[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




       A REVIEW OF SECURITY INITIATIVES AT DOE NUCLEAR FACILITIES

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                      OVERSIGHT AND INVESTIGATIONS

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 18, 2005

                               __________

                           Serial No. 109-66

                               __________

       Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

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                             WASHINGTON: 2005        

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                    COMMITTEE ON ENERGY AND COMMERCE

                      JOE BARTON, Texas, Chairman

RALPH M. HALL, Texas                 JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida             Ranking Member
  Vice Chairman                      HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia                 FRANK PALLONE, Jr., New Jersey
ED WHITFIELD, Kentucky               SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia             BART GORDON, Tennessee
BARBARA CUBIN, Wyoming               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
HEATHER WILSON, New Mexico           BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona             ELIOT L. ENGEL, New York
CHARLES W. ``CHIP'' PICKERING,       ALBERT R. WYNN, Maryland
Mississippi, Vice Chairman           GENE GREEN, Texas
VITO FOSSELLA, New York              TED STRICKLAND, Ohio
ROY BLUNT, Missouri                  DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MIKE DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania        JIM DAVIS, Florida
MARY BONO, California                JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon                  HILDA L. SOLIS, California
LEE TERRY, Nebraska                  CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey            JAY INSLEE, Washington
MIKE ROGERS, Michigan                TAMMY BALDWIN, Wisconsin
C.L. ``BUTCH'' OTTER, Idaho          MIKE ROSS, Arkansas
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee

                      Bud Albright, Staff Director

        David Cavicke, Deputy Staff Director and General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

              Subcommittee on Oversight and Investigations

                    ED WHITFIELD, Kentucky, Chairman

CLIFF STEARNS, Florida               BART STUPAK, Michigan
CHARLES W. ``CHIP'' PICKERING,         Ranking Member
Mississippi                          DIANA DeGETTE, Colorado
CHARLES F. BASS, New Hampshire       JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon                  JAY INSLEE, Washington
MIKE FERGUSON, New Jersey            TAMMY BALDWIN, Wisconsin
MICHAEL C. BURGESS, Texas            HENRY A. WAXMAN, California
MARSHA BLACKBURN, Tennessee          JOHN D. DINGELL, Michigan,
JOE BARTON, Texas,                     (Ex Officio)
  (Ex Officio)

                                  (ii)




                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Brian, Danielle, Executive Director on Nuclear Security, 
      Project on Government Oversight............................   104
    Brooks, Hon. Linton F., Administrator, National Nuclear 
      Security Administration....................................    22
    Nanos, G. Pete, Director, Los Alamos National Laboratory.....    80
    Podonsky, Glenn S., Director, Office of Security and Safety 
      Performance Assurance, U.S. Department of Energy...........    30

                                 (iii)



 
       A REVIEW OF SECURITY INITIATIVES AT DOE NUCLEAR FACILITIES

                              ----------                              


                         FRIDAY, MARCH 18, 2005

                  House of Representatives,
                  Committee on Energy and Commerce,
              Subcommittee on Oversight and Investigations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:30 a.m., in 
room 2123, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman) presiding.
    Members present: Representatives Whitfield, Walden, 
Burgess, Blackburn, Stupak, and Inslee.
    Staff present: Dwight Cates, majority professional staff 
member; Mark Paoletta, Chief Counsel; Alan Slobodin, majority 
counsel; Lisa Miller, deputy communications director; Chad 
Grant, legislative clerk; Chris Knauer, minority professional 
staff member; and Voncille Hines, minority research assistant.
    Mr. Whitfield. Good morning, and I want to welcome everyone 
to this hearing today on the review of security initiatives at 
DOE nuclear facilities. We appreciate your being here.
    The subcommittee will focus on several security matters at 
the Department of Energy's nuclear weapons laboratories, 
weapons production facilities, storage facilities, and 
environmental cleanup sites. The protection of nuclear 
facilities and weapons secrets is a priority for us and has 
been the subject of several subcommittee hearings over the 
years.
    The Department has made several significant changes to its 
security policy in the year since the subcommittee's May 2004 
hearing. For instance, last November, the Department made 
supplemental revisions to the Design Basis Threat, or DBT, that 
it had previously finalized in May 2003. The supplemental 
revisions to the DBT in October 2004 have significantly 
upgraded the characteristics of the postulated adversary. 
Consequently, additional security requirements will be 
necessary at each site.
    These changes came about in response to extensive 
interagency discussions regarding the potential size and nature 
of the terrorists that may seek to attack a domestic nuclear 
facility. I welcome these additional changes, but I really 
would like to know how quickly each DOE and NNSA site will 
comply with these extensive new requirements. These upgrades 
will be expensive and they could take years to implement.
    In the past, the conventional management response to 
increased security requirements was to hire a larger guard 
force. I am encouraged that the Department may consider a 
greater use of available security technologies that could 
increase security and reduce the cost of security management at 
each site.
    At our May 2004 hearing, then-Deputy Secretary Kyle E. 
McSlarrow presented the subcommittee with a series of new 
security initiatives. Several of these proposals have already 
been completed or are under development, while some initiatives 
have not started. Mr. Glenn Podonsky, Director of Security and 
Safety Performance Assessment, will present testimony regarding 
the status of these initiatives.
    I am particularly interested in the Department's efforts to 
consolidate nuclear materials across the complex, increase the 
use of new security technologies, and enhance protections to 
classified computer information. I would also note that Mr. 
Podonsky has been to my district on several occasions in the 
past few years to review safety matters in Paducah, at the 
Paducah site, and I welcome him here today.
    Today, we will also hear from Ambassador Linton Brooks, 
Administrator of the National Nuclear Security Administration. 
Administrator Brooks has the responsibility for the weapons 
laboratories, including Los Alamos National Laboratory. Ongoing 
safety and security problems at Los Alamos are a serious 
concern for the committee. We have had numerous hearings on 
security, safety, and business management problems at Los 
Alamos. We hope Administrator Brooks and Lab Director Pete 
Nanos, who will also testify today, can explain how we can turn 
the tide on the bad news at Los Alamos.
    This is the first of what I hope will be several hearings 
on the status of security at DOE nuclear facilities. Protection 
of nuclear materials within our borders is a critical line of 
defense against terrorists. In the future, I plan to focus on 
the DOE and NRC's efforts to secure sealed sources scattered 
across the country. These are radioactive materials found in a 
range of industrial equipment, including medical devices and 
devices used to gauge oil wells.
    After today's third panel, we plan to move the hearing to a 
secure room where we can continue to discuss security matters 
in closed session with Administrator Brooks, Mr. Podonsky and 
Director Nanos. We look forward to your testimony today and 
thank you once again for being here.
    At this time, Mr. Stupak is recognized for his opening 
statement.
    Mr. Stupak. Thank you, Mr. Chairman, and thank you for 
having this important hearing.
    Today's hearing will be yet another glimpse by this 
committee into the myriad of issues surrounding the security 
status of DOE's weapons complex. I am very pleased to report 
that considerable progress has been made over the past 5 years. 
I remain concerned that a range of issues still requires 
attention by this committee, the Department of Energy, and the 
National Nuclear Security Administration. These matters, which 
I intend to delve into in closed session, will be the mainstay 
of this hearing.
    I look forward to exploring with our witnesses why it is 
that we still haven't addressed certain known deficiencies at 
key sites and when we can expect some conclusions on these 
matters.
    Mr. Chairman, as you know, there are a number of sites in 
this complex that receive very formidable attention. While I 
fully agree that additional progress must be made to ensure 
that the DOE sites meet the new Design Basis Threat 
requirements, I intend to ask our witnesses to explain in 
detail where gaps remain.
    For example, we will need to clearly articulate a list of 
top priorities needing attention and then offer a detailed 
explanation on what must occur to bring finality to these 
matters. Many of the problems that we have discussed today are 
the very same concerns that have plagued the complex for nearly 
a decade.
    So let me pose to both to Mr. Brooks and Mr. Podonsky that 
you both succinctly tell us what is still vulnerable and why, 
what needs to be done to rectify any such vulnerabilities; and 
provide this committee with key dates on when it will get done.
    During the course of this hearing, I am sure a number of 
key facilities and their security status will be discussed. I 
am also expecting that this committee will continue to examine 
this area and assess the ongoing progress throughout the next 
18 months, as you have indicated, Mr. Chairman.
    Mr. Chairman, I have urged that both of us personally visit 
a variety of these facilities as soon as possible. I would like 
to personally visit those sites where considerable progress has 
been made and those sites where there is considerable work 
going on. I would ask that Mr. Brooks work with us to set up 
such field visits in the near future.
    If there is good news in today's discussion, it is the fact 
that the DOE complex, as compared to other potential targets 
across the United States, have considerably improved and are 
hardened. Of course, more can and should be done, and I will 
work with all parties to ensure that forward progress is made.
    Nonetheless, as you know, over the course of the past 3 
years, this committee has worked incredibly hard to address a 
range of other issues related to homeland security, 
specifically on the nuclear materials proliferation and 
smuggling fronts. It is my opinion that this Congress must be 
far more aggressive in addressing the many roles that DOE, the 
Department of Homeland Security, and NNSA are playing in that 
arena.
    Specifically, I am interested in all aspects of how these 
agencies are securing the many sources of materials throughout 
the globe and the myriad of issues surrounding the 
identification and interdiction should such material fall into 
the wrong hands.
    Mr. Chairman, this committee has already expended 
considerable time and effort on some of these matters, 
including spending considerable resources examining the roles 
DOE plays in setting up detection technology in foreign ports. 
In fact, as part of our effort, staff from this committee have 
visited almost 30 ports and border crossings to assess what 
kinds of equipment are being installed domestically to make 
sure there are no smuggled nuclear materials, and to assess 
what roles the national labs and DOE are playing in assisting 
the Department of Homeland Security in this capacity. It is my 
understanding that we will continue to work in this regard. I 
sincerely believe it is among the most important matters being 
addressed by this committee.
    Finally, Mr. Chairman, it is my understanding that this 
committee will continue to examine these matters and that we 
will soon hold additional hearings on these topics. I applaud 
the effort and will continue to lend my full support to this 
effort.
    In closing, Mr. Chairman, I do have one housekeeping matter 
I would like to discuss. I note that Mr. Nanos from Los Alamos 
will be testifying today. I have a great deal of respect for 
his work and I look forward to his testimony. In particular, I 
am looking forward to hearing about how Los Alamos is 
progressing since the major events of last year.
    Nonetheless, I do have documents that I hope he will be 
able to shed some light on. This is the White Paper which 
characterizes an audit by Mr. Don Brown. I know Mr. Nanos is 
familiar with this audit. Mr. Brown was apparently an auditor 
at that facility with considerable quality assurance, quality 
control expertise. Mr. Brown conducted a series of audits at 
Los Alamos; and according to this document, major issues 
involving quality control and quality assurance were found and 
may continue to plague the facility.
    This document appears to have been created by an individual 
who, I am guessing, had at least some standing at the Los 
Alamos complex, at least enough to be allowed to do these kind 
of audits. I think we need more information on this matter, Mr. 
Chairman, and I would like to indulge your help in seeking some 
clarity about this audit.
    I would also request that Mr. Nanos provide in writing a 
point-by-point response to each of the concerns laid out in 
this document. I assume this would not be too burdensome. While 
this may not be directly related to the site security, per se, 
I nonetheless believe that if the matters are true and they 
involve quality assurance and quality control issues, then 
those could indeed seriously affect how this lab is run and, 
ultimately, impinge upon both safety and security. I am hoping 
that Mr. Nanos will be able to provide the information to us 
and resolve this matter quickly.
    Let me finish by again thanking you, Mr. Chairman, for 
having this hearing. I would greatly like to thank our 
witnesses, Mr. Brooks, Mr. Podonsky, who are certainly key 
players in this arena and both have been very supportive of the 
committee's work.
    As the new ranking member of the subcommittee, I am indeed 
looking forward to working with you both over the course of 
this Congress. I would also again like to welcome Mr. Nanos 
from Los Alamos. As you know, while we do not always agree with 
some of the decisions made at your facility, I nonetheless look 
forward to working with you and appreciate the hard work you 
and your colleagues have put forth in the mission of protecting 
the United States and in the efforts of trying to get the 
facility back on track after the events of the last few years.
    Finally, Mr. Chairman, I want to thank Ms. Brian from the 
Project on Government Oversight. Ms. Brian's organization has 
been a continuous source of information about what corrections 
are needed at the DOE complex. As always, we are pleased to be 
provided with her expertise and that of her organization, and I 
want to thank her for being here.
    Mr. Chairman, I thank you again and yield back the balance 
of my time.
    Mr. Whitfield. Thank you, Mr. Stupak.
    Without objection, the document that the gentleman referred 
to will be made a part of the record, and we will ask that Mr. 
Nanos respond to those questions as you asked, and we look 
forward to his response on that.
    [The information referred to follows:]
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    Mr. Whitfield. At this time, I will recognize Dr. Burgess 
for his opening statement.
    Mr. Burgess. Thank you, Mr. Chairman, and thank you for 
calling the hearing. I will waive the opening statement. I have 
one I will put in the record, but in the interest of time and 
hearing from the witnesses, I will submit that for the record.
    [The prepared statement of Hon. Michael C. Burgess 
follows:]
  Prepared Statement of Hon. Michael C. Burgess, a Representative in 
                    Congress from the State of Texas
    Thank you Mr. Chairman, and thank you for having this important 
hearing.
    At this time in American history, our national security has become 
the most important issue facing our nation. It is critical that we do 
everything within our power to ensure that our nuclear weapons are 
highly secured and protected. We cannot allow our national security to 
be compromised because of inadequate safeguards that are poorly 
implemented. The recent security incidents at the Los Alamos National 
Laboratory illustrate that changes must be made to guarantee the safety 
of weapons and top clearance material.
    I share my colleagues' deep concern with regards to the safety of 
nuclear sites in America and abroad. I look forward to the opportunity 
to review both the security status of nuclear weapon facilities and 
discuss security initiatives that can be implemented to better ensure 
that our nation is protected. I also hope that additional insight can 
be provided regarding the security matters at Los Alamos.
    Again, Mr. Chairman, I thank you for this crucial hearing in which 
we can address some of these essential concerns regarding nuclear 
facilities and the security of our nation.

    Mr. Whitfield. Thank you very much. At this time, I 
recognize Mr. Inslee for his opening statement.
    Mr. Inslee. Thank you. I just wanted to thank the Chair for 
his continued interest in this, because trust of the public is 
really paramount here, and we have some work to do to get to 
the level we need. Thank you.
    Mr. Whitfield. I would also note that all Members will have 
30 days to submit their opening statements for the record. The 
Chairman of the Energy and Commerce Committee, Mr. Barton, was 
not able to be with us today but did want me to emphasize his 
interest in this subject matter and that he will be submitting 
his opening statement as well.
    [The prepared statement of Hon. Joe Barton follows:]
 Prepared Statement of Hon. Joe Barton, Chairman, Committee on Energy 
                              and Commerce
    I thank the Chairman for holding today's hearing on security at the 
Department of Energy's nuclear facilities.
    At the Subcommittee's DOE security hearing last year, DOE announced 
several important security initiatives. I look forward to testimony 
from Mr. Podonsky and Administrator Brooks on the status of each of 
these initiatives. I recently wrote to the new Secretary, Mr. Bodman, 
regarding these initiatives. I hope he will support them and ensure the 
Department follows through on all of them.
    I also look forward to testimony from Los Alamos Director Pete 
Nanos. This past year has been another difficult year for the Lab. Last 
fall, Director Nanos told me that the recent stand-down at Los Alamos 
would cost the taxpayers $100 million. I was not convinced this would 
be the final figure, and DOE now estimates the cost of the stand-down 
at $370 million.
    I supported the stand-down because of the severity of the security 
and safety problems at Los Alamos. However, the necessity for the 
stand-down and its duration are the direct result of recurring 
mismanagement by the University of California, and I believe UC should 
pay at least some of the stand-down costs.
    The University of California's repeated mismanagement of security 
and safety matters has been the topic of several oversight hearings. At 
each hearing, the university promised to fix the mismanagement, but 
these promises never seem to get implemented.
    I hope Director Nanos can explain a recent audit report that 
discovered 21 unauthorized sheds built at Los Alamos to store millions 
of dollars of supplies and equipment that seem to have been accumulated 
by circumventing normal inventory controls.
    Structures stashed with shiny new gear that is available to vanish 
without being missed--does this sound familiar? It should. The 
Subcommittee held three hearings in the Spring of 2003 that revealed 
weaknesses and outright fraud in procurement and inventory controls at 
Los Alamos.
    In my opinion, it is just not fair to continue asking the taxpayers 
to pick up the tab for the university's ineptitude.
    Probably the only real opportunity to begin to solve the problems 
at Los Alamos is to hire a new contractor, and I support DOE's decision 
to re-compete the Los Alamos contract.
    I look forward to today's testimony, I thank the Chairman and I 
yield back.

    Mr. Whitfield. At this time, I will recognize the 
witnesses. Our first panel includes, as I have already 
indicated, the Honorable Linton Brooks, who is Administrator of 
the National Nuclear Security Administration; and Mr. Glenn 
Podonsky, who is the Director of the Office of Security and 
Safety Performance Assurance at the United States Department of 
Energy.
    As you know, it is the custom with our Oversight and 
Investigation Subcommittee to ask that the witnesses testify 
under oath, and advise you that also have a right to counsel if 
you wish to do that.
    So I would ask both of you, are you willing to testify 
under oath this morning?
    Mr. Brooks. Yes, sir.
    Mr. Podonsky. Yes, sir.
    Mr. Whitfield. Do either of you prefer to have counsel with 
you.
    Mr. Brooks. No, sir.
    Mr. Podonsky. No, sir.
    Mr. Whitfield. Then, if you will rise.
    [Witnesses sworn.]
    Mr. Whitfield. Thank you. You are now sworn in, and at this 
time, I would call on Mr. Brooks for his opening statement.

