With its $29.5 billion budget request for fiscal 2012, the Department of Energy is angling to be among the few agencies to get a funding increase as most of the government endures deep cuts.

With Energy Secretary Steven Chu set to visit Capitol Hill this week to explain to appropriators why his department can handle a 12 percent budget increase over what was enacted in fiscal 2010, two veteran DOE officials are touting what they say is the secretary's unique aptitude for handling large sums of cash.

Like many before them, DOE Chief Financial Officer Steve Isakowitz and Undersecretary for Nuclear Security Thomas D'Agostino noted in interviews last week that Chu is uniquely qualified for his post in part because he is a Nobel Prize-winning scientist. But while others have said that Chu's academic background has helped him avoid the more political aspects of his Cabinet post, Isakowitz and D'Agostino claim that it has also helped make him an exceptional steward of agency resources.

That is because the scientist in Chu is obsessed with details.

Even in his earliest organizational meetings, Chu would often go deep into the weeds in questioning newly appointed agency leaders about a particular issue in their department, Isakowitz recalled.

"The point was not so much on the issue he was raising, but he was trying to set an expectation for people who lead these programs at headquarters that it wasn't good enough to say, 'I don't know. That's being handed out in the field,'" Isakowitz said. "He expected all the senior leaders to know that level of detail."

And that has helped DOE avoid costly problems before they happen.

D'Agostino, a former Navy submarine officer, borrowed a quote from the late Adm. Hyman Rickover -- a man known as the father of the United States nuclear Navy -- in describing Chu's leadership style.

"The devil is in the details, but so is salvation," he said. "You ask questions about the details of somebody's program not because you want to run those details but because you want your managers to run those details. And that's what happens. I've seen it in the Navy, and I've seen it here recently in [DOE] in the past two years."

Isakowitz and D'Agostino both joined the agency during the George W. Bush administration and were sworn into their posts three months apart in 2007.

The two men were retained by President Obama after the 2008 election and have maintained their posts even as Chu has seen the departure of more than a half-dozen top officials over the past six months.

Three of those departures came last week (Greenwire, Feb. 22).

Insiders on and off Capitol Hill have questioned whether at least some of those departures have had something to do with Republicans gaining control of the House of Representatives and promising to use their new subpoena power to hold agency leaders accountable for their massive budgets (E&ENews PM, Feb. 22). Republicans have been particularly critical of the Obama administration's American Reinvestment and Recovery Act, which set aside about $40 billion for DOE programs.

Among those who have left DOE since last fall are Chu's stimulus spending adviser and the assistant secretary for the energy efficiency and renewable energy program, which was the office that received the largest chunk of stimulus money within DOE.

Stewardship at issue

Several energy experts said this week that in order to get the budget increase he is seeking for fiscal 2012, Chu will likely have to convince appropriators on Capitol Hill that he has been a worthy and effective steward of the funds entrusted to him through the American Reinvestment and Recovery Act.

"It's certainly for the best to be mindful of where taxpayer's funds are going and making sure that they are being spent efficiently and effectively. But the state of play on the Hill is that it's all about jobs," said Salo Zelermyer, a former DOE lawyer during the George W. Bush administration who now works for Bracewell and Giuliani.

Zelermyer pointed out that the Obama administration spent a great deal of political capital making the case that clean energy spending by DOE and other federal government agencies through the stimulus would equal jobs for Americans.

"The push-back from the House side and Republican leadership is going to be that," Zelermyer said. "Those jobs haven't materialized and you've worsened the debt situation."

One K Street energy specialist and former Capitol Hill aide put it more bluntly.

Chu "has egg on his face from the way he managed those stimulus monies," said the lobbyist, who asks that his name not be used to protect his working relastionship with DOE. "Those programs that could have created the most jobs out of the stimulus effort, like the loan guarantee program, never got off the ground. So Republicans will focus on those programs when they look at DOE's budget."

But department CFO Isakowitz paints a much different picture of DOE's stimulus spending efforts under Chu.

Chu's motto throughout the stimulus process has been to "spend fast, spend well," Isakowitz said. And with that in mind the secretary has encouraged the CFO's office to develop a new resource tracking tool to effectively manage the massive amounts of money DOE was entrusted with.

The result was DOE's iPortal data tracking program, which Isakowitz believes is the gold standard among stimulus tracking programs being used by government agencies. Isakowitz said he has already been in contact with other department CFOs who are interested in incorporating the tool into their own stimulus tracking efforts.

