cost savings annually over the next five years by eliminating approximately 19,000 contractor positions by the end of FY 1996.

The work force restructuring at each site will be based upon analysis of the skills required to meet future missions. This analysis will allow the DOE to reduce overhead costs by eliminating layers of management and redundant positions.

The DOE is committed to lessening the impacts of these reductions on employees and their communities. Consistent with section 3161 of the National Defense Authorization Act of 1993, each affected site will prepare a work force restructuring plan to provide assistance to displaced workers including medical benefit extensions, retraining and educational assistance and outplacement assistance. As always, the input of stakeholders such as employees, community officials and union representatives will be critical in this process. Public meetings will be held at each affected site to allow individuals to comment on these plans.

In addition to reducing the contractor work force, other methods will be employed to make the DOE more efficient and cost effective. These methods include recompeting $28 billion in Environmental Management contracts over the next two years which will encourage competition, innovation and link profits directly to cost-effectiveness. Also, the Department will encourage privatization of functions that can be performed more cost-effectively by private industry.