  TESTIMONY OF HON. LINTON F. BROOKS, ADMINISTRATOR, NATIONAL 
    NUCLEAR SECURITY ADMINISTRATION; AND GLENN S. PODONSKY, 
DIRECTOR, OFFICE OF SECURITY AND SAFETY PERFORMANCE ASSURANCE, 
                   U.S. DEPARTMENT OF ENERGY

    Mr. Brooks. Thank you, Mr. Chairman, and thank you for this 
opportunity to discuss this important issue. Before I give my 
opening statement, I would like to associate myself with the 
remarks of your ranking member. I would very much like to have 
members of this committee visit our facilities. They are large, 
they are complex, and it is a case where a visit is worth a 
thousand words.
    I would be happy in the question period to answer questions 
on the broader subject of materials and would also be willing 
to do that at a later date.
    I want to cover three areas, and I am abbreviating, with 
your permission, my formal statement. I want to talk about what 
we have done to improve physical security, to improve 
classified material security, and to improve Federal 
supervision of our contractors.
    My basic message is simple. While we still need to improve, 
none of the national security assets entrusted to NNSA are at 
risk, and our security program is robust and effective. 
Physical security has been focused on the need to respond to 
the increased threat that you mentioned, Mr. Chairman, in your 
opening statement.
    In May 2003, the Secretary approved the Design Basis Threat 
that increased the number and sophistication of attackers. We 
are scheduled to meet the Department's requirements to be fully 
compliant by the end of fiscal year 2006. In May of last year, 
we undertook a review of threat intelligence, and we made 
changes for still further enhancements and will meet this new 
standard by the end of fiscal year 2008.
    We will be happy to discuss in closed session the 
intelligence that led us to those changes and what the changes 
are and the degree to which or the difficulty we will or won't 
have in meeting them.
    In general, what we have done is, first, increase the 
number of uniformed protective forces and improved their 
weaponry. We have added barriers, we have closed roads, we have 
increased security patrols, we have increased access controls, 
and we have enhanced employee awareness of threats.
    Now, our near-term solutions relied on the application of 
more guards and more guns. Those are costly measures we cannot 
afford to apply indefinitely, so we are also focusing on 
consolidation of special nuclear material, primarily right now 
within sites, but ultimately, by eliminating material at sites, 
and on the increased use of technology.
    At the Y-12 plant, construction of a Highly Enriched 
Uranium Materials Facility has begun and is scheduled for 
completion in April 2008. That will lead us to consolidate all 
the special nuclear material in an exceptionally secure 
facility. It will be ultimately matched with a processing 
facility that will be within the same security perimeter and 
connected by an underground passageway so it is an effective 
single site. In the interim, the site has done some innovative 
efforts to use containers to form de facto forts in order to 
slow the potential path of an attacker.
    At Los Alamos, we have removed nuclear material from five 
facilities since 2001. We are moving material from Technical 
Area 18 to a facility at the Nevada test site. Technical Area 
18 will be empty of Category I and II special nuclear material 
by later this year.
    At Sandia National Lab we will shut down the Sandia Pulsed 
Reactor in 2007, and that will end operations with special 
nuclear materials at Sandia.
    Over the longer term, we have charged a congressionally 
mandated weapons complex review with looking at how we might 
end plutonium operations at Livermore while maintaining their 
capability to participate in the stockpile stewardship. These 
findings will be available in late April.
    Now, consolidation is important, but it alone is 
insufficient. America's strength is technology, so we are 
deploying advanced concept armored vehicles, we are deploying 
remotely operated weapons systems, we are beginning integration 
of smart camera systems into security, and we are implementing 
new vehicle detection systems. In the longer term, we are 
looking at additional active denial systems, more remotely 
operated weapons and more advanced detection systems. Finally, 
we are working with Mr. Podonsky's office to expedite the 
fielding of technology we had developed in the past but not 
fully implemented.
    Now, consolidation and technology help, but security will 
always depend on well-trained protective forces. We are going 
to try to reduce the reliance on protective forces, but we will 
never eliminate it. Most of our protective forces are dedicated 
and competent but we have had problems.
    Three years ago, for example, at Sandia, we had security 
officers sleeping on duty, we had incidents of racial tension, 
and we had an unprofessional attitude. Under our direction, 
Sandia took major steps to improve the leadership. To make sure 
they were adequate, I commissioned a retired Air Force major 
general to go out and personally observe the steps Sandia was 
taking. Based on his reports, my reports, and those of my 
observations, I think performance and morale at Sandia, in the 
protective force, are remarkably improved.
    We have also had problems with lost keys. Keys didn't allow 
access to classified material or special nuclear material, but 
their loss showed--there were a series of incidents about 2 
years ago that showed that security procedures needed 
improvement. Basically, we had too many keys. And so we are now 
in the process of moving to a keyless environment. At the Y-12 
plant, we have reduced the number of keys by 85 percent.
    Finally, working with Mr. Podonsky, we are working toward 
the creation of a true elite paramilitary force among our 
guards. Progress is steady but uneven. For example, Mr. 
Podonsky discovered substandard performance by the protective 
force at the Nevada test site last summer. The site manager was 
sufficiently concerned to turn over routine operation of her 
site office to her deputy and take personal supervision of the 
recovery plan.
    Security of nuclear materials has to be matched by security 
of classified information. We have initiated efforts to reduce 
classified holdings at all facilities. Classified information 
for us is not just documents and computer disks but also a 
large number of classified parts. At Y-12, we have moved a 
million pounds of classified material to long-term secure 
storage.
    In July of last year, Dr. Nanos, Director of Los Alamos, 
imposed a stand-down on essentially all operations at the lab. 
He did that because of a series of safety and security 
problems, including an inability to locate two classified 
computer disks. Three separate investigations have now 
convinced us that the missing disks never existed, but those 
investigations revealed significant security management 
problems. In essence, the problem is, it took us several months 
to realize what happened.
    I provided the committee a copy of the report the former 
Deputy Secretary and I prepared, and a copy of the letter 
outlining the significant fee reduction imposed on the 
University of California for this decision. As a result of 
these problems, the Department has tightened restrictions on 
accountable classified material throughout the complex. We now 
require these items be maintained in centralized lending 
libraries with a formal checkout procedure and full-time 
trained custodians.
    Once again, the key, however, is to reduce the amount of 
material. Los Alamos, for example, has reduced from over 90,000 
pieces of accountable removable electronic media to about 
23,000. We are now in the process, however, of enabling further 
reductions by working toward a so-called ``diskless computing 
environment,'' where classified computing does not depend on 
removable hard drives, removable Zip drives.
    When I came to this position 3 years ago, I became 
concerned that I did not have enough competent Federal security 
professionals. In March 2003, I asked retired Admiral Hank 
Chiles to look at our approach to staffing. As a result of his 
work, we are trying to revitalize the Federal security 
workforce. We are improving formal training and certification 
of security officials, we are about to implement an intern 
program to recruit for the long term, and we are improving 
training and management.
    Under the structure that I have created, supervision of 
contractors is carried out by Federal site offices located at 
each of the eight NNSA facilities. Last summer, when the 
investigation at Los Alamos revealed significant security 
problems, I became concerned because the problems came as a 
surprise to the site office. This was in sharp contrast to the 
safety problems, where the site office had, I submit, at least 
as good an understanding as the laboratory and probably better.
    Then, when we had the poor inspection at Nevada, I became 
concerned because the results were a surprise to the site 
office. I wasn't concerned that the inspection went poorly--if 
inspections never go poorly, they aren't tough enough--but I 
was concerned that my people were surprised by the result.
    So I led a team of senior officials to visit each of my 
sites to look in depth at how we were providing our supervisory 
responsibility. I concluded I needed to fix four areas: I 
needed to fix leadership, I needed to fix the numbers and 
training of our security experts, I needed to improve hands-on 
involvement, and I needed to provide more help from 
headquarters.
    I replaced two of the six senior site security officials. I 
had previously replaced one other. Some of my site managers had 
a tendency to think of security as somebody else's problem; I 
have corrected that misperception. We are working on improving 
training and qualification, and we are increasing the number of 
security professionals at the site offices.
    I also became concerned with the way we were providing our 
supervision. In safety, we get out into the facility a lot. In 
security, we have a tendency to review reports. So we are 
gradually trying to move toward a more day-to-day, hands-on 
approach.
    Finally, my only way to know my site offices were doing 
well was when Mr. Podonsky came every other year with a full-
scale inspection. I concluded that I needed more frequent 
feedback. So I'm establishing an office to assess and validate 
security performance and provide assistance to the site 
managers as a supplement to what Mr. Podonsky does. I believe 
the steps we have put in place will improve our supervision of 
security, but I won't know that for a few more months.
    Mr. Chairman, we remain committed to maintaining the 
security of the facilities and the materials and the 
information we guard. I am as confident of the security of our 
facilities as at any time in my tenure. I am not, however, 
satisfied. It is essential we continue the improvements we have 
under way. Only by doing so can we ensure long-term security.
    Thank you, and I look forward to your questions.
    [The prepared statement of Linton F. Brooks follows:]
  Prepared Statement of Linton F. Brooks, Under Secretary for Nuclear 
  Security and Administrator, National Nuclear Security Administration
                              introduction
    Mr. Chairman, members of the Committee, thank you for this 
opportunity to address security at the National Nuclear Security 
Administration's nuclear weapons research and production facilities. I 
would like to cover three major areas:

 NNSA's progress on improving physical security
 NNSA's progress on improving the security of classified material
 NNSA's progress on improving Federal supervision of contractor 
        security operations.
    It is important to recognize that there are other important 
security areas such as material control and accounting, the management 
of personal security clearances and human reliability, 
counterintelligence, and cyber security. Mr. Podonsky and I would be 
happy to respond to questions in these areas but because they have not 
been contentious I will not cover them in my statement.
    Let me begin by stating none of the vital national security assets 
entrusted to the NNSA--nuclear weapons, Special Nuclear Material, or 
classified materials--are at risk anywhere within the nuclear weapons 
complex. Our security program is robust and effective. Secretary Bodman 
has re-affirmed the Department's commitment to the security of the 
nuclear weapons complex.
    At the same time, there have been significant security problems at 
some of our sites. Later in this statement I will describe what we have 
been doing to correct those problems and where we still have work to 
do.
                           physical security
    In the past three and one half years, physical security at NNSA 
sites has been dominated by the need to respond to the increased threat 
in the aftermath of the attacks of September 11, 2001. Prior to 2001 we 
assumed a relatively limited threat of attackers who sought to steal a 
weapon. For example, we could counter the threat by trapping the 
attackers in a weapons vault so they could not escape. 9/11 taught us 
that larger attacks were possible and that terrorists were willing to 
die to inflict massive damage. We shifted to a strategy of denying the 
attacker any access to nuclear weapons. In May 2003, based on an 
Interagency Working Group postulated threat, the Secretary approved a 
Design Basis Threat (DBT)that significantly increased the number of 
attackers against which we plan. Because the May 2003 DBT dramatically 
increased both the numbers and sophistication of the adversaries, it 
will take until the end of Fiscal Year 2006 for the Department to be 
fully compliant. That effort is on track within NNSA and all our 
facilities will meet the requirements of the May 2003 Design Basis 
Threat by the end of FY2006.
    In May, 2004 the Department undertook a review of all available 
threat intelligence. Mr. Podonsky and I will be happy to discuss the 
results of that review in detail in closed session. As a result of that 
review, the former Deputy Secretary approved changes to our graded 
protection strategy for certain types of special nuclear materials and 
a further increase in the size of the attack against which we must 
defend. His decision was codified in an October 2004 revision of the 
Design Basis Threat. Once again, we will be happy to go into details in 
closed session. The revised threat sets an exceptionally demanding 
standard and uses very conservative planning assumptions. We plan to 
meet this new standard by the end of FY2008.
    A new round of vulnerability assessments is under way across the 
complex to determine enhancements required to meet this threat. Sites 
will submit their implementation plans and resource requirements by the 
end of July 2005. Once these plans have been reviewed, we will be able 
to formulate the impact of these requirements on security costs, but 
almost certainly additional resources will be required in FY2007 beyond 
those shown in our budget projections.
    Many will conclude that such an attack is highly unlikely. No 
matter how low the probability, however, the potential consequences 
demand that we deter our enemies and deny them access to nuclear 
weapons or special nuclear materials.
    To deal with this threat we have increased the number of uniformed 
protective forces, added barriers, closed roads, increased security 
patrols and detection procedures, increased access controls, and 
enhanced employee awareness of potential threat concerns. We were 
forced by necessity to meet the increase in threat with proven near-
term solutions that rely on the application of more guards and guns--
costly measures that we cannot afford to apply indefinitely.
    Because of this we are also focusing on consolidation of special 
nuclear material and on increased use of technology. At the Y-12 plant, 
one of our oldest sites, we are implementing a modernization strategy 
to consolidate special nuclear material storage and operations in 
facilities with designed denial features. Non-SNM operations will be 
moved outside high security areas to reduce costs. Construction of the 
Highly Enriched Uranium Materials Facility, which will provide us with 
more secure storage for SNM, has begun and is scheduled for completion 
in April 2008. In the interim, the site has provided for additional 
delay through an innovative use of large containers to form de facto 
forts protecting areas of greatest concern.
    At Los Alamos National Laboratory, we have removed critical special 
nuclear materials from five facilities since 2001 and consolidated 
those operations within a single technical area. Material from Los 
Alamos' Technical Area 18 is currently being moved to the Device 
Assembly Facility on the Nevada Test Site--a facility designed for high 
levels of security in a more defendable area. Prior to the recent Los 
Alamos stand down, we expected TA-18 to be empty by September of this 
year. (Some of the material scheduled to go to Nevada will be stored on 
an interim basis within the protected area of the plutonium production 
facility.) We are still evaluating whether this schedule can be met 
without compromising safety. Any delay will be brief.
    At Sandia National Laboratories in New Mexico, shut down of the 
Sandia Pulsed Reactor in 2007 will end operations with special nuclear 
material at that site. Over the longer term, I have charged the Weapons 
Complex Review Team to look into ending all plutonium operations at 
Lawrence Livermore National Laboratory in California, while still 
maintaining Livermore's capability to participate in the Stockpile 
Stewardship program. This team is examining the future of the entire 
weapons complex and will present its findings in late April.
    NNSA has also begun to work with the Department's Office of Nuclear 
Energy, Office of Science and the Office of Environmental Management to 
evaluate the use of two facilities at the Idaho National Laboratories 
for interim storage of material from throughout the NNSA complex. One 
of these facilities was built to provide high levels of security for 
reprocessing of spent nuclear fuels; the other is a well-protected 
material storage building. We are in the opening stages of this 
evaluation and still must determine any legal barriers and additional 
physical security or construction requirements, but these facilities 
may offer exceptional opportunity to consolidate materials and 
components in a location with robust security features in place.
    Consolidation is important, but it alone is insufficient for 
protecting nuclear materials from terrorists. America's strength is in 
technology. To continue the transformation of security in the nuclear 
weapons complex we must harness the technological prowess of the United 
States to reduce our reliance on manpower-intensive solutions. We have 
already begun deployment of advanced concept armored vehicles and 
remotely operated weapons systems at Y-12. We are beginning integration 
of smart camera systems into the existing security systems at two 
facilities. Y-12 will also be implementing new vehicle detection and 
assessment systems and a new access delay system that utilizes 
activated delay technology that will not damage facilities.
    In the longer term, we are looking at employment of additional 
active denial systems, remotely operated weapons, and more advanced 
detection systems that will reduce our reliance on manpower and provide 
earlier detection and attrition of an adversary. The Nevada Test Site 
will serve as a test platform for developing these concepts. To ensure 
the effective use of technology and system design we have established a 
Safeguards and Security Engineering Team with representatives from each 
of our sites and several of our Federal components to share best 
practices for physical security and to conduct peer reviews of proposed 
new security line item construction projects. This Team has already 
completed reviews of projects at Los Alamos and Y-12. Finally, we are 
working with Mr. Podonsky's Office of Safety and Security Performance 
Assurance to expedite the fielding of technology developed in the past 
but not fully implemented.
    While consolidation and technology help, security will always 
depend on well-trained protective forces. While most of our protective 
forces are dedicated and competent, we have had problems. Three years 
ago, for example, the Sandia protective force had significant problems 
with officers sleeping on duty, incidents of racial tension and a 
general unprofessional attitude. Under our direction, Sandia took major 
steps to improve the leadership and supervision of the force. To ensure 
those steps are adequate, I commissioned a retired Air Force Major 
General to assist my local Site Office in overseeing corrective action. 
Based on both my personal observation and on those of my subordinates, 
I believe the performance and morale of the Sandia protective force is 
vastly improved.
    Starting two years ago we had significant problems with lost keys 
at both the Y-12 plant and the Lawrence Livermore National Laboratory. 
Although in no case could these keys allow access to special nuclear 
material or classified information, we saw their loss as a sign that 
security procedures needed improvement. In addition to instituting 
improved procedures, we concluded we had too many keys. I therefore 
established an initiative to move to a ``keyless'' environment. At Y-
12, for example, we have reduced the number of security keys by 85 
percent and no key type security locks are used to protect special 
nuclear materials.
    Working with Mr. Podonsky's Office of Safety and Security 
Performance Assurance, we are working toward creation of a true elite 
para-military force at all our sites. Progress is steady, though 
uneven. For example, an independent assessment by Mr. Podonsky's office 
last summer uncovered sub-standard performance by the protective force 
(and other contractor elements) at the Nevada Test Site. The NNSA Site 
Manager turned over the routine operation of the federal Nevada Site 
Office to her Deputy and took personal supervision of the recovery 
plan. While corrective action is well along, I am disturbed by what 
this incident says about the quality of NNSA's day-to-day supervision 
of our contractors. I will have more to say on this point in a few 
minutes.
                      classified material control
    Security of nuclear materials must be matched by security of 
classified information. To improve our ability to protect such 
information, we have initiated efforts to reduce classified holdings at 
all facilities by destroying excess classified material and moving some 
holdings to areas where they can be better controlled. At Y-12, for 
example, we have moved over 1 million pounds of classified materials to 
approved long-term storage containers. Similar efforts are underway at 
all facilities.
    The Committee is well aware of the problems with classified 
removable electronic media (CREM) at Los Alamos National Laboratory. In 
July 2004 the Laboratory Director imposed a stand down on essentially 
all activities because of a series of safety and security problems, 
including an inability to locate two classified computer disks. While 
separate investigations by the University of California, NNSA, and the 
FBI all concluded that the missing disks never existed, they also 
revealed serious problems with security management at Los Alamos. I 
would like to provide the Committee for the record a copy of the report 
prepared by the former Deputy Secretary of Energy and myself that 
outlines the problems in detail. I would also like to submit for the 
record a copy of a letter outlining the significant reduction in the 
management fee awarded the University of California for the operation 
of Los Alamos that I imposed as a result of these deficiencies. In 
addition, the Laboratory took disciplinary action including terminating 
three individuals, demoting several supervisors and suspending several 
individuals without pay.
    In addition to correcting the specific performance problems at Los 
Alamos, the Department has tightened restrictions on accountable CREM. 
We now require that these items be maintained in centralized lending 
libraries with formal checkout procedures enforced by full time trained 
custodians. Still, a contributing cause of the problem at Los Alamos 
was that we simply have too much classified material throughout NNSA 
and the rest of DOE. Los Alamos itself, for example, has gone from over 
90,000 pieces of accountable CREM in January, 2004 to about 23,000 in 
September. To reduce this number further, we need to move to a diskless 
workstation computing environment. When classified information is 
stored on central servers with no desktop ability to remove such 
information, we will be able to significantly reduce the potential for 
inadvertent or intentional mishandling of classified information. We 
are now forming a task force under my supervision to accelerate the 
shift to diskless computing throughout the entire Department.
    One element of both physical security and classified material 
control is control of access. We are conducting analysis of the current 
access control infrastructure throughout the nuclear weapons complex 
and examining technologies used by the private industry. This analysis 
will establish a baseline for enhancements to ARGUS, an access control 
and intrusion detection system that has become the standard application 
for NNSA facilities. We have also formed an Integrated Project Team for 
dealing with Homeland Security Presidential Directive 12--Policy for a 
Common Identification Standard for Federal Employees and Contractors, 
which requires ``smart cards'' for physical and logical access to 
Federal sites, buildings and systems.
                          federal supervision
    I would like now to turn to Federal supervision of security. 
Congress created NNSA in response to security lapses at our national 
security laboratories. While I believe we have had a number of 
successes in various areas, I am aware that this Committee and Congress 
as a whole will judge us by the degree to which we ensure adequate 
security throughout the weapons complex.
    Shortly after assuming my current position, I became concerned that 
I did not have adequate competent security professionals to carry out 
my responsibilities. In the short term, I sought to deal with this 
problem by additional recruiting, but to ensure the long-term health of 
the Federal security community, in March 2003 I commissioned retired 
Admiral Hank Chiles to conduct an extensive review. Such a review had 
not been conducted previously. As a result, we are implementing a Human 
Capital Management Program to revitalize the Federal security work 
force that oversees security at our laboratories, plants, and storage 
facilities. In addition to provisions for the formal training and 
certification of Federal security officials, we will soon implement an 
intern program designed to attract and train the new Federal security 
officers who will provide leadership and guidance to the NNSA of the 
future.
    To provide further focus and clear direction, in June, 2004 I 
created a new Associate Administrator for Defense Nuclear Security, 
reporting directly to me on an equal footing with the heads of my major 
programs. This office consolidated all NNSA security functions and is 
headed by a security professional with over 35 years of security 
experience both at Headquarters and in the field, as well as recent 
experience in the Nuclear Regulatory Commission's Office of Nuclear 
Security and Incident Response.
    Under the NNSA structure I have established, supervision of 
contractors in all areas--security, safety, and business practices--is 
carried out by Federal Site Offices located at each of the eight NNSA 
facilities. Last summer, when investigation of the apparently missing 
disks at Los Alamos began to reveal significant security management 
problems, I became concerned not just by the problems themselves but by 
the fact that they came as a surprise to the security professionals at 
the Site Office. This was in marked contrast to the safety problems at 
Los Alamos, all of which we were aware of in advance.
    My concern heightened when the contractor at Nevada performed 
poorly on a periodic inspection by Mr. Podonsky. I was not as concerned 
with the actual performance--if no one ever does poorly the tests are 
too easy--as with the fact that the Site Office expected much better 
performance. As a result of these two incidents I personally led a team 
of senior security officials to the six sites with special nuclear 
material. At each site I focused on security performance and, in 
particular, on how supervision of the contractor was conducted. The 
results varied widely. At some sites we had impressive supervision, 
with strong involvement of the Site Manager, an active program of 
surveillance and inspection, and an exceptional understanding of the 
strengths and weaknesses of the contractor performance. At other sites 
we were far poorer.
    Following my review, I concluded that I needed improvements in four 
areas: leadership failures, inadequate numbers of trained Federal 
security experts, a lack of hands-on involvement, and failure to 
provide sufficient headquarters supervision. We took the following 
actions to correct these problems:

 Not surprisingly, the most important determinant of our effectiveness 
        was the leadership provided by the senior security professional 
        at each site. After consulting with the local federal Site 
        Manager, I replaced two of the six senior security officials (I 
        had previously replaced one other). A second leadership issue 
        involved the local Site Managers themselves. Although they were 
        the senior Federal official at each site, some had a tendency 
        to leave supervision of security to their subordinates. I have 
        corrected this.
 As a result of the Chiles Commission I referred to earlier, we were 
        already working on improving training and qualification of our 
        security professionals. In addition, we are just finishing a 
        detailed review of staffing that will result in increases in 
        the numbers of security professionals at most Site offices.
 A third problem concerned our method of supervising the contractor. 
        In the area of safety our experts spend a great deal of time 
        out in the facility observing operations. At the better sites, 
        this is true for security as well, but at some sites our 
        security experts spent much of their time reviewing paper 
        rather than conducting hands on observations, except for an 
        annual survey conducted over a period of less than a month. We 
        are gradually shifting our approach to emphasize continuous 
        surveillance as a supplement to annual surveys.
 Finally, my only check on the performance of the Site Offices was the 
        inspections conducted every other year by the Office of 
        Security and Safety Performance Assurance. To provide 
        assistance to Site Managers and assurance to me that our 
        performance is adequate in between these inspections, I am 
        moving to formally establish an Office of Performance Assurance 
        under the Associate Administrator for Defense Nuclear Security. 
        The Office will assess and validate security performance across 
        the NNSA and identify opportunities for improvement. It will 
        work closely with the Office of Security and Safety Performance 
        Assurance in the conduct and response to annual security 
        surveys and periodic independent oversight reviews. I am 
        confident that this new Office will strengthen the capabilities 
        of individual site offices to perform effective supervision of 
        NNSA's security contractors.
    In parallel with this effort, initially at my request and 
subsequently at the request of another Committee of Congress, the 
Office of Security and Performance Assessment conducted a review of 
NNSA supervision of security. Their conclusions validated my own and 
also indicated the need for greater attention to monitoring of 
corrective actions. I believe we have provided the Committee a copy of 
that review. I believe the steps we have put in place will dramatically 
improve our supervision of security at our sites.
                               conclusion
    NNSA remains fully committed to maintaining the security of the 
national treasures we guard. I am as confident of the security of our 
facilities as at any time in my tenure. I am not, however, satisfied. 
It is essential that we continue the security improvements we have 
underway, upgrade the protective forces, and improve Federal 
supervision. Only by doing so can we discharge our responsibilities, 
fix our problems as they occur, and ensure the long-term security of 
the nuclear weapons complex.
    Thank you for your attention. I look forward to your questions.

    Mr. Whitfield. Thank you, Mr. Brooks.
    At this time, Mr. Podonsky, you are recognized for your 
opening statement.

                 TESTIMONY OF GLENN S. PODONSKY

    Mr. Podonsky. Thank you, Mr. Chairman and members of the 
subcommittee, for holding this hearing and for the invitation 
to testify today regarding the status of security at the 
Department of Energy.
    The story of security at the Department of Energy over the 
past several years is one significantly affected by change, 
change in the global security situation and in the recognized 
threat we face; change in the missions and configurations of 
our weapons complex; and change in how we approach and practice 
our security responsibilities.
    Today, I will summarize the progress made and the efforts 
to enhance the security posture of the DOE, and I will also 
discuss with the committee those areas where the efforts have 
fallen far short and require additional work. I have addressed 
these in some detail in my written testimony.
    The DOE has made significant, but not sufficient progress 
in the past 3\1/2\ years. Following the September 11 terrorist 
attacks, the DOE took immediate actions to increase security, 
as Ambassador Brooks just said in his opening statement. We had 
an elevated security condition imposed; we added additional 
physical security measures, such as increasing protective force 
posts, enhancing access controls, and erecting barriers to 
increase standoff for vehicle bombs; and we modified some 
operational procedures.
    Follow-on actions included initiating a review of our 
Design Basis Threat, and creating my office to increase the 
effectiveness of interaction on security matters between 
headquarters and the field.
    Last May, the DOE initiated a wide-ranging set of security 
initiatives to address known security problems and to begin 
transforming our protection systems to meet our future security 
needs. These initiatives are central to the current security 
enhancement efforts and encompass four broad areas.
    Information security initiatives involve efforts to improve 
our cyber security programs by expanding the performance 
testing and improving capabilities and procedures for 
recognizing, reporting, and disseminating and reacting to 
attacks on our cybersystems, as well as moving to a diskless 
desktop environment for classified computing.
    Our security technologies initiatives are aimed at 
addressing specific problems, such as creating a keyless 
security environment and enhancing our protection programs 
through other technologies.
    A third set of initiatives addresses our need to 
consolidate our inventories of special nuclear materials.
    Our final set of initiatives involves improving our 
security of human capital and includes a range of activities to 
improve recruitment, training for security professionals, as 
well as the development, as Ambassador Brooks just mentioned, 
of the elite-level protective force at our more sensitive 
facilities.
    These initiatives, 15 in all, represent an aggressive 
agenda to transform and enhance our protection programs and 
meet the requirements of our revised Design Basis Threat and to 
respond to emerging threats.
    The Department is continuing to pursue these initiatives. 
Some have been completed, most are progressing, some 
significantly more slowly than we prefer. DOE must pursue these 
security initiatives aggressively, especially since we have 
continued to experience problems with implementation of our 
protection programs and related management systems.
    For example, some local line management feedback and 
improvement mechanisms, such as Federal security survey 
programs and contractor self-assessment programs, have not been 
effective enough to detect and correct existing protection 
program deficiencies. This is verified by deficiencies found by 
our independent oversight office at sites such as Hanford, Oak 
Ridge National Laboratory, Sandia National Laboratories, Y-12, 
and Nevada test site. These problems, which included such 
things as poor protective force performance, deficient nuclear 
material control and accountability programs, inadequate 
classified document control, and deficiencies in physical 
security systems should have been identified and corrected by 
the local management before our independent oversight office 
found them during their inspections.
    On a somewhat wider scale, we have experienced problems in 
the last year or two, as you know, with lock and key control 
systems and with maintaining adequate controls for classified 
removable of electronic media, or CREM, as we have learned to 
call it. Again, in many cases, line management control 
mechanisms at individual sites did not properly detect and 
correct the conditions.
    We can expect that various problems are going to emerge 
from time to time in systems as large and complex as our 
protection programs. What is important is that we identify 
those problems as they are emerging and correct them before 
they do us harm. We depend on local DOE line management for 
this timely identification and correction. However, the local 
management, as I have stated, has not always been up to the 
task.
    The most significant security-related changes we face today 
and in the near future are those associated with implementing 
our current Design Basis Threat. Meeting the elevated 
requirements of the revised DBT will require significant 
changes in many of our protection systems, and at a significant 
cost. This effort is going to require the identification, 
procurement, and integration of new technologies into our 
protection systems, significant efforts to raise the skill 
levels of some of our protective forces and other security 
professionals, and a concerted effort to reduce and consolidate 
our special nuclear material inventories.
    To address the first of these efforts, we currently have a 
site-assistance visit activity under way that is intended to 
apply our best technological, analytical, and tactical 
expertise to assist our most critical facilities in identifying 
security technology applications and innovative strategies to 
effectively and efficiently meet the requirements of the DBT.
    We are encouraged by the ideas resulting from these visits, 
but individual sites will have to follow up that effort to 
finalize the designs and compute the costs of their proposed 
protection system upgrades. Ultimately, Mr. Chairman, the 
Department will have to devise ways to integrate new security 
technologies, new protective force weapons, and tactics with 
operational needs and safety concerns; and we will need to find 
the funding sources for those enhancements.
    We are upgrading the capabilities currently in the 
curricula at our National Training Center in Albuquerque, which 
will play a central role in elevating the skill levels of our 
protective force and other security professionals, as well as 
those managers responsible for the security and safety program 
implementation or oversight.
    Consolidating the special nuclear materials to the greatest 
degree practicable may prove to be the most difficult 
challenge, because even after we identify consolidation 
opportunities and address the related programmatic issues, such 
as construction of storage facilities, funding, and relocation 
programs, we will be faced with Federal, State and local 
political obstacles to relocating these materials that the 
Department will not be able to solve internally.
    In closing, we believe the Department is, in fact, actively 
pursuing initiatives that will improve the capabilities of the 
security systems. I am confident that Secretary Bodman and 
Ambassador Brooks are, in fact, committed to continuing these 
efforts. Unfortunately, Mr. Chairman, the Department has not 
always followed through on its commitments. However, it is my 
opinion that it is a new day with Secretary Bodman. He has made 
it clear he will not tolerate missed commitments and inadequate 
management controls, and that the Department will enact 
innovative and effective methods to foster the necessary 
changes in our security practices and cultures to counter the 
evolving threat.
    While this effort is large and is difficult, it is not 
impossible. With support from this committee and others on 
Capitol Hill, and together in cooperation with our stakeholders 
at every level, we can and we will succeed.
    Thank you, Mr. Chairman.
    [The prepared statement of Glenn S. Podonsky follows:]
 Prepared Statement of Glenn S. Podonsky, Director, Office of Security 
      and Safety Performance Assurance, U.S. Department of Energy
    Mr. Chairman and members of the subcommittee, thank you for 
inviting me to testify today regarding the status of security programs 
in the Department of Energy. The story of security in DOE over the past 
several years is one significantly affected by change--changes in the 
global security situation and in the recognized threat we face; changes 
in the missions and configurations of our weapons complex; and changes 
in how we approach and practice our security responsibilities. Today I 
will discuss the progress we have made, amidst those changing 
conditions, on our efforts to enhance our security posture. I will also 
discuss those areas in which our efforts have fallen short and in which 
additional work is needed, and discuss the major security challenges we 
face over the next few years.
    Let me start by reaffirming what I hope the members of the 
subcommittee fully recognize: the Department understands that we have 
custody of some of the nation's most vital national security assets, in 
the form of both information and materials. We know that the protection 
of these assets is vital to our national security, and we are committed 
to protecting them. There is no item more important than security on 
the agenda of the Department's senior management. During the past four 
years, former Secretary Abraham and former Deputy Secretary McSlarrow 
championed the cause of security and actively guided our efforts to 
improve our protection posture. Secretary Bodman has continued that 
legacy by strongly affirming his commitment to protecting the 
Department's vital national security assets, facilities, and employees. 
While we remain convinced that we have in the past, and continue to 
adequately protect our vital national security assets, we have 
acknowledged all along that our efforts have not been flawless. We must 
continually adapt our security programs to a changing world and to an 
evolving threat environment, and we can and must find ways to further 
strengthen our security posture. It is with those convictions that we 
have been aggressively pursuing security improvements during the past 
four years.
                    security enhancements since 9/11
    The September 11th terrorist attacks made it painfully clear that 
our long held ideas of postulated threats had become all too real. To 
ensure that we were adequately protecting our assets against this 
elevated threat, we knew we needed to take immediate action. Let me 
summarize some of the things we have done since 9/11 to strengthen the 
Department's security posture and to contribute to the Nation's 
security efforts.
    On September 11th, we imposed an elevated Security Condition, or 
SECON, and instituted a number of other actions to increase physical 
security measures at our facilities, and particularly around our most 
sensitive targets. These actions, which varied from site to site 
depending upon local needs and characteristics, included: increasing 
the number of protective force posts and patrols; closing key streets 
and parking areas; and, erecting additional barriers to increase stand-
off distances for potential vehicle bombs. Because these enhanced 
security measures had to be implemented immediately, in many cases our 
line managers were forced to turn to manpower-intensive solutions 
involving increased protective force activity. We have been at a 
heightened state of alert at varying SECON levels, since 9/11.
    Our protective forces could not bear this level of burden 
indefinitely so to relieve that additional burden and seek cost 
effective and efficient ways to maintain enhanced security, we turned 
to technology solutions. We selected the very best security 
technologies available to deploy at our sites, ranging from explosives 
detection to chemical defense and cyber security. At the same time, we 
evaluated the human factor associated with highest risk environments. 
Resulting changes in the Departmental Human Reliability Program have 
improved the measures by which we assess the physical and mental 
suitability of individuals who occupy our most critical positions.
    We reassessed the Design Basis Threat--the planning basis for our 
protection requirements--in an effort to ensure that our increased 
security measures were responsive to our new understanding of the 
threat. A new Design Basis Threat policy was issued in May 2003. Each 
site developed implementation plans and began efforts to meet the 
requirements of the new policy. As a consequence of our efforts to 
upgrade security since 9/11, our security spending increased from $883M 
in 2001 to $1.44B in our 2006 request.
    The series of Secretarial Security Initiatives announced in May of 
last year represents the most ambitious and comprehensive of our 
current security enhancement efforts. The initiatives are broad and far 
ranging, and impact most major elements of the Department's protection 
programs, including those of the National Nuclear Security 
Administration. The initiatives can be grouped into four broad program 
areas: information security; new security technology solutions; 
consolidation of materials; and strengthening security human capital 
expertise. Together, they directly or indirectly impact every aspect of 
our protection programs. These initiatives are so central to our 
current effort that is it worthwhile to briefly describe each one and 
its current implementation status.
    One set of initiatives involves information security. Much of the 
information we possess today, including classified information, is 
created on computers and stored on computer media. Unfortunately, the 
fast pace of technological development of computer hardware and 
software seems to be equaled by the pace of development of methods for 
adversaries to exploit that hardware and software. If we are to 
continue to operate effectively, we have to actively protect the 
confidentiality, integrity, and availability of all of the information 
on our automated systems, and we have to be able to do that even while 
we are under cyber attack. Consequently, we have to be on the cutting 
edge of cyber security and must employ tools, systems, procedures, and 
configurations. Recognizing the urgency of this imperative and the 
potential consequences of falling behind in this area, we resolved to 
do more to ensure that our protection systems keep abreast of emerging 
threats. The three cyber security initiatives are aimed at: increasing 
testing used to identify (and eliminate) our cyber vulnerabilities 
before an adversary does; enhancing protection and training measures 
within our information security systems; and reducing the exposure of 
classified information stored on computer media. While these 
initiatives include some longer-term developmental activities, most can 
be implemented in the near term. The cumulative effects of these 
initiatives will significantly enhance our cyber protection abilities. 
A synopsis of each of these three initiatives and our current progress 
in achieving full implementation follows.