Like most things involving Chu, iPortal provides its user with an incredible level of detail. The program allows Chu to track spending against targeted goals and track dollars down to specific counties and localities.

"There have been instances where a governor would call [Chu] in those early days and say, 'Hey my state should be getting more money.' And he would be able to say on the same phone call to say, 'I don't know about more money but I do know of the dollars you've got, we don't see it moving at all,'" Isakowitz said.

'Just like driving your car'

To the extent that he has heard criticism of DOE's stimulus spending, Isakowitz said, it has been more about spending fast rather than spending well.

One example of that concern can be found in a report last August from DOE's inspector general that concluded that the spending of stimulus money for the department's energy block grant program had fallen well short of anticipated goals (E&ENews PM, Aug. 12, 2010).

As of last August, grant recipients had expended $270 million, or 8 percent, of the $3.2 billion that had been authorized for the program in the Recovery Act. By last month, grant recipients have spent $791 million, or about 25 percent, of the total that had been authorized.

But Isakowitz said there are several reasons DOE has needed some time to ratchet up its pace of spending.

"The monies we have put out frankly have been and are significantly different that what other agencies do," he said. "Many of the dollars we put out were not formula money -- meaning it's preset how much you give everybody -- but were competed. We had to go through a full competition for many of the dollars we put out."

Other programs, such as Chu's much-touted Advanced Research Projects Agency-Energy (ARPA-E) innovation arm were completely new programs that had to be built from the ground up, a process that takes time to do right.

As recently as last summer, DOE was managing a stimulus fund spending rate of $300 million to $400 million a month. By the start of the new fiscal year last fall, Isakowitz said DOE had hit a stimulus spend rate of $800 million to $1 billion a month. And that is a pace that he believes that DOE should be able to effectively maintain for the rest of the fiscal year while still guarding against waste.

In determining what the agency's proper spending rate should be at a time when the country continues to try to dig itself out of the worst recession in modern history, Isakowitz quoted the agency's former stimulus adviser Matt Rogers.

"It's just like driving your car," he said. "You don't want to be driving it 80 miles an hour because you might get out of control and that's when problems happen. And of course you don't want to be going too slow either."

As for the likely GOP argument that DOE's success in deploying its stimulus money will be judged by the number of jobs created, Isakowitz said that any evaluation of the department's contribution to the job market should take a longer view.

"The Recovery Act in our case is an investment in the future," he said. "It's not just putting people to work for a couple years. In our case we think we are making investments in an area that the private sector simply would not invest in. They are things that generally higher risk but higher payoff for the nation. We think the role we're playing is an appropriate role for the government."

Focus on project management

While his office did not receive stimulus funds, D'Agostino's National Nuclear Security Administration would get $11.8 billion in new budget authority next year if Obama's fiscal 2012 budget is enacted, That is a nearly 20 percent increase from the 2010 enacted level.

Administration officials have said the increases at NNSA are necessary to improve and replace aging facilities and infrastructure, continue nuclear weapon life extension programs, and fund stockpile surveillance and stewardship programs. But Republicans in the House, in their efforts to trim the federal deficit, did not exempt NNSA from cuts in their continuing resolution (CR) for federal spending in fiscal 2011.

Last week, the chairman of the House Appropriations subcommittee with jurisdiction over DOE said he did not believe there were many "tough decisions" made in the president's budget request for the agency.

"I think we are making a lot tougher decisions in the CR," said Rep. Rodney Frelinghuysen (R-N.J.). "And we've tried to do that in a very careful and thoughtful manner."

But D'Agostino said Chu has already made tough decisions by instituting tougher project management controls to cut waste both inside NNSA but also in its many dealings with the Department of Defense.

In the past, he said, project requirements would occasionally come down from DOD, and NNSA would simply address the request without regard to resources required to get them done.

"What the secretary is focused on is project management," D'Agostino said. "If there's an increased work that has to happen, we have to make sure we have the resources and timing and schedule to do that. ... It's not just enough to break down the ... stovepipes. It's making government work better."

In its latest update to its "high risk" list, the Government Accountability Office recognized that NNSA had made significant progress in the past two years addressing weaknesses in its contract management and project performance, though it noted that more remains to be done.

D'Agostino said that Chu's scientific background and his management experience as a lab director continue to be key qualities as he helps drive those management changes in NNSA and the entire department.

"The understanding of what it's like being in the field versus coming at it from a purely business standpoint or more political standpoint ... that makes [Chu] unique," he said. "Every secretary is unique. ... But this is a particularly important package for this particular time."