 Expand Cyber Security Performance Testing. This initiative expands 
        our independent oversight organization's cyber security 
        performance testing program for both classified and 
        unclassified information systems by: expanding the scope and 
        increasing the frequency of unannounced penetration testing; 
        conducting continuous scanning of unclassified computer systems 
        to reduce the exposure to Internet threats; and expanding 
        testing of classified computer networks to ensure appropriate 
        need-to-know protection boundaries are in place and are 
        effective.
      The institutional structures necessary to implement this 
        initiative have been put in place, and expanded testing has 
        already begun. The necessary additional personnel, computer 
        systems, and testing tools have been procured and operating 
        procedures and testing protocols have been validated. Expanded 
        unannounced penetration testing and enhanced testing of 
        classified systems has commenced. We are preparing to begin 
        continuous network scanning and penetration testing to reduce 
        Internet exposure, starting with Headquarters and subsequently 
        phasing in additional sites.
 Cyber Security Enhancements. This initiative consists of integrated 
        steps intended to protect the confidentiality, integrity, and 
        availability of our information systems by quickly 
        disseminating cyber threat information, expanding intrusion 
        detection systems that rapidly identify cyber attacks, reducing 
        the exposure of our information systems to Internet threats, 
        and improving workforce cyber security training.
      DOE's Chief Information Officer is leading the efforts associated 
        with this initiative. To date, we have: increased inter- and 
        intra-agency sharing of cyber threat and vulnerability data; 
        incorporated intrusion detection and prevention into our cyber 
        security enterprise architecture; completed independent reviews 
        of Headquarters implementation of the Department's Cyber 
        Security Management Program; upgraded cyber security training 
        programs; and developed a methodology to identify inappropriate 
        information on publicly accessible websites. This methodology 
        was applied to an initial website cyber security analysis.
 Diskless Desktop Computing. The use of Classified Removable 
        Electronic Media (CREM) to store information has been a 
        persistent security challenge, primarily due to the ubiquity of 
        the media. This initiative seeks to eliminate or greatly reduce 
        this challenge by moving, within a five-year period, to 
        diskless workstations for classified computing. The National 
        Nuclear Security Administration has been tasked to identify and 
        implement appropriate diskless technologies. Successful 
        technologies will then be implemented Department-wide.
      A ``tiger team'' completed a review of potential technical and 
        management solutions to this issue. The team identified 
        requirements for providing high-speed desktop workstations and 
        proposed a set of standard diskless workstation solutions, cost 
        estimates, and related recommendations. On January 31, the 
        former Deputy Secretary directed the formation of a Project 
        Management Office within NNSA to manage implementation of this 
        initiative.
    Another set of initiatives involves the development and deployment 
of new security technologies. Two of the security initiatives are aimed 
specifically at enhancing our protection programs through increased use 
of security technology solutions. One is focused on addressing an area 
that has been associated with several security incidents--specifically, 
replacing lock and key systems in security areas with modern, keyless 
entry control systems. Although fairly narrow in scope, this initiative 
represents a massive undertaking, given the number of locks and keys 
currently in use at our security areas throughout the complex. The 
other security technology initiative is a much broader effort aimed at 
identifying, evaluating, or developing a broad range of useful 
technologies and facilitating deployment at DOE sites. We are 
particularly interested in identifying technologies that can help our 
protective forces better counter the ever-changing threats to our 
national security assets. Properly applied, such technologies can act 
as force multipliers to assist our protective forces by reducing the 
burden of routine activities, reducing the risk to them in case of an 
attack, and, through enhanced recognition, provide additional response 
time to meet and defeat an attack.

 Keyless Access Control Technology. NNSA is researching and 
        identifying suitable technology that will enable the Department 
        to transition, over a five-year period, to a keyless security 
        environment where no single item that provides access to 
        protected assets, can be lost or stolen.
      We are making progress in this area. My office has developed a 
        current technology matrix that provides specific descriptions 
        of keyless systems, their costs, and locations where they are 
        currently in use. The NNSA formed a multi-organizational 
        Technology Review Team to analyze these alternatives. 
        Additionally, the efforts of the Integrated Project Team which 
        is addressing HSPD-12--the Policy for a Common Identification 
        Standard for Federal Employees and Contractors, which requires 
        ``smart cards'' for physical and logical access to Federal 
        sites, buildings, and systems, will complement these efforts.
 Blue Sky Commission. This initiative involves the identification of 
        off-the-shelf security technologies available for rapid 
        deployment and the establishment by NNSA of a Blue Sky 
        Commission to evaluate promising emerging technologies that the 
        Department can invest in or develop to enhance our future 
        protection systems.
      While we are taking action to identify and apply existing 
        technologies to enhance our protection systems, we have not yet 
        taken the formal steps necessary to coordinate investment in 
        emerging security technologies. The Technology Development 
        Program, within my organization's Office of Security, has 
        disseminated information about current off-the-shelf items 
        suitable for integration into security systems. Last July we 
        established the Center of Excellence for Technology Deployment 
        at Pacific Northwest National Laboratory (PNNL) in Richland, 
        Washington. The Center's mission is to find technologies with 
        security applications that are deployable today; to assist in 
        implementing pilot programs at DOE sites to test those 
        technologies; and to assist in the further deployment at other 
        DOE sites of those technologies that prove to be effective and 
        useful. Let me emphasize that this Center's job is not to 
        develop new technologies, but rather to seek out new 
        technologies that are available today and to expedite their 
        evaluation and, when appropriate, their speedy integration into 
        security systems at DOE sites. In an effort to assist sites in 
        choosing appropriate technologies to implement the current 
        Design Basis Threat, we are in the final stages of a series of 
        Site Assistance Visits to our facilities possessing Category I 
        quantities of special nuclear materials. During these visits, 
        our multi-organizational, multi-discipline teams work with site 
        security personnel to analyze the existing and future site-
        specific protection systems and identify security technologies 
        that could be employed to increase the effectiveness and 
        efficiency of those systems. This effort, which I will come 
        back to in my discussion of the Design Basis Threat, has been 
        beneficial to the sites. Our progress in enhancing our efforts 
        to identify and invest in the development of emerging 
        technologies has been somewhat slower. Although we anticipated 
        that NNSA would formally establish the Blue Sky Commission last 
        October, that action has yet to occur.
    Before I leave this topic, let me mention some of the progress we 
have made in technology deployment. Several technologies have recently 
been deployed at sites throughout the complex to significantly improve 
their ability to mitigate our Design Basis Threat policy. For example, 
newly developed armored vehicles with advanced fighting capabilities 
are being deployed at two sites. These vehicles will allow protective 
forces to be forward-deployed and engage adversaries earlier, while 
relying on improved armor to increase their survivability and 
externally mounted weapons and optics to neutralize adversaries. 
Chemical agent detectors are also being deployed at six locations. 
These detectors are unique in that they are able to operate 24 hours a 
day for extended periods (years), require minimal maintenance, and 
provide sufficient time for response forces to don protective gear and 
engage the adversary. Unmanned Aerial Vehicles UAVs are also being 
deployed to help conduct surveillance of vast areas outside of a large 
remote site. The UAVs will be equipped with sensors that will detect 
the adversary earlier, and deny them the luxury of being able to pre-
stage attackers and equipment and initiate an attack at a time that is 
advantageous to them. The UAVs will also be used to improve combat 
situational awareness should the site come under attack. One of the 
threats seen almost every day in the news is the large vehicle bomb, 
lending credibility to our need to defeat it. A new type of affordable 
($300/ft) vehicle barrier has been deployed at one site, and is being 
installed at a second. What makes this barrier unique is its ease of 
installation, and its ability to stop very large vehicles moving at 
highway speeds. We are also in the final stages of deploying remotely 
operated weapons at one of our facilities, before expanding the 
deployment to other sites. These weapons are a formidable barrier for 
the adversary, particularly when deployed with visual obscurants. Not 
only do we expect them to improve our ability to neutralize 
adversaries, but they will also improve the survivability of protective 
forces in fire fights and situations where an adversary might use 
lethal chemicals. Our future plans call for assisted targeting to be 
integrated into these weapons, and we are hopeful that this will 
eventually lead to manpower savings by proving that an operator can 
control more than one weapon. We believe that the expanded application 
of security technologies, such as those just described, will be 
critical to the successful mitigation of the evolving and increasingly 
capable threats we will face in the future.
    A third set of initiatives addresses our need to consolidate our 
inventories of special nuclear materials. Our successes in 
consolidating significant quantities of special nuclear materials have 
typically been limited to facility closure programs, such as at the 
Rocky Flats Environmental Technology Site. While we still need special 
nuclear materials at some sites to accomplish ongoing national security 
missions, both the amount of materials needed and the number of 
locations where they are needed have substantially decreased since the 
days of the Cold War when our production facilities were building our 
nuclear deterrent. Protecting these materials is among our most 
difficult security challenges, but it is also one of our most important 
missions, since the consequences of their loss are unacceptable. We can 
greatly reduce the difficulty, risk, and costs associated with 
protecting this material if we can consolidate that which we cannot 
safely and properly eliminate. This has become an increasingly 
important consideration with the increased difficulty and costs 
associated with defending against the elevated threats described in the 
current Design Basis Threat. Since reduction and consolidation of 
special nuclear materials has perhaps the greatest potential impact on 
our future protection requirements and programs, we have identified 
seven separate initiatives related to this subject. These initiatives 
range in scope from developing plans for terminating the use of a 
reactor to altering the configuration of the Department's weapons 
complex. This group of initiatives addresses the essential challenges 
we face in our efforts to reduce and consolidate our special nuclear 
materials inventories and to accurately assess the threats to these 
materials,

 Sandia Pulsed Reactor. This initiative involves completion of the 
        Sandia Pulsed Reactor's mission and removal of the special 
        nuclear material (reactor core) from Sandia National 
        Laboratories-New Mexico.
      To enhance the reactor core's physical protection, Sandia has 
        disassembled it and placed it in special protected storage 
        until needed to support essential testing. The reactor will be 
        re-assembled and used for a period of approximately one year to 
        support testing and to qualify theoretical models and 
        simulation methods that will eliminate future needs for the 
        pulsed reactor. Upon successful completion of the test series, 
        the reactor material will be returned to a secure storage 
        condition that greatly reduces the security risks and cost. The 
        testing and modeling work is currently planned to support the 
        cool down and completion of reactor defueling by March 2007.
 Highly Enriched Uranium Materials Facility (HEUMF). This initiative 
        is to expedite the construction of the HEUMF project, which 
        will provide a new state-of-the-art storage facility for highly 
        enriched uranium now stored at various locations at the Y-12 
        National Security Complex. Its design will incorporate a robust 
        denial strategy that includes passive design features to 
        address the DOE Design Basis Threat Policy. Goals of completing 
        facility construction and readiness activities by April 2008 
        and relocating existing material from current locations into 
        the new facility by September 2009 will greatly enhance the 
        security of highly enriched uranium within the United States 
        and decrease long term operating and material safeguarding 
        costs at Y-12.
      The primary facility construction contract was awarded on 
        schedule on August 27, 2004. Construction is currently 9% 
        complete, including site preparation. While construction is 
        approximately two months behind schedule due to above normal 
        rainfall and unanticipated soil conditions, it is expected that 
        the original schedule will be met. Associated activities, such 
        as storage container assessment and characterization and 
        material movement and reduction of material in current storage 
        areas are underway.
 Resolve Materials Criteria for Acceptance at Long-Term Storage Sites. 
        This initiative addresses the need to resolve situations where 
        nuclear materials are being stored at sites only because they 
        do not meet the acceptance criteria at longer-term storage 
        sites. Increases in the Department's Design Basis Threat 
        necessitate creative approaches to maintain strong security for 
        the Department's special nuclear material assets in a cost-
        effective manner.
      A Nuclear Material Consolidation Task Team studied the issue of 
        materials consolidation with a focus on reducing the number of 
        nuclear facilities that need high-level protection and reducing 
        the number of potential terrorist targets. A draft report was 
        issued in December 2004. The report identifies and prioritizes 
        candidate materials for consolidation using a set of defined 
        criteria which address security impact, schedule, cost, and 
        programmatic use. The report also provides recommendations for 
        implementation in both the near, mid, and long term. To 
        formally institutionalize this important effort and to cut 
        across programmatic lines, a multi-program senior-level 
        steering group, under the direction of the Secretary's Senior 
        Policy Advisor for National Security Matters, will provide 
        guidance and recommendations to the Secretary on nuclear 
        material consolidation issues.
 Weapons Complex Review. This initiative involves reviewing the 
        requirements for the weapons complex for the next 20 years in 
        light of the size of the stockpile, the new Design Basis 
        Threat, and the opportunities for consolidation, with the goal 
        in mind of reducing the footprint of the complex to the minimum 
        needed to support long-term national security missions.
      The Secretary of Energy Advisory Board (SEAB) chartered a Task 
        Force which consists of five members who were briefed by 
        members of the Department of Defense, National Security Council 
        and NNSA Program Offices in February. The Task Force has 
        visited most of the weapons complex facilities and will 
        complete their tour by mid-April. Once the study is complete 
        and consolidation opportunities are identified, we anticipate 
        that political (e.g., involving moving material between states) 
        and programmatic (e.g., construction) barriers will remain to 
        be confronted.
 Down-blend Large Quantities of Highly Enriched Uranium (HEU) to make 
        it unattractive as a terrorist target. The goal of this 
        initiative is to determine whether, via the early disposition 
        and down-blending of up to 100 metric tons of HEU currently 
        stored at the Y-12 National Security Complex, we could 
        strengthen the security of existing HEU operations and storage 
        at that facility.
      Review results recommended a course of action to increase the 
        security of remaining HEU and promote the President's 
        nonproliferation objectives. The review recommended that a 
        substantial quantity of HEU be removed from any future use in 
        nuclear warheads. This is in addition to the 174 metric tons of 
        HEU declared in 1994 to be in excess of national security 
        needs. The NNSA Administrator endorsed the recommendations of 
        the study and directed coordination with the Departments of 
        Defense and State.
 Design Basis Threat (DBT) Reexamination. This initiative reexamined 
        the May 2003 DBT and the supporting intelligence data to ensure 
        currency in relationship to the changing threat.
      Actions on this initiative are complete. The DBT was reexamined, 
        changes were recommended, and on October 18, 2004, the Deputy 
        Secretary approved DOE Order 470.3, ``Design Basis Threat (DBT) 
        Policy'' for implementation. In conjunction with the DBT 
        revision, we revised the Adversary Capabilities List to reflect 
        the most current intelligence information regarding the 
        observed and postulated capabilities (e.g., weapons, equipment, 
        tactics, etc.) of the adversary. Although this initiative is 
        complete, follow-on activities through April 2005 are focused 
        on conducting the Site Assistance Visits mentioned previously 
        to provide sites with technology and protective force tactical 
        options to address the requirements of the October 2004 DBT 
        Policy. I will discuss the Design Basis Threat and its impact 
        on protection strategies and systems in more detail later in 
        this testimony.
 Removal of Category I/II special nuclear materials (SNM) from TA-18. 
        The object of this initiative is to relocate programmatic SNM 
        from Los Alamos National Laboratory's (LANL) Technical Area -18 
        to the Device Assembly Facility (DAF) at the Nevada Test Site.
      Implementation of this initiative is in progress. On March 31, 
        2004, NNSA directed the initial shipment of LANL TA-18 
        programmatic SNM to the DAF ahead of the previously scheduled 
        date of March 2006. Three shipments of programmatic materials 
        were completed as of December 2004. Approximately seven 
        shipments are planned for FY2005. NNSA currently projects that 
        approximately 50% of the TA-18 programmatic SNM will be moved 
        to the DAF by March 2006 and 90% by the end of fiscal year 
        2007. Programmatic SNM needed by NNSA to maintain mission 
        continuity, especially to support training for Emergency 
        Response, will remain at LANL in other storage locations.
    The final set of initiatives concern our security human capital. Of 
all the components of our protection systems, the human component is 
the most critical, and the performance of our people will largely 
determine the success or failure of our protection efforts. When we 
speak of security personnel in this context we refer to two groups of 
people: the people who develop, implement, maintain, and oversee our 
security programs; and the protective force personnel who are on the 
ground 24/7 protecting our assets. The robustness of our protection 
programs depend largely on the abilities and performance of these two 
groups of people. Three of our security initiatives deal with 
strengthening our security human capital. They include efforts to 
implement the recommendations of the Chiles Commission (regarding 
management of security expertise in the NNSA) within the NNSA and 
possibly throughout the entire Department. In addition, the initiatives 
also address options for protective force configuration and management, 
with special emphasis on determining the best approach for creating an 
elite force dedicated to protecting our most critical sites.

 Implement Chiles Report recommendations. The Chiles Report focused on 
        the NNSA nuclear weapons complex and recommended several 
        actions to resolve impending human capital shortfalls in 
        safeguards and security and related disciplines. Specific 
        recommendations involved: developing and executing a 
        comprehensive human capital management program; improving the 
        training, qualifications, and stature of the workforce; 
        reengaging in national markets to hire security professionals; 
        instituting a long-term practice of security staff rotation; 
        identifying options for accelerating the security clearance 
        process; improving security information flow; revising the NNSA 
        Safeguards and Security Strategic Plan; identifying specific 
        budget support and tracking recommendation progress.
      NNSA is actively pursing implementation of this initiative. For 
        example, to address human capital management, workforce 
        analysis methodologies and protocols--were--piloted at the 
        Pantex Site Office. Five professional development data 
        assessments were completed at the Pantex Site Office, Y-12 Site 
        Office, Sandia Site Office, Nevada Site Office and the NNSA 
        Service Center. This same assessment is also planned for the 
        Los Alamos Site Office. NNSA is partnering with the DOE 
        National Training Center to provide centralized training for 
        safeguards and security professionals to meet qualification 
        standards established for each safeguards and security 
        functional area. Additionally, NNSA has developed a web portal 
        to improve security information flow, implemented a process for 
        rotating security management positions between headquarters and 
        the field, and began recruiting for an Intern Program.
 Examine the Applicability of the Chiles Report recommendations to the 
        Department. This initiative calls for an examination of the 
        Chiles Report recommendations--which were addressed to the 
        NNSA--to determine their applicability and appropriateness to 
        enhance security human capital and training programs throughout 
        the Department.
      The human resource challenges facing the Department were 
        identified previously and analyzed in the context of the 
        President's Human Capital Management Plan. Efforts have been 
        underway at our National Training Center to promote skills 
        development in identified critical areas through on-going 
        Professional Development Program activities. The first four 
        recommendations of the Chiles Report are being implemented 
        through activities at the National Training Center and through 
        the Human Capital Management Plans developed by my 
        organization, the Office of Security and Safety Performance 
        Assurance, and by the Under Secretary for Energy, Science, and 
        Environment. Concerns regarding the lengthy clearance process 
        are being addressed through ongoing implementation of the 
        approved action plan entitled ``Options for Accelerating the 
        Security Clearance Process in the Department of Energy'' signed 
        by the former Deputy Secretary on January 7, 2005. My 
        organization addressed security communications concerns 
        following the completion of a Communications Study Report last 
        July, and a DOE 25-Year Strategic Security Plan is pending 
        review and approval by the Under Secretaries.
 Review Options for the Protective Force. This initiative directs the 
        examination of existing protective force organizational 
        structures (including existing contract mechanisms) to 
        determine changes needed to develop an elite protective force. 
        The ultimate goal is to transform the protective forces that 
        guard our most critical national security assets into elite 
        units, trained and equipped for advanced tactical operations, 
        and comparable in capability to the nation's elite military 
        units.
      Actions on this initiative are complete. This review was 
        completed and a final report containing recommendations was 
        provided to Senior DOE Management. A joint memorandum from SSA 
        and NNSA was submitted to the former Deputy Secretary in 
        January of this year, recommending that those actions that 
        could be initiated within the current force structure be 
        approved. The Deputy Secretary directed immediate 
        implementation, which is now ongoing. Follow-on activities 
        continue relative to implementation of the identified options 
        resulting from the review.
    Mr. Chairman and members of the Subcommittee, we have made 
significant progress in our efforts over the past several years to 
improve our protection systems. The security initiatives I have just 
outlined, and the ongoing and planned actions, represent a sizeable 
effort and significant commitment of resources by the Department aimed 
at addressing past security concerns and materially enhancing our 
present and future protection postures. Our work to implement many of 
these initiatives continues, and in some cases will continue for 
several more years. I believe that the progress we have made to date in 
implementing these far-reaching initiatives, while significant, will 
pale in comparison to the benefits that will accrue to our protection 
programs when the initiatives are fully realized.
                      ongoing security challenges
    The job of adequately protecting the Department's national security 
assets is an immense undertaking. While we are aggressively pursuing 
actions to address known deficiencies and improve the robustness of our 
protection systems, we recognize that we have a lot more to do.
    As evidenced by our need for the security initiatives and other 
previously described enhancement activities, we continue to experience 
problems associated with both management systems and program 
implementation. Our independent oversight organization has indicated 
for years that many local line management feedback and improvement 
mechanisms, such as Federal security survey programs and contractor 
self-assessment programs, were not sufficiently comprehensive or 
adequately performance based to effectively detect and correct all 
existing protection program deficiencies. This is verified by problems 
we found at sites such as Hanford, Oak Ridge National Laboratory, 
Sandia National Laboratories-New Mexico, Y-12, and the Nevada Test 
Site. These problems, which included such things as poor protective 
force tactical performance, deficient nuclear material control and 
accountability programs, and inadequate classified document controls, 
should have been identified and corrected by local line management 
feedback mechanisms before we found them during our inspections. I must 
acknowledge, however, that once we identified problems at these sites 
the local line managers were responsive in taking action to correct 
them. Our Independent Oversight organization similarly reported slow 
progress in implementing Integrated Safeguards and Security Management 
processes, and we have continued to experience other protection system 
problems that are directly related to inadequate line management 
oversight, attention, and accountability.
    For example, in the past few years we experienced several highly 
publicized incidents involving the loss of keys or key cards affording 
access to buildings or rooms within security areas at a few of our 
facilities. Although there is no indication that these losses resulted 
in compromise of classified information or other security assets, they 
are disturbing nonetheless. A review of lock and key programs revealed 
that management attention to these programs was largely absent. As a 
result, there were too many spare keys, no strict accountability for 
all keys, and inadequate accountability/security training for lock and 
key program personnel and key custodians. These incidents were among 
the motivations behind our initiative to transition to a keyless 
security environment at some facilities.
    Another recent problem involved control and accountability of 
Classified Removable Electronic Media (CREM)--computer floppy disks and 
such. As I am sure the members of the subcommittee are aware, last year 
the Department discovered that we had some deficiencies in our 
procedures and practices for handling and protecting the classified 
information contained on CREM. An incident at Los Alamos National 
Laboratory--which subsequent DOE and FBI investigations determined did 
not involve the loss of CREM--raised questions about accountability 
systems and control procedures for handling CREM. Even though our 
Independent Oversight organization had been reporting conditions that 
could lead to such an incident, local line managers in many cases 
failed to give sufficient attention to this matter. While we 
acknowledged the obvious fact that incidents such as this can occur, we 
do not concede that they must inevitably occur. We simply will not 
tolerate continued incidents of this nature. In order to ensure that 
conditions that would allow a similar incident to occur do not exist 
anywhere in the Department, the Department's senior management took a 
series of aggressive, even unprecedented actions. For the first time in 
the Department's history they ordered a complete cessation of all 
classified operations involving accountable CREM. Facilities were not 
allowed to resume those operations until they fully complied with a set 
of restart protocols, whose key aspects included:

 Ensuring and certifying that all employees who handle accountable 
        CREM receive training in proper handling procedures and have 
        reviewed information regarding the incidents at Los Alamos.
 Conducting a 100% physical inventory of all accountable CREM on hand 
        and reconciling that physical inventory with baseline inventory 
        records.
 Implementing strict requirements and procedures for the storage of 
        CREM (pertaining to approved repositories, keeping repositories 
        locked except when removing or replacing CREM, use of security 
        seals on repositories, etc).
 Limiting access to each repository containing accountable CREM to one 
        Custodian and one Alternate Custodian, and establishing and 
        performance testing formal checkout processes for authorized 
        users to obtain accountable CREM from a Custodian or Alternate.
 Conducting weekly physical inventories of all accountable CREM, and 
        reconciling the inventories with accountability records.
 Establishing procedures which ensure that accountable CREM is 
        destroyed only by approved DOE destruction procedures and which 
        assure that accountable CREM is reproduced only if authorized 
        by the specifically appointed Federal authority.
 Ensuring that a local CREM validation team independently verifies, 
        using performance testing, the implementation and effectiveness 
        of all restart protocol requirements.
    The former Deputy Secretary, designated by the Secretary, was the 
only person who could authorize a facility to resume operations with 
accountable CREM, once they satisfied the restart protocols. All of our 
facilities have satisfied the stringent requirements and have resumed 
operations with accountable CREM.
    Following this process, my Office of Independent Oversight and 
Performance Assurance sent teams of experts to our major facilities to 
perform additional independent validations, to make sure that that the 
restart protocol requirements were fully and effectively implemented. 
Various problems were observed during this validation step. For 
example, the Nevada Site Office/Nevada Test Site needs to establish a 
centralized accountability system to improve efficiency; Los Alamos 
required a lengthy period to achieve restart of classified operations 
and the quality of their revised procedures still requires validation.
    As evidenced by these unprecedented measures, we are serious about 
protecting our classified information and about ensuring that 
additional incidents involving the protection of CREM do not occur at 
any of our facilities. While our intended move to a diskless desktop 
classified computing environment will largely eliminate the potential 
for such incidents, the use of CREM will be common for at least the 
next several years, and we will maintain strict enforcement and 
oversight of our current requirements for handling CREM.
    As a final example of our experiences with insufficient line 
management attention to security programs, let me address the results 
of our Review of NNSA's Federal Line Management Oversight of Security 
Operations. Our Office of Independent Oversight and Performance 
Assurance conducted this review at the direction of the Secretary. Data 
collection methodologies included reviews of the results of other 
recent studies that had examined this issue in whole or in part. These 
included Independent Oversight reports, the Chiles and (draft) Mies 
Reports, and the reports of internal focus groups studying various 
security-related Departmental management challenges. The review 
identified or confirmed a number of issues that reflect significant 
weaknesses affecting the performance of line management oversight 
responsibilities. These include:

 NNSA has insufficient personnel resources and expertise assigned, 
        particularly at site offices, to effectively conduct the 
        quantity and quality of oversight activities necessary to 
        reliably determine or assure the effectiveness of site 
        safeguards and security programs. The general aspects of the 
        shortage of security expertise at appropriate locations in NNSA 
        are multi-faceted, involving work force demographics, 
        recruitment efforts, training and education opportunities, 
        career path opportunities, and resistance to geographical 
        relocation. The specific problem at NNSA site offices, where it 
        currently has the greatest impact on security oversight, is 
        manifested in two ways: in the numbers of security 
        professionals available and in the skill mixes represented by 
        currently assigned personnel.
 NNSA site office survey programs are not sufficiently effective in 
        assessing the adequacy or effectiveness of site safeguards and 
        security programs. Surveys are a primary oversight tool 
        available to the site offices. Many survey programs are not 
        effectively or reliably achieving their primary goal, which is 
        to accurately determine the effectiveness of site safeguards 
        and security programs.
 NNSA does not consistently apply or enforce appropriate corrective 
        action program requirements on site contractors. DOE has 
        specific requirements for the corrective action process that is 
        to be applied to all formal findings assessed against 
        safeguards and security programs by Federal oversight 
        activities. NNSA oversight responsibilities are an integral 
        part of that process, but in common practice, this process is 
        often not fully invoked or enforced by the NNSA site offices.
 NNSA has not effectively taken advantage of the opportunity to use 
        award fees and performance incentives to spur intended results 
        in safeguards and security program performance. Site offices 
        have generally been ineffective in appropriately emphasizing 
        security through contractor performance incentives and in 
        formulating performance indicators that are successful in 
        achieving the intended results.
    These issues have all been identified through internal oversight 
activities and/or through the efforts of independent teams commissioned 
by NNSA. DOE, including NNSA, managers have initiated the following 
significant actions to address these issues and to improve Federal line 
management oversight of NNSA security operations.

 DOE, including NNSA, is taking steps to address shortages in security 
        manpower resources. As part of the security initiatives 
        announced in May 2004, the Secretary of Energy directed NNSA to 
        implement the recommendations contained in the Chiles Report, 
        several of which deal with (security-related) human capital 
        management. NNSA actions associated with this initiative were 
        discussed above.
 NNSA has initiated actions to address the education and training 
        needs of its Federal security workforce, including those 
        specifically applicable to oversight responsibilities. NNSA is 
        working closely with SSA's National Training Center to expand 
        the course offerings in the Professional Development Program to 
        encompass identified NNSA needs, including curricula in 
        leadership and management development, incumbent training in 
        safeguards and security technical disciplines, and training and 
        orientation for security interns. In an immediate action to 
        expand the experience level of security professionals, NNSA has 
        implemented a rotation program to afford security professionals 
        in the field the opportunity to work at headquarters and 
        security professionals at headquarters the opportunity to work 
        at field sites. At present, two individuals are participating 
        in this program.
 DOE, including NNSA, is taking positive steps to clarify and 
        strengthen Federal oversight responsibilities at various 
        management levels. Draft DOE Policy 226.1, DOE Oversight, and a 
        corresponding DOE Order are currently in the review process. 
        They are intended to clarify and assign oversight 
        responsibilities, including those of headquarters 
        organizations. NNSA is currently implementing a Defense Nuclear 
        Security Performance Assessment Program that integrates Federal 
        line management oversight activities. In furtherance of this 
        objective, NNSA has recently established an Office of 
        Performance Assurance to head this effort.
 NNSA has increased its efforts to reorient day-to-day oversight of 
        contractor security operations. Senior managers are involved in 
        an effort to alter the previous philosophy of telling the 
        contractor the ultimate goal (what to do) and allowing the 
        contractor to decide how to reach the goal (how to do it). 
        While avoiding actions that might stifle contractor initiative, 
        NNSA is encouraging site office personnel to focus more 
        attention on how contractors are performing security operations 
        and to provide more input to contractors regarding preferred 
        methods of operation.
    Our review concluded that while these deficiencies in line 
management, and their underlying conditions, exist and have been 
adversely affecting NNSA's ability to exercise adequate line management 
oversight of security operations, the problems are known to NNSA and 
the Department, including NNSA, has initiated actions to address them. 
While solutions to these issues are being pursued, some of those 
solutions--such as increasing the security workforce and implementing 
necessary training and education programs--will take several years to 
implement fully, and will require the sustained support of DOE, 
including NNSA, senior managers.
    We also acknowledge that, while protection programs at our sites 
are generally effective overall, potentially significant lapses in 
protection program implementation do sometimes occur at our NNSA sites 
as well as at sites under the purview of the Under Secretary for 
Energy, Science, and Environment (ESE). For example, at Oak Ridge 
National Laboratory (an ESE site) portions of the protection system 
lacked the defense-in-depth that we require, and the site relies on an 
agreement with a neighboring site for special response team (i.e., 
offensive combative) capabilities. Our most recent Independent 
Oversight inspection at the Hanford site (ESE) found that the 
protective force needed to improve its tactical training, planning, and 
skills, and that some local human reliability program processes 
required reexamination. Since that inspection, the Hanford site has 
implemented corrective actions designed to correct these deficiencies.
    Our three most recent Independent Oversight inspections at NNSA 
sites (Sandia National Laboratories-New Mexico, Y-12, and Nevada Test 
Site) identified some common implementation problems, including 
insufficient frequency of large scale force-on-force performance 
testing/exercises and inadequate weapons and equipment to fully deal 
with today's threat (e.g., armored vehicles, anti-armor weapons, 
weapons with high rates of fire). Additionally, the Nevada Test Site 
exhibited deficiencies in protective force operations and material 
control and accountability procedures; Sandia exhibited deficiencies in 
physical security systems and in handling classified matter; and Y-12 
exhibited significant deficiencies in most major protection program 
elements. Since those deficiencies were identified, line managers have 
been responsive and the sites have been engaged in corrective actions. 
Our Independent Oversight organization is currently inspecting Sandia-
New Mexico to determine its current protection system status and the 
progress it has made in addressing deficiencies. It will inspect Y-12 
in May and June and the Nevada Test Site in July and August of this 
year.
    When implementation problems such as those described do occur, we 
do not ignore them. We employ a formal corrective action and validation 
process to ensure that identified problems are fixed, and in cases 
where a deficiency results in a potential vulnerability, immediate 
compensatory measures are required. I would also like to point out that 
as we continue to make Department-wide progress on the security 
initiatives discussed above and in our system upgrades in response to 
the requirements of our current Design Basis Threat, we expect that our 
protection programs will become more robust and the historically 
troublesome protection elements (e.g., locks and keys, CREM, training, 
etc.) will be addressed through these efforts (specifically through the 
application of technologies or other solutions).
    The last security challenge I would like to discuss is perhaps our 
major challenge--implementing the requirements of our new Design Basis 
Threat. After a prolonged development process, the Department issued a 
revised DBT in May of 2003. In May of 2004--in response to internal 
concerns, Congressional concerns regarding the robustness of the threat 
portrayed in the DBT relative to that portrayed in the Defense 
Intelligence Agency's Postulated Threat, and questions raised by the 
General Accountability Office--the Secretary directed the NNSA 
Administrator, the Director of the Office of Intelligence, and me to 
reexamine the May 2003 DBT and its supporting intelligence data to 
ensure that it was still current in relationship to the changing 
threat. We formed a task team comprised of individuals with the 
expertise necessary to assist in conducting the review, and the results 
of that effort were reported to the Secretary in late August 2004. In 
October 2004 the former Secretary approved a revised DBT, one which 
included some significant changes from the previous DBT. Since the DBT 
is classified, I cannot discuss some of its specific provisions in this 
open forum, but I will discuss some of its generic attributes and 
comment on some of the differences between the current and previous 
versions.
    Our DBT policy is intended to provide consistent and appropriate 
safeguards and security system performance specifications that 
Departmental elements must meet. It delineates a graded threat scale 
based on the sensitivity of the asset being protected and the potential 
consequences of asset loss. Assets are categorized into one of four 
``Threat Levels'' based on the general consequences of their loss or 
destruction, or the possible impact of their loss or destruction on the 
health and safety of employees, the public, and the environment. The 
protection requirements for those assets are graded in a commensurate 
manner. Performance-based standards must be met to protect Threat Level 
1 (most critical), 2, and 3 facilities and assets. Threat Level 4 (non-
critical) facilities and assets must meet compliance-based standards.
    The most significant changes reflected in the current (October 
2004) DBT are:

 The policy now exists as a formal DOE Order. Procedures requiring a 
        formal annual review have been issued.
 The policy is more concise, and understandable, and the number of 
        Threat Levels applying to various assets and facilities have 
        been combined and simplified. Threats associated with 
        improvised nuclear devices and radiological, biological, and 
        chemical sabotage have been folded into the Threat Levels.
 The terrorist numbers and attributes associated with the threat 
        levels were increased to reflect current intelligence and 
        geopolitical assessments.
    In December 2004 the former Deputy Secretary directed that all DBT 
implementation plans be revised to ensure that all requirements 
contained in the October 2004 DBT are met no later than the end of FY 
2008. The NNSA Administrator has expressed his full support and 
intention to develop and execute implementation plans on schedule. 
However, full implementation of the DBT on schedule is a major task 
posing many difficulties. For example:

 At some facilities it will require fundamental departures from 
        institutionalized protection strategies, such as shifting from 
        a containment strategy (preventing an adversary from escaping 
        with target material) to a denial strategy (preventing an 
        adversary from reaching target material).
 The postulated impacts of the DBT mandate that the Department 
        consider aggressive material consolidation efforts, which will 
        likely encounter operational, programmatic, and political 
        opposition.
 The adversary numbers and capabilities postulated in the DBT allow 
        the adversary much greater tactical flexibility, causing 
        significant planning and response difficulties for current 
        security systems.
 The appropriate security technology solutions are still being 
        identified and developed. Consequently, developing accurate 
        budget estimates is difficult at this time.
 Sources of funding and alternatives to current operations that will 
        be necessary to implement the DBT are still being explored.
    We are fully cognizant of these difficulties and are prepared to 
deal with them. We believe that the current initiatives that will 
contribute most to our DBT implementation efforts are: increasing the 
use of security technologies, implementing the elite protective force 
concept at select facilities, and consolidating our special nuclear 
materials to the greatest practical degree. As mentioned earlier, our 
Site Assistance Visit effort--now underway and almost complete--is 
intended to apply our best technological, analytical, and tactical 
expertise to assist our most critical facilities in identifying 
security technology applications and innovative protective force 
strategies that will enable them to effectively and efficiently meet 
the requirements of the DBT. So far we are encouraged by the progress 
resulting from these visits. Individual sites will have to follow up 
that effort with detailed vulnerability analyses to finalize the 
designs and compute the costs of their proposed protection system 
upgrades. Ultimately, we will have to devise ways to integrate new 
security technologies and new protective force weapons and tactics with 
operational needs and safety concerns.
                               conclusion
    In closing, we believe the Department of Energy under the 
leadership of Secretary Bodman is, and will continue to, actively 
pursue initiatives that will improve the capabilities of our security 
systems and procedures, and we have forcefully responded when elements 
of those systems have not performed according to our expectations. We 
will continue seek innovative, effective, and efficient methods, as 
well as the resources, to foster the changes in our security programs 
and practices that are necessary to effectively counter the evolving 
threat.
    Thank you.

    Mr. Whitfield. Mr. Podonsky, thank you very much for your 
opening statement.
    As is the custom with oversight investigations, we will 
have 10 minutes of questions for each of the members of the 
panel, and I will start off here.
    Administrator Brooks, since 2000, we have talked about 
moving Category I and Category II nuclear materials out of 
Technical Area 18 at Los Alamos and move it out to Nevada. And 
there have been all sorts of delays, but I notice in your 
testimony this morning that you made the comment that you do 
intend to have Category I and II material out of TA 18 by the 
end of the year. Is that still your commitment?
    Mr. Brooks. That is correct. Before the Los Alamos stand-
down, we were slated to complete removal by September 30. I now 
believe, as a result of the delays imposed by the stand-down, 
that it will be mid-November, about a 6-week slip.
    We will have half of the material in Nevada by the end of 
the year. That is actually slightly earlier than we expected. 
The rest of the material will be moved from TA 18 to another 
location in Los Alamos temporarily, and then will be moved to 
Nevada over the next couple of years. So we are--we will have 
all Category I and II material out, middle of November.
    Mr. Whitfield. But out of the site in a couple of years.
    Mr. Brooks. Out of Los Alamos in a couple of years, but out 
of the vulnerable site at TA 18 by November.
    Mr. Whitfield. By the end of the year.
    Mr. Brooks. Yes, sir.
    Mr. Whitfield. Okay. Good.
    Now I would like to also review basically the relationship 
between the respective offices of the two of you gentlemen. Of 
course, Mr. Podonsky, you work for DOE?
    Mr. Podonsky. Yes, sir.
    Mr. Whitfield. And you are in charge of independent 
oversight at all DOE and NNSA sites.
    Mr. Podonsky. That's correct, sir.
    Mr. Whitfield. And, Ambassador Brooks, you are in charge of 
NNSA nuclear weapons labs and productionsites, including Los 
Alamos.
    Mr. Brooks. Correct.
    Mr. Whitfield. Now, we have this memo dated December 2, 
2003, which was signed by former Secretary Abraham, which 
established the Office of Security and Safety Performance 
Oversight, and I ask unanimous consent to enter this document 
into the record.
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    Mr. Whitfield. This memo clearly authorizes Mr. Podonsky's 
office to continue the independent oversight of NNSA's 
safeguard and security, cybersecurity, environment, safety and 
health, and emergency management programs.
    Now, Mr. Brooks, you indicated in your testimony that you 
will create your own Office of Performance Assurance to conduct 
security oversight at NNSA sites. Have you created this office 
with the intention of replacing the work of Mr. Podonsky, or 
what was your goal there?
    Mr. Brooks. No, not at all. And part of the problem I have 
had is finding the right name for this office that doesn't 
allow that misperception.
    Mr. Podonsky provides independent oversight. He provides it 
on behalf of the Secretary. He also provides it on behalf of 
me. We have an agreement that if I see a need for an outside 
observation, I can call on Mr. Podonsky; and I have done that 
from time to time. But Mr. Podonsky comes in at periodic 
intervals, and he is the verification to the Secretary that we 
are doing our job.
    I don't want to replace that. I need that independent 
oversight.
    What I did 2 years ago was to centralize authority and 
responsibility in site offices. That authority and 
responsibility was diffused before then. And to emphasize the 
importance of those site offices, I didn't provide periodic 
supervision from headquarters. And in two areas that was a 
mistake--nuclear safety, unrelated to the subject of this 
hearing, and security.
    So what I want to do is provide a routine interaction 
between my office that the site manager can call on when they 
need help and that will make sure I know that when Mr. Podonsky 
comes, I don't have to wait the 2 years till his next visit to 
make sure that we are performing correctly. It is the 
difference between line supervision, which is my 
responsibility--and this is a tool to aid me in it--and 
independent oversight, which is Mr. Podonsky's. But the 
functions are quite separate.
    Mr. Whitfield. Mr. Podonsky, do you agree with Mr. Brooks' 
assessment of the situation.
    Mr. Podonsky. I agree with how he describes it, and I 
certainly hope that it will be enacted that way.
    My experience, Mr. Chairman, is that this Department does a 
lot of checking on itself without much improvement. I have 
every confidence that what Ambassador Brooks is talking about 
is reasonable and makes sense.
    If I were in Ambassador Brooks' position, I would want to 
know how my sites were performing before independent oversight 
came as well. I just want to make sure we don't fall into the 
same predicament that we have had in past years, where previous 
Secretaries have created what we call ``checkers checking 
checkers.'' That is not a good situation, because we get a lot 
of reports and not a lot of action.
    I don't believe that is the intention, as Ambassador Brooks 
has described the program.
    Mr. Brooks. And I agree with that completely. One of the 
advantages Mr. Podonsky has is that we are both going to be in 
these jobs for the next few years, so we will be sure to make 
sure these get off.
    Mr. Whitfield. I hope that is the case because, as Mr. 
Podonsky just said, we do seem to have a lot of checkers 
checking checkers, and we do need a lot more action. And there 
certainly seem to have been a lot of problems in these 
programs.
    Mr. Brooks, the University of California stated that the 
cost of the stand-down at Los Alamos was around $160 million. 
However, we have an NNSA memorandum dated February 22, 2005, 
from the NNSA's chief financial officer in Albuquerque to the 
Los Alamos site manager, and according to this document, the 
total programmatic cost of the stand-down is about $367 
million.
    I ask unanimous consent to enter this document into the 
record.
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    Mr. Whitfield. It seems the difference between those two 
estimates relates to whether we include indirect costs in the 
estimate.
    Do you think this $367 million estimate from your staff 
represents the actual cost of the stand-down?
    Mr. Brooks. It represents an upper limit.
    There are two points of difference, if I may. This gets 
into a little bit about how we account for costs with our 
contractors. There are two differences, and the application of 
indirect costs is actually the smaller.
    Here is what we do: An individual laboratory is working on 
a project, and they keep a record with a little code of what 
project they are working on. We then take that labor cost, add 
whatever other direct costs, materials, and that is the cost, 
the direct cost of the project. We then apply to that the 
things you need to run a lab--the fire department, the salary 
of the laboratory director--and those are indirect costs.
    There are two differences between the laboratory 
methodology and ours. At our direction, the laboratory kept 
track of the cost of the stand-down. But the way it chose to do 
so was to continue to have people charge to their projects and 
to apply an algorithm that estimated the amount of time that 
was purely stand-down. That is not auditable. It is not done 
with any malicious intent, but it is not auditable. What we did 
is, here is the period of the stand-down; here is what they 
charged to their projects. So that gave us a substantially 
larger direct labor cost.
    Now, the truth is almost certainly somewhere in the middle. 
The laboratory assumes about $119 million of direct labor cost, 
we assume about $200 million direct labor costs, and there is 
no way to allocate between that as to what people would have 
been doing if there had never been a stand-down, because that 
is not the way the records were kept.
    Then the laboratory chooses to say that indirect cost is 
inappropriate here. We believe that the way we compare cost is 
using indirect cost. So that is the difference. It is an 
accounting difference.
    I believe that the assessment of Mr. Martinez, who is my 
field chief financial officer, is correct, but it is 
conservatively correct. In other words, it is an auditable 
accounting standard assessment of what can be documented. The 
actual-cost money that was spent only because of the stand-down 
is almost certainly less, but because there is no way to 
determine how much less, we do not accept the laboratory's--I 
would call it ``estimate.'' Dr. Nanos would probably not use 
that same word.
    The real cost of the stand-down, however, is not just 
monetary; it is what has happened to the programs. And we are 
working very hard with the laboratory to minimize that.
    But I stand by that report. That's a good report.
    Mr. Whitfield. That the costs are significant.
    Mr. Brooks. The costs are significant.
    Mr. Whitfield.  My time has expired here, but I notice that 
you did reduce the fees to the University of California. Do you 
feel like the University of California should pay some of these 
costs caused by the stand-down?
    Mr. Brooks. The determination of whether these are 
allowable charges to the government is a formal determination 
that will be made by the contracting officer. In the report you 
referred to, the chief field financial officer offers an 
opinion that the bulk of these costs are allowable charges to 
the government.
    Let me give you an analogy. If we at our lab go build 
something, anything, and it costs more than we expected, the 
government is responsible for that extra cost. We may decide to 
reduce the fee, we may decide to hire somebody else to run the 
lab, but we cannot change the rules of the contract in the 
middle. This may be an analogous situation.
    Our recourse, first, is to reduce the fee, which as you 
know I have done; and second, this is a performance issue which 
will be taken account in the upcoming competition. I believe 
those are likely to be our recourse. But I want to be very 
careful not to prejudge the independent determination of the 
contracting officer who is responsible for deciding whether 
these are allowable costs.
    Mr. Whitfield. Thank you very much.
    Mr. Stupak.
    Mr. Stupak. If I may pick up right there, stand-down cost 
is not addressed at all in the contracts?
    Mr. Brooks. No, and that is what makes it more complex. But 
some of the stand-down costs can be regarded as the necessary 
cost of doing business.
    I don't want to suggest that this is a completely black-
and-white determination, and I don't want to suggest we have 
made a final judgment, but I also don't want to mislead the 
committee. Two independent looks have suggested that under the 
contract, these are probably going to be allowable costs.
    Mr. Stupak. How do you ever change the culture, then, if 
the security, the lax security, the quality assurance, then the 
stand-down costs.
    Not only do we have the loss of work being done at the lab, 
but then you also have other costs for the cost of the stand-
down. And you say, Well, that is part of doing business with 
the government, so the taxpayer has to foot the bill, while the 
University of California, that oversees this--how do you ever 
change this culture that you have to do things right or there 
is going to be some responsibility? And in this case, these 
costs should be borne by the university and not the taxpayer.
    Mr. Brooks. Well, first of all, sir, I think you change the 
culture on the ground in the lab. I believe that the very 
strong actions Dr. Nanos took to hold people accountable, 
including terminations and reductions, I think that the time 
spent in reviewing procedures and working on culture, those are 
going to pay off.
    In essence, we have spent $300 plus million to make the lab 
better. Now, if we screw it up and the lab isn't better as a 
result of this, then that has been an enormous waste of time 
and energy. And we will not know for some period of time.
    In the stand-down, for example, the laboratory uncovered 
some 350 issues that had to be corrected before they started. 
They uncovered another 3,000 issues of long-term improvement 
that are being built into this. If we follow through on that, 
we will have----
    Mr. Stupak. If you go in looking for 300 and you come out 
with 3,000 more, what does that say about the quality of the 
security and the quality assurance and quality control at the 
lab? It says, it is pretty ridiculous, to put it mildly; and 
then these costs are just passed back to the taxpayer.
    See, you are going to get 3,000 again when you go back down 
there in the next stand-down, and I hope you don't have another 
one, if we're not doing anything; if we're not holding anyone 
responsible. I guess that's the culture I'm looking for.
    Mr. Brooks. Yes, sir, and I understand.
    Mr. Stupak. The only one being held responsible is the U.S. 
taxpayer, because they are paying for all these indirect and 
direct costs. Aren't we really paying the University of 
California for their expertise so we don't have these stand-
downs and all these costs to the taxpayers and so that labs can 
run.
    Mr. Brooks. Well, we are certainly paying them to manage 
the lab. We are certainly unhappy with their management, which 
is the reason for the significant reduction in fee. The 
university, as you know, operates the laboratory in a way that 
it neither benefits nor pays. That is, the fee it receives is 
plowed back into the lab and it does not go into its general 
area.
    I believe there's no question at all that the university 
understands that it screwed up and that it is actively trying 
to make sure that the problems are really fixed.
    Mr. Stupak. But from where we sit, this is my tenth year on 
this oversight subcommittee, and I have heard this 10 years 
now, that we think they really understand, they really get it 
this time.
    At Los Alamos, I have been there. When I said we should go 
see these, I have been there because of the problems there. I 
go there and they have these real strict procedures, and I 
think Dr. Nanos has really tried to put some strict procedures 
in there, but if the overseer, the University of California 
here, is going to have this relaxed attitude and there is no 
real cost to them because they can just put that cost back off 
to the taxpayer, I just think we are going to be here for 
another 10 years going over the same thing and hearing from you 
or someone else in your position that I think they really 
understand. I just don't see it.
    Mr. Brooks. The one difference, sir, I will submit, is the 
competition. I think that for the first time, as a result of 
past problems----
    Mr. Stupak. You bet.
    Mr. Brooks. We have made a decision, and we are working 
very hard to make sure this is a genuine, not a pro forma, 
competition; and I believe that is having a salutary effect.
    Mr. Stupak. I hope when you do these competitive bids you 
put in there that if there is a stand-down, you are going to be 
responsible for part of the stand-down, because we are relying 
upon your expertise so that we don't have these stand-downs 
that cause extra money.
    You used the analogy, if we are building a project there 
and the project costs more money than what we anticipate, the 
government is responsible for it. Well, we pay to run these 
labs at a certain price. If it is going to cost more because of 
lack of quality control, I don't think the taxpayer should have 
to pay that price. I think the University of California should, 
or whatever is managing it.
    In my opening, I mentioned that I wanted to ask each of you 
about some areas that you feel we need to address and address 
now. So if you could generally do that--I don't want you to say 
anything classified; we will have that discussion later.
    But, Mr. Podonsky, what do you think are the three or four 
most important issues we need to address and address them now? 
Is it the classified removal of electronic media? Is it the 
theft of nuclear material? What do you think our top three or 
four things are, just generally?
    Mr. Podonsky. Generally, Congressman, it is the 
consolidation of nuclear material that needs to be addressed 
now, and as rapidly as possible, as I said in my opening 
statement. It is the deployment of technology. We are in the 
21st century, and we are still depending on more guards, gates 
and guns than technology. And so we definitely need to do that.
    As Ambassador Brooks and I also mentioned, we are moving in 
that direction. We are just not moving as quickly as we would 
prefer to move.
    The improvement of the existing security force, we talk 
about an elite force in former Secretary Abraham's initiatives; 
well, we need to establish a paramilitary group for our most 
valuable assets and Category I facilities. We need to continue 
to improve our physical security at many of our sites. And all 
this is rolled up into our DBT.
    Last, I would say, Mr. Congressman, that Federal management 
and oversight of the sites needs to be improved. And as you 
have heard, Ambassador Brooks intends to do that at NNSA sites, 
and we need to do that also at the DOE sites.
    Mr. Stupak. Let me hit two points. You have mentioned 
consolidation and technology improvements. I was a little 
concerned when you said we're going to move this stuff out of, 
was it TA 18 there, and it is going to go up to Nevada. Part of 
it, we are going to take it out of the building it is in now 
and put it in another building; and then later on it will get 
shipped up to Nevada. Why is that taking so long? Why don't you 
just move it all to Nevada? Why are we hopping from spot to 
spot.
    Mr. Podonsky. I think that would with better answered by 
the program, which would be Ambassador Brooks.
    Mr. Stupak. Okay. Because when you say ``consolidation 
now,'' what do you mean by ``now''? This year.
    Mr. Podonsky. In my capacity for the Secretary and for 
Ambassador Brooks, looking at it independently, I don't have to 
worry about running the programs, so I can look at it and say, 
Why aren't we moving the material now?
    Like the Sandia Pulsed Reactor, without getting into 
classified now, sure, we ought to just go ahead and terminate 
that activity. But, clearly, the program has other requirements 
that I'm not familiar with, and that would have to be 
Ambassador Brooks' decision.
    But it seems to me, after a number of years in this agency 
and overseeing it, that we just don't move rapidly enough, for 
reasons that are not always clear. Some of them are legitimate 
and some of them, separate from Ambassador Brooks, I think are 
just more excuses as to why we don't do what we should be 
doing.
    Mr. Stupak. So TA-18, if I remember correctly, we have been 
talking about moving this for 10 years.
    Mr. Podonsky. That is correct. But, I would also say, and I 
was there in 2000 when it was first brought up with former 
Secretary Richardson. At least now they are doing something 
about it. Back then, it was still just talk.
    Mr. Stupak. You guys are starting to sound like the EPA. 
They told me the other day: Soon. Government moves slowly but 
should not move that slowly.
    Ambassador Brooks, could you give us a little bit more on 
why this consolidation, why can't we just give it up to Nevada?
    Mr. Brooks. A couple of reasons. One is that there is a 
safety reason; that is packing and moving special nuclear 
material takes time. We have a couple of shipments that have 
already gone; we have several shipments that are going. But the 
problems of Los Alamos were, in my view, much more severe in 
the safety than in the security area.
    And we are not going to do high-hazard operations other 
than in a safe manner. Second, there are programmatic issues. 
We need--this material exists in part because of some 
criticality training that we are going to have to ultimately 
replicate in Nevada.
    We are trying to balance the requirements to get it out of 
TA-18, still maintain the program and do everything safely. And 
what we have come up with is to move out of TA-18 by the end of 
the year to an area where there is already a good deal of 
material and a very robust amount of security--I can talk a 
little bit more about that in the closed session--while 
continuing to move it as rapidly, as safely to Nevada.
    So, even if I could, if I could press a button now and have 
it all in Nevada, probably will not want to do it, I need some 
of it to continue the criticality experiments that are 
important for our emergency management.
    So what I am doing is putting it in a safer place in the 
interim until I can get the capability at Nevada.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Whitfield. Dr. Burgess, you are recognized for 10 
minutes.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Podonsky, in your testimony, you discussed the 
importance of local Department of Energy site management to 
identify and correct security problems on their own. However, 
you also point out that local management has not always been up 
to the task. Los Alamos has had problems with managing their 
classified data inventories for many years.
    Why do you think that Los Alamos, at the site level, has 
been unable to effectively identify and correct management 
weaknesses before the problems occur?
    Mr. Podonsky. I do not think that Los Alamos has a corner 
on that market of not being able to identify all of the 
problems at the site. What has traditionally happened, in my 
experience, in the Department is that the site offices have not 
always had the depth of capability among their Federal staff to 
go out and do the work that, for example, that my independent 
oversight office does.
    And because of restrictions on the number of people that 
they can afford to have at these sites in the past, I think 
what we term oversight, I think oversight is a misnomer; it is 
really managing and directing the M&O contracts is what we need 
to recognize. And there needs to be more of that.
    I cannot give you a specific, Congressman, as to why they 
did not have a more robust management in the direction, but we 
have confidence, my oversight group now, has confidence in the 
team that Ambassador Brooks has there onsite. We also have 
confidence, and that is not to impugn people who have served in 
those capacities previously, but there are various degrees of 
talent that the Federal Government is able to attract and keep, 
and I think Ambassador Brooks has got some of the best that he 
can find for the management of that site right now Mr. Burgess. 
Ambassador Brooks, is the problem primarily one of funding?
    Mr. Brooks. No. The problem is the things I tried to allude 
to in my statement. Los Alamos is a good example, because, for 
years, we have not developed security as a career progression. 
We have not built the cadre of very, very experienced and 
knowledgeable security professionals. We have some, but we do 
not have enough. And that is what Admiral Chiles has helped us 
to see for the long term.
    So the people who are doing this at the Los Alamos site 
office, there were not enough of them. There are more now, and 
they were not as experienced as you would like. Second, there 
was the leadership issue within that group which no longer 
exists. Third, there has been a tendency at many of my site 
offices, including, I think, Los Alamos, to defer to the 
security people for security and to worry about all of the 
other things the site office had to do.
    And my site managers now understand they cannot do that, 
that security is too important. And, fourth, in my 
responsibility of supervising the site offices, I did not have 
as good a mechanism to make sure that they were doing their 
job, and that is the purpose of this new office.
    So it was all of the things that I alluded to in my 
statement; it was not an issue of funding. It was an issue of 
organization. We had, before 2002, an extremely--when you look 
back, there are a number of past reports--an extremely 
fragmented organization in the Department of Energy. It was 
very difficult to tell who is in charge.
    And one of the things we have tried to correct is to make 
it clear that I am in charge, and under me, my site manager. 
You know, in all areas, we are still working to make sure that 
that concept is fully understood, but it is clearly the right 
way to run the complex.
    Mr. Burgess. Thank you. Mr. Podonsky, are there examples of 
other sites in the weapons complex where line management has 
been effective in identifying security matters before they 
emerge? Have we done it right in other places?
    Mr. Podonsky. From our perspective, yes, sir. Pantex is an 
excellent example.
    Mr. Burgess. A Texas facility, I might point out Mr. 
Podonsky. I do notice that, Congressman, yes. But, and 
considering the mission that is there, that is also quite 
heartening to know that they have such a strong site management 
program.
    Mr. Brooks. If I may, Congressman. It is the same sized 
program. So that is why it is not primarily a question of 
resources; it is a question of leadership and training. And we 
are trying to use those standards at Pantex as a model for the 
rest of my sites.
    Mr. Burgess. Well, Ambassador Brooks, do you feel that you 
are going to be able to convince Los Alamos and other sites to 
improve line management, attention to security matters, before 
they become further security problems?
    Mr. Brooks. On the Federal side, I am absolutely convinced. 
And I have no reason to doubt it on the contractor side. There 
are always going to be problems. I want to make it clear. There 
are always going to be problems. This is a huge complex 
enterprise. The point is, are the Federal officials responsible 
for providing the supervision finding those problems in time to 
make sure that they are corrected? And that is what I am--that 
is what we are going to be able to do.
    Mr. Burgess. Thank you, Mr. Chairman. I will yield back my 
time.
    Mr. Whitfield. Mr. Inslee, you are recognized for 10 
minutes.
    Mr. Inslee. Thank you.
    Mr. Brooks, I wanted to ask you some questions about the 
Hanford site. If you can update us on consolidation efforts 
there and plutonium transfer efforts, I would be appreciative.
    Mr. Brooks. Hanford is not one of my sites, sir. I am going 
to have to take a pass.
    Glenn, are you in a position to address that? We may need 
to answer that for the record, sir. We have the wrong people at 
the table.
    Mr. Podonsky. The Hanford site falls under the under 
secretary for ESE. I believe that nomination is up and has not 
been confirmed yet. So I do not have the information on that.
    Mr. Inslee. We will talk to some other folks.
    What--I was reading an article about a year ago talking 
about security in a broad context. It was suggesting reference 
to the GAO report that precipitated a lot of our concerns. And 
the GAO report, as I recall it, basically suggested that there 
needed to be a new bar, a new standard, if you will, for 
security, that an original sort of standard was to prevent an 
intruder from seizing a weapon or plutonium and leaving the 
site and using it for nefarious purposes somewhere else, and 
that we really needed a system that would prevent intrusion and 
the ability to detonate and utilize in some way onsite.
    How would you characterize efforts to meet that standard? 
Met? Unmet? Are there dates you can discuss with us in that 
regard?
    Mr. Brooks. Yes, sir. I will be able to say a little bit 
more about this in closed session. But we operationalize that 
through the so-called design basis threat. And you are 
absolutelycorrect. Before September 11, all of us assumed that 
the threat was somebody coming to steal highly enriched uranium 
or plutonium to take it some place else and use it. And 
therefore, we could afford to let them get to the vault as long 
as we could kill them on the way out. And so if we could 
contain them, and that was the term we used, containment, that 
was an adequate security standard.
    After 9/11 we realized that there were people who were 
willing to die in order to cause harm to the United States, and 
it is hard to think of something that would have a greater 
effect than some kind of nuclear detonation. So we needed to 
move to a situation where we prevented people from ever 
reaching the material.
    That turns out to be a much more demanding problem. And it 
depends very much on how many people you think you are 
defending against and what kind of equipment they--we have made 
two judgments, one in May 2003 and then another in October of 
last year, about how many people.
    And that is associated, May 2003, we made a determination, 
and we will be fully compliant with that standard by the end of 
next year.
    The new, more demanding standard that we implemented in 
October 2004, the Department has established, it is an 
extremely conservative standard. I will talk about that in the 
closed session. Well, the Department has established the end of 
2008.
    The site assistance visits that Mr. Podonsky talked about 
are partly an attempt to figure out how we tailor to each site 
the best way to meet that threat. That may depend on money in 
the 2007 budget; that, I cannot quite know where it is yet. So 
we are on schedule and fully funded to meet the threat 
established in 2003. We have a schedule and a plan, but we 
still do not have enough fidelity to know exactly what it will 
cost for the more robust threat established in October of last 
year.
    Mr. Inslee. Now, maybe this is an unanswerable question, 
but that just seems to be a time period that just is something 
I cannot accept just sitting here. I do not have to do the hard 
work like you do, but if someone said I wanted to prevent 
terrorists from coming into this hearing room and eliminating 
some Members of Congress, they said we are going to finish the 
job at the end of 2008, I would not find that acceptable.
    I think, look, there has got to be some mechanical ability 
to achieve this goal at an earlier period. Are budgetary 
problems a problem, really, getting this job done before----
    Mr. Brooks. Not all.
    Mr. Inslee. Let me finish my question. If you can try to 
characterize to us, if we said that is just not acceptable, to 
the demands of the public, and I do not think it is, what does 
it take to accelerate completion of that project?
    Mr. Brooks. A couple of things. First, we have, in some 
cases, put compensatory measures, which are manpower intensive, 
so that you have some confidence, but not enough confidence, 
before.
    The answer, I think the honest answer, is, I do not know 
what it takes to accelerate 2008, because I do not know what it 
takes to do 2008. We established this standard, and we are now 
trying to gather the information through the site assistance 
visits. We will have inputs from each site this summer, and 
then we will see, as we prepare the 2007 budget, what has to be 
done.
    At some sites, I believe it will actually be relatively 
easily. The highly enriched uranium material facility at Y-12, 
for example, was designed so that it was less sensitive to the 
size of the attacking force.
    Nevada test site, the assembly facility, was designed so it 
is less sensitive to the size of the attacking force. And so we 
will be there probably relatively easy.
    Other places, I think, are going to prove more complex. So 
I do not know. In some cases, I do not think it is money, 
because, in some cases, it takes a certain amount of time to 
build things. Let's take the Y-12 facility. If you went to Y-12 
now, you would see a bunch of buildings, and in there are quote 
vaults.
    But when you dug into it, you would find those vaults are 
just rooms, because they were built in a different era. And 
they are not located where you would locate them if you were 
going to have a quote vault; they are located where it was 
convenient to build. So they are on the outside of buildings 
closest to the fence.
    Well, you have obviously got to fix that. And the way to 
fix it is to consolidate it into a very highly secure building. 
We are building that building, but it is going to take some 
years to build it. And to a certain limit, you cannot build a 
building faster by throwing more money at it. It takes what it 
takes.
    Mr. Inslee. So if somehow you got a Congressional White 
House mandate to accelerate that by 12 months, what would you 
do?
    Mr. Brooks. I would buy more guards, and I would do it with 
compensatory measures. It would be inefficient. But, that is 
sort of what we are doing now. We have established a regime 
where we do certain things with very heavy additional 
protective force, because we do not yet have the material in 
this secure building. In the short term, the only thing you can 
do is throw people at it.
    In the longer term, you throw design and technology at it, 
and that is the solution we are working toward. And I would 
welcome the chance to explore this in closed session. I do want 
to stress, the design basis threat that we decided to impose on 
ourselves in October 2004 is an extremely conservative threat, 
more conservative than is being used elsewhere in the 
Government.
    So I do want to assure you that we have set ourselves a 
real stretch goal in being able to defend against this threat, 
and it is a threat that I believe is unlikely to be mounted, 
but it is--the consequences are so severe that we have chosen 
to establish that as our standard.
    Mr. Inslee. Thank you.
    Mr. Podonsky. Congressman, if I might.
    You should not leave the hearing thinking that the 
Department is not aggressively moving out to the denial 
strategy. The previous design basis threat of 2003, some sites 
are actually very close to completion in a lot of their 
efforts, and that is a continuation on to 2004. As Ambassador 
Brooks said, the next one is, in fact, a stretch.
    But we all share the same concerns. And that is why we have 
these SAVs taking place, so that we can help the sites find the 
strategies, find the technology, and we can get it implemented 
as rapidly as possible. The 2008 date is when everybody has to 
be compliant. That does not mean they wait until September 
2008.
    Mr. Inslee. Got you. Thank you.
    Mr. Whitfield. The gentleman from Oregon, Mr. Walden, who 
is vice chairman of this subcommittee, is recognized for 10 
minutes.
    Mr. Walden. Thank you very much, Mr. Chairman. Gentlemen, I 
think you have heard pretty clearly from my colleagues a great 
frustration at the cost of the standdown, the delay in 
implementing some of these requirements and security efforts. I 
know you have been working on it.
    But it just seems to me that, if the University of 
California was hired to do the job and they did not do it and 
it resulted in a standdown that now costs taxpayers maybe 
upwards of $360 or $20 or $160 million and, I think I am 
hearing today, there is no penalty that can probably be 
extracted against them in the existing contract, something is 
broken.
    And I know--I am sure--I know Chairman Barton feels this 
way, I know I do, that the University of California should have 
to pay something in this process. It is outrageous, when you 
look at the costs that we are absorbing to improve homeland 
security. And we have got a contractor that is supposed to be 
providing all of this, and you all have to step in and shut 
everything down.
    What do the people do during this multi-month period of the 
standdown?
    Mr. Brooks. What--first, I do need to correct one thing. 
While it is almost certain that I would have stepped in and 
shut it down, the laboratory director who was the University of 
California employee is the one who imposed the standdown. And 
it to his credit that he recognized the problem.
    Mr. Walden. I understand it was such a mess they had to 
shut it down. The duration, though, is the issue. Why does it 
take this long to figure out the problem?
    Mr. Brooks. It took the duration, which I believe surprised 
both the laboratory director and me--we thought it would be 
much closer to half that--was because, as you dig in to trying 
to do a very, very thorough job, we found that the problems 
within the organization were deeper and wider spread.
    And so we made a decision, which I made, that, having gone 
this way, we were going to do it right, that is, we were going 
to find and fix the problems, because we did not want to go 
through this pain and this cost and not be able to say, we are 
going to make the lab better at the end.
    Mr. Walden. I understand that. That is where you identify 
the 350 issues, followed by 3,000 issues. But that tells me, as 
a manager, and I own my own business and have for 19 years, 
that someone was not watching the store.
    Mr. Brooks. No question of that, sir.
    Mr. Walden. That somebody--okay, so a few people maybe were 
let go or penalized, but the big somebody, the University of 
California, is not suffering, are they?
    Mr. Brooks. The university is suffering, I would submit to 
you, in three areas. One is the monetary penalty that I imposed 
as part of----
    Mr. Walden. The reduction in fees?
    Mr. Brooks. The reduction in fees.
    Mr. Walden. But you testified those come right back to the 
lab?
    Mr. Brooks. The university has traditionally taken its fee 
and used it for its own supervisory actions, and then anything 
that was left over has been poured back to the lab. So the 
university has never, in the 60 years that it has run the lab, 
used the fees for any purpose other than the lab.
    Mr. Walden. How much was that reduction?
    Mr. Brooks. The reduction was $5 million, sir. There was a 
$3 million penalty. The full----
    Mr. Walden. How much of that was related to the standdown?
    Mr. Brooks. $3 million was directly related to the 
standdown and was imposed punitively. An additional $2 million 
was the result of the grade of unsatisfactory in operations.
    Mr. Walden. So like 1 percent, 1.5 percent on the loss. 
What is the total fee?
    Mr. Brooks. The total fee that they would have been 
eligible for was $8.8 million. They ended up at $3 million.
    Mr. Walden. Okay.
    Mr. Brooks. So that is the first area.
    Second, I believe that the university, which takes great 
pride in its reputation, has suffered an intangible but very 
real punishment. And, third, we are doing a competition. And 
the record, if the university chooses to compete, their record 
in this, their successes in areas and their failures will be 
part of the competition.
    Mr. Walden. Is there not still lacking a final 
determination on the reasonableness of the duration of the 
standdown in relation to its impact on the overall allowability 
of the costs?
    Mr. Brooks. Yes, sir. That is what I was trying to make 
clear in response to an earlier question; that is a 
determination that is made by the contracting officer. I have 
been urged by the chairman to be personally involved in that. 
And I intend to. So there is a determination yet to be made.
    But I do not want to mislead the committee; you are holding 
a report from probably our most knowledgeable individual in the 
field, who has offered an opinion that that determination will 
find that these are allowable costs. And so I did not----
    Mr. Walden. You do not want to prejudice that?
    Mr. Brooks. I do not want to prejudice it, but I do not 
want to mislead the committee.
    Mr. Walden. That is--I have a list of DOE security 
initiatives that was presented at a hearing before this 
subcommittee last May. I would like to ask unanimous consent 
that this list be entered into the record, Mr. Chairman. I 
believe the staff has a copy of that.
    [The information referred to follows:]
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    Mr. Walden. The list, last 14 security initiatives, and I 
understand that Mr. Podonsky has the responsibility to track 
the progress of these initiatives for the Department. And I 
understand from your testimony, sir, that the Department has 
fallen behind on several of these initiatives. Could you just 
apprise the committee, go through this list and identify for us 
these initiatives that have not been implemented and why?
    Mr. Podonsky. Yes, sir.
    Mr. Walden. The key ones, at least.
    Mr. Podonsky. My office was given the responsibility to 
track the progress. And that is done monthly. Each of the 
initiatives were assigned to a program office by separate 
memorandum, either from the former Deputy Secretary, Kyle 
McSlarrow, or from Ambassador Brooks to his organizations.
    And they report that progress--the program offices report 
the progress to us. Specifically, if we divided them up into 
four categories: information security, new technologies, 
consolidation of material and then strengthening human capital.
    To answer your question specifically, the cyber enhancement 
is lagging.
    Mr. Walden. That is No. 2 on this last?
    Mr. Podonsky. That is No. 2. The diskless desktop computing 
was lagging up until last month. That has been moving out quite 
nicely now. The keyless technology, that is in progress.
    The Blue Sky Commission, that deserves a special note. This 
is something that both Ambassador Brooks and I have a 
responsibility for. But we both agreed, setting up a 
commission, while it is something that we would like to do long 
term, it has been difficult to find the people to serve on the 
commission.
    But that did not stop us from looking at existing 
technologies and getting some of theme deployed to the field as 
we speak right now in pilot programs. The other lagging ones--
--
    Mr. Brooks. The weapons complex review?
    Mr. Podonsky. The weapons complex review is one that just 
recently got underway, but it still has a due date or report to 
the Congress of April 2005.
    Mr. Walden. Are you going to meet that?
    Mr. Brooks. Yes, sir, we are going to meet it with a verbal 
report, with a final written report. We had more trouble than I 
expected to get the right people on that committee. It is an 
external review.
    Mr. Walden. I see.
    Mr. Podonsky. The other one is the long-term storage. That 
is a complex matter.
    Mr. Walden. Which number is that, sir?
    Mr. Brooks. Eight.
    Mr. Walden. Okay.
    Mr. Podonsky. The problem with that is finding the material 
at different sites that no longer need to use the material at 
that site, and where do you send that material?
    As I said in my opening remarks and in my written 
testimony, that involves more than just the Department of 
Energy.
    Mr. Walden. Would this involve, for example, the 
universities elsewhere around the country that may have little 
amounts?
    Mr. Brooks. No, sir. There is a program to deal with that. 
That is moving fairly well.
    No, here is the problem here. It is primarily a plutonium 
problem. We have plutonium that we do not need and we need to 
get rid of. And we do not have a fully identified path to 
eliminate it.
    Some of it we are going turn into mixed oxide fuel under a 
separate program. But some of it is not suitable for that. We 
are barred from bringing that plutonium into the State of South 
Carolina for a complex reason that I can get into if you need 
to.
    So now you are in a situation--without having a technically 
adequate path out, which we are still developing. So you have a 
situation where you would like to move material out of where it 
is to consolidate it in a separate place, but you do not have a 
separate place to consolidate it to.
    So we are looking, for example, now, at a facility in Idaho 
built for another purpose. We are looking at whether that could 
be a place to consolidate material pending disposition.
    For highly enriched uranium, it is much easier. You have a 
place to put that at Y-12. There the problem is that the highly 
enriched uranium that is around the complex we are largely 
using, and it is a question of when we can stop.
    But, on plutonium, the issue is finding a place to put this 
stuff until we can figure out its long-term disposition, which 
is a technically difficult and somewhat emotional issue.
    Mr. Walden. Thank you very much, gentlemen. I appreciate 
the work you are doing and your candor today.
    Mr. Whitfield. Mrs. Blackburn, you are recognized for 10 
minutes.
    Mrs. Blackburn. Thank you, Mr. Chairman. And thank you to 
our panel for being here. We appreciate this today.
    We talked a lot about Los Alamos. But I have got a 
question. I want to ask you about Crystal River and about the 
Crystal River complex. And I think that probably many of my 
colleagues were really stunned to learn about the problems that 
occurred there and are curious to know whether or not, despite 
officials saying that they followed all of the proper 
regulations, if the worker verification program, which has been 
used in Florida, was followed with this, because the problem 
there was those who had gained unlawful entry to our country 
were working in that facility. And I am pulling this from a 
March 12 article that was in the Washington Times.
    And what I would like to know is, do the current Department 
of Energy or NRC regulations require that contractors use the 
worker verification program? Because you all talk--have talked 
extensively this morning about increasing training, about the 
need for human capital security, the need to secure materials. 
But if you do not know who it is, if they are using false 
documentation, if they are using a false identity, how do you 
know who it is that you are allowing access?
    So do you require them to use the worker verification 
program?
    Mr. Brooks. I cannot answer with respect to the Nuclear 
Regulatory Commissionsites, which I believe is the subject of 
that story. For us, because we generally require security 
clearances, we are in a much different world, because we 
therefore have to--first, we have to have U.S. Citizens, and 
second, we have the investigative requirements that are 
associated with a Q clearance.
    So for most of the people at our sites, this does not 
become an issue because of the requirement for U.S. 
Citizenship. With regard to what the NRC does, I will be happy 
to try to get you an answer for the record, ma'am.
    Mrs. Blackburn. That is okay. That is fine. So what you are 
saying is that the NNSA has safeguards?
    Mr. Brooks. Yes.
    Mrs. Blackburn. That would prevent anything from occurring 
like it did at the NRC site?
    Mr. Brooks. I believe so. I will--but I have not studied 
the particular occurrence. I will look at that. If that is not 
right, I will get you a corrected answer for the record. But 
certainly, we have safeguards that ensure that we only have 
U.S. Citizens who have been investigated and granted the proper 
clearance. That is an extremely important part of our security 
approach.
    Mrs. Blackburn. Wonderful. Thank you, sir.
    I have another question for you. You have mentioned, when 
we talk about the security initiatives in the new DBT--and this 
kind of goes in with what Mr. Walden was just speaking to you 
about--you have talked about having a tracking progress and 
having routine interactions. But do you have a time line that 
would implement the security initiatives and the new DBT? I am 
not seeing a document or have not been able to find a document 
that says this is our time line, these are our benchmarks. You 
alluded to, possibly, that there may be something.
    Mr. Brooks. We have, for the May 2003 DBT, the end of 
fiscal year 2006, we monitor progress. A couple of my sites are 
essentially there. For the October 2004 further enhancements, 
we have set ourselves a goal of the end of 2008. We do not have 
a detailed schedule yet, that is what we will be developing 
this summer as a result of the site assistance visit process 
that Mr. Podonsky was describing.
    Mrs. Blackburn. Okay. And GAO has said that you all lack a 
formal program management structure and need to implement 
guidance for directing the work of its contractors. What 
specific actions are you taking to address that situation?
    Mr. Brooks. The former deputy secretary required, in 
response partly to that and partly to just general concern, we 
establish a formal program management structure. It is in its 
early stages. And I think the jury is still out on whether what 
we have done so far is adequate. We are very good at project 
management. I mean, we can point to you some examples where we 
have not been, but, basically, we have the structure and the 
procedures and the training and the qualification to be good at 
project management.
    But to manage overall programs, we have in NNSA I think 
that we have about 54 programs, and to look at each of those, 
we do annual reviews by me, we have--the Department has a 
series of milestones under a system called the jewel. But we 
were also looking at a quarterly snapshot of each program for 
the deputy secretary to make sure that we are starting to 
manage programs as overall entities and not just focusing on 
individual projects?
    Mrs. Blackburn. Are you using the PMA or the PART, the 
rating tools there?
    Mr. Brooks. I use PART. The President's Management Agenda 
was very important to the previous Secretary and the deputy. 
And there is every evidence they will be even more important to 
the current Secretary, who has a very strong management 
background.
    I use PART. The Department uses PART as required by the 
Office of Management and Budget. In addition, I have 
established PART as the internal NNSA review tool. So when I go 
through my annual reviews, we do a PART assessment for every 
program every year, even though the Office of Management and 
Budget will only have us assess two or three of them.
    Our initial experience with that was that our internal 
assessments were rosier than OMB. More recently, we have been 
coming much closer. And what you do is you look at what you 
said, and then when OMB gives you their grade, you look at the 
comparison and what you want to make sure is that your self 
assessment is honest.
    If it is honest, you will come out pretty close to the OMB 
grade. For the last cycle, I came out very close on the four 
projects.
    Mrs. Blackburn. Well, if you are going through 54 programs 
a year; you are a busy man.
    Mr. Brooks. Yes, ma'am.
    Mrs. Blackburn. Mr. Podonsky, a couple of questions. The Y-
12 plant in Oak Ridge, which is in Tennessee, my State, the 
initial plans there were for an underground storage facility. 
And this was changed to an above-ground facility.
    So if you will please address why that was changed to an 
above-ground facility, why DOE approved it and--even though the 
inspector general said it was going to cost more and be less 
secure.
    Mr. Podonsky. I would like to answer that. But since the 
facility is actually owned by Master Brooks, I would suggest 
that he would give you those answers as to why those decisions 
were made. I can only give you a view of how robust we think 
the plans are.
    Mrs. Blackburn. Okay.
    Mr. Brooks. There were two competing designs, neither of 
them were actually underground. The water table at Y-12 makes 
it difficult to do a true underground facility. So there were 
two competing designs, one which has been referred to as the 
berm design, essentially had an earth cover, and one that did 
not.
    Those were not the only differences between the designs. I 
can get into a little more detail in closed session. But the 
design had--the designs had a number of features that differed. 
We concluded that the so-called bermed design was not likely. 
First, it was subject to single-point failure. That is, there 
is a particular vulnerability that if people were able to 
penetrate, we did not have a good back-up.
    And, second, we were concerned that it was very sensitive 
to assumptions about the size of the attacking force. That is a 
big deal. Because, as we can talk about more in closed session, 
when I talk about changes in the design basis threat, one of 
those changes is how large the attacking force we assume is. So 
what you would like is a facility that does not depend on the 
intelligence judgment of the day about how big the force was.
    We, therefore, shifted to the second design. We could have 
added to that a berm. We chose not to. We chose not to because 
our assessment was that it was adequate, that it would cost 
another--I think the estimate is $35 million in design costs 
and delay construction 2 years to redesign it.
    And it sounds easy to just put dirt over it, but when you 
put 22 feet of dirt on top of a building, it turns out that you 
have to build a different building. And that the improvements 
in security did not outweigh the importance of moving forward.
    You know, there are alternate views. The inspector general 
report, and I can--we had an assessment done, I want to be very 
precise on what was done, by Sandia, which convinced me that 
the design we have was adequate. Sandia was not asked to say in 
a perfect world what they would do.
    And my guess is, they would have wanted some kind of 
combined design. But we concluded that the design we had was 
adequate--it was superior to the alternate design for reasons 
unrelated to the amount of earth--and that it was more 
important to get on with building it. That is the judgment we 
made.
    Mrs. Blackburn. Thank you.
    Mr. Whitfield. Thank you.
    Thank you very much for participating in this panel this 
morning. We appreciate the testimony of both of you. I would 
make one other comment.
    Ambassador Brooks, when do you anticipate that you will 
make this final determination on the reasonableness of the 
duration of the standdown in relation to its impact on the 
overall allowability of the cost of the contract?
    Mr. Brooks. I am sorry, sir. I actually do not know the 
answer to that. I will let your staff know and provide it 
formally for the record. But I am not sure of the schedule on 
which the contracting officer is slated to make it. I just 
suddenly realized on the way over here that I did not know the 
answer to that. I did not have time to check.
    Mr. Whitfield. We look forward to hearing from you on that. 
I would also ask you unanimous consent to enter into the record 
a letter that we sent to Secretary Bodman just recently on 
these 14 initiatives that were initiated by Secretary Abraham 
in which we asked the Secretary to give us an update on all 14 
of those initiatives.
    And so I expect that the two of you may be involved in that 
as well. We look forward to your response to that letter as 
well.
    We are going to reconvene after our next two panels. We 
have two more panels. We have an individual on each panel, but 
we will be reconvening in room 2218 as soon as we finish the 
other two panels. So thank you all. We look forward to seeing 
you upstairs.
    At this time, I would like to call our next witness Mr. 
Nanos, Peter Nanos, who is the director of the Los Alamos 
National Laboratory.
    And Mr. Nanos, we appreciate your being with us here today. 
As you know, it is the custom of the Oversight and 
Investigations Subcommittee to have witnesses testify under 
oath.
    And I would ask you, do you have any difficulty doing that 
this morning?
    Mr. Nanos. No, sir.
    Mr. Whitfield. Do you wish to have legal counsel with you 
when you testify?
    Mr. Nanos. No, sir.
    Mr. Whitfield. Then if you will stand, I will swear you in.
    [Witness sworn.]
    Mr. Whitfield. Mr. Nanos, thank you very much. And you are 
now under oath. And with that, we would welcome you to give 
your opening statement.

   TESTIMONY OF G. PETE NANOS, DIRECTOR, LOS ALAMOS NATIONAL 
                           LABORATORY

    Mr. Nanos. Thank you, sir. Chairman Whitfield, ranking 
member Stupak, and distinguished members of the committee, 
thank you for the opportunity to appear before you this morning 
to update you on the status of security at Los Alamos.
    My name is Dr. Pete Nanos, and I have served as director of 
the Department of Energy's Los Alamos National Laboratory since 
2003. I came to the laboratory from the Navy where I retired as 
a vice admiral.
    Before I begin, I wanted to thank Chairman Barton and the 
committee for your support of the improvements that we have 
made at the laboratory.
    Congressman Stupak, I would be happy to respond to any 
questions you have today regarding audits conducted by one of 
our contract employees, Dan Brown. We have thoroughly supported 
his investigation and drafting of his white paper, and have 
gone through a lot of detailed analysis of all of the elements 
of that white paper.
    Some of the ones, like welding and QA of plutonium 
fabrication and all, I have been personally involved in. And of 
course, some--we can even talk about the boundaries in the 
closed session of some of the aspects. Because of his clearance 
level, he was not in some cases able to see the whole 
operation. But we can go into that in detail later.
    I want to emphatically state that the employees of Los 
Alamos National Laboratory are dedicated to the national 
security mission of this great Nation, and they take very 
seriously their responsibilities to personally safeguard 
America's secrets.
    The laboratory conducts important work for the Nation, most 
notably ensuring the safety and reliability of the Nation's 
strategic deterrent. Clearly, a component of that mission is 
the need to safeguard the national security information 
entrusted to our care. I am here today to tell you that I 
believe we are doing a good job in security, and I want to 
reaffirm to you our commitment to do even better.
    Los Alamos National Laboratory is a safer, stronger, more 
secure laboratory than when I last addressed this committee. 
The first point I would like to make is that the suspension of 
lab operations in July 2004 was necessary, and the employees 
who were at fault in the security and safety incidents that led 
to the suspension have been held accountable by the laboratory 
and the University of California.
    My decision to suspend laboratory operations was not easy, 
and I would like to spend some time here explaining what led to 
the suspension. At the outset, it is important to note that, 
during the suspension, the laboratory was open and employees 
were required to come to work throughout. No new funds were 
required during this time. We used existing funds.
    I would also like to clarify a little bit on the cost 
issue. I think Ambassador Brooks is entirely right, that the 
estimate that you referred to him, the higher estimate, was an 
upper bound, a very conservative upper bound. Our method of 
bidding costs for our number was based on mutual agreement 
between us and the site manager, in other words the NNSA 
contracting officer.
    And we decided to use an accepted accounting practice of 
determining those costs based on the manager's estimates of 
where people were working, and did not go to the higher cost 
option of introducing thousands of new accounts and a great 
amount of administrative cost. And that was a decision we 
mutually made.
    Also, we, as people started to work on programmatic work 
again, we put their charges on that programmatic work. For 
example, after about a month, approximately two-thirds of our 
labor costs were back on their normal programmatic work. That 
was recognized under our procedure, was not recognized under 
the Albuquerque procedure. So there, clearly, is an opportunity 
to go into great detail on this and satisfy you in that regard.
    During this period, employees did productive work, either 
program work or work related to safety and security in support 
of our mission. Additionally, at no time did we suspend 
activities that were immediately critical to national security 
and/or the continuity of operations, security, and 
environmental compliance and protection.
    Many of you have heard that two major incidents led to my 
decision to suspend operations. The July classified removable 
electronic media or CREM incident, which I will describe 
further below, as well as a safety incident just days later 
where a student's retina was burned by a laser.
    What many people do not know is that these two incidents 
took place against a background of a recent rise in safety and 
security incidents as well as growing correlations showing that 
our employees who were poor safety performers were also--proved 
to be poor in security and compliance.
    Further, I was concerned that the July CREM incident showed 
clear signs of a behavior problem versus any sort of honest 
mistake. Confronted in July with back-to-back cases of seeming 
disregard for basic safety and security rules, I did not have a 
good feel for the safety and security of lab operations, and 
therefore, I had no choice but to suspend all operations at the 
lab.
    During the suspension of operations and the subsequent 
restart, we learned that there were many good reasons to have 
taken the action we did. In partnership with UC, the DOE and 
NNSA, we followed a rigorous restart process. As a matter of 
fact, it was codified in great excruciating detail, and 
conducting that--and the most important thing is that we 
conducted management self-assessments of all of our 
organizations, that identified more than 3,000 issues, ranging 
from safety compliance issues to permitting violations that 
needed to be addressed, including 340 prestart issues that we 
felt had to be addressed before the activities could restart.
    We fixed the 350 prestarts and have created a project to 
implement and track the remaining fixes and changes. We resumed 
operations as quickly as possible with 100 percent of our 
lowest-risk operations, which, by the way, represent 89 percent 
of all lab activities, and as I have previously stated, roughly 
two-thirds of our labor costs were resumed by August 18 and the 
majority of operations up and running by late September, early 
October. Some of our highest-hazard operations did not resume 
until February 2005.
    I want to go back now and focus on the July CREM incident 
for a moment. This incident began when employees were unable to 
locate two barcoded pieces of accountable CREM. As the result 
of independent investigations conducted by the DOE, the FBI and 
a joint scab lab UC investigation, we now know with high 
confidence that the disk never existed and that the incident 
was the result of an unauthorized practice, barcode numbers 
that were entered into our accountability system but never 
affixed to actual media.
    We had no way of knowing this initially, and we were 
further led astray by two employees who falsified an inventory 
sheet incorrectly indicating that the disk had actually existed 
at one point in time.
    We concluded that, although human error and improper action 
were the direct cause of the incident, there were additional 
systemic contributing weaknesses, among them are the sheer size 
and geographic spread of our CREM operations, which included an 
inventory of accountable CREM that exceeded 80,000 pieces at 
its high point. More than 4,500 employees had daily direct 
access to CREM, and classified operations spread over roughly 
40 square miles.
    Upon thorough review of the investigation, I made the 
decision to terminate three employees as a result of their 
involvement in the incident. Additionally, four employees 
received written reprimands and suspension without pay, and I 
removed the division leader from that position and had the 
individual reassigned to nonsupervisory duties.
    My second point is that Los Alamos has made real lasting 
changes in the way we handle CREM that significantly reduce the 
likelihood of future problems. After meting out discipline, I 
turned our attention to completely revamping the classified 
control system to help prevent a recurrence of this incident. 
With concurrence of the University of California, we acted to 
remove all media, to move all media into secure, centralized 
libraries, to establish full-time CREM custodians, and to fund 
expanded classified media lists or diskless computing.
    The major elements of our efforts include the following: 
All accountable CREM has been moved from the hundreds of 
previous locations into one of 20 centralized base libraries. 
Additionally, we established 14 satellite libraries to provide 
secure storage of media, in close proximity to operational work 
areas. All CREM is under the direct ownership of approximately 
40 custodians, a 99 percent reduction compared to the previous 
4,500 employees who had direct access to CREM.
    Trained and certified classified library custodians are 
assigned to each library. They are responsible for checking 
items out and conducting daily transactional inventories to 
ensure classified media is positively accounted for at all 
times. The library custodians are deployed security 
professionals reporting directly to the security division.
    To ensure the libraries maintain a high level of 
performance, we began no-notice inventory inspections. The 
laboratory is pushing hard on line organizations to destroy 
unneeded accountable CREM. We have destroyed over 7,000 items 
in the past 2 months, with many more entering the destruction 
pipeline.
    As of March 4, the lab has 20,074 pieces of CREM and 
expects to further reduce this to less than 2,000 by the end of 
fiscal year 2006, a 97 percent decrease from our earlier high 
point.
    With significant funding support from Congress, we are also 
moving to a diskless environment through the expansion of our 
classified computing network.
    My third and final point this morning is that, thanks to 
significant investments in physical security, the laboratory's 
physical site remains secure from threats.
    As you know, DOE has recently revised their Design Basis 
Threat, which articulates the adversary force size and 
capabilities that we must be able to defend against. We have 
been working literally from September 11, 2001, to 
fundamentally change the security posture for our site.
    An amazing array of upgrades and improvements has been 
made, all for the singular goal of safeguarding the people and 
security interests under our control. I am particularly proud 
to point out that the most recent DOE inspection of the 
protective force performance at TA-18 clearly shows that the 
facility is well defended and the nuclear materials housed 
there are secure.
    The Department has made the decision to relocate the TA-18 
mission and the nuclear materials to Nevada, and we are fully 
committed to making this happen as quickly as possible. 
Nonetheless, I am confident in our ability to defend the site, 
and that confidence is reinforced by DOE assessments that tell 
me we are good and getting better. I personally attended, as an 
observer, the force-on-force exercises last year in this 
regard.
    In conclusion, I want to emphasize that the investments 
made at Los Alamos during the suspension have created a Los 
Alamos that is stronger, safer and more secure. I cannot sit 
here today and tell you that we will never have another safety 
or security incident at Los Alamos, but what I can guarantee is 
that the management at Los Alamos and the University of 
California is doing everything possible to continue the 
improvements to both safety and security.
    We will continue to deliver on our commitment to the safety 
and security of this Nation. I promise you that. Again, thank 
you for allowing me the opportunity to address you. And I would 
be glad to answer any questions you may have for me.
    [The prepared statement of G. Pete Nanos follows:]
  Prepared Statement of G. Pete Nanos, Director, Los Alamos National 
                  Laboratory, U.S. Deartment of Energy
                              introduction
    Mr. Chairman and members of the Committee, thank you for the 
opportunity to discuss the security program at Los Alamos National 
Laboratory. My name is Dr. Pete Nanos and I have served as Director of 
the Department of Energy's Los Alamos National Laboratory since 2003. I 
came to the Laboratory from the Navy where I retired as a Vice Admiral.
    To begin, I want to emphatically state that the employees of Los 
Alamos National Laboratory are dedicated to the national security 
mission of this great nation and they take very seriously their 
responsibilities to personally safeguard America's secrets. Our 
contributions to the safety and security of the American people are 
significant, and we continue to serve on the front lines of the effort 
to build and sustain our collective defense. Clearly a component of 
that mission is the need to safeguard the national security information 
entrusted to our care. I am here today to tell you that I believe we 
are a better Laboratory today as it relates to security, and I want to 
reaffirm to you our commitment to be even better.
    I have spent considerable time since assuming leadership of the 
Laboratory evaluating our strengths and weaknesses and working with the 
University of California to improve the overall direction of the 
Laboratory. As you know, I suspended Laboratory operations last summer. 
This was not an easy decision. I would like to spend some time here 
explaining what led to the suspension of operations. At the outset, it 
is important to note that during the suspension of operations, the 
Laboratory was open and employees were required to come to work 
throughout the entire suspension. During this period, employees did 
productive work related to safety and security, in support of our 
mission. I will get into additional detail on this later in my 
testimony.
    Let me emphasize that at no time did we suspend activities that 
were immediately critical to national security and or the continuity of 
operations, security and environmental compliance and protection.
    Many of you are familiar with the two major incidents that led to 
my decision to suspend operations: the July Classified Removable 
Electronic Media (CREM) incident, which I will describe further below, 
as well as a safety incident just days later where a Lab student's 
retina was burned by a laser due to faulty safety practices. What many 
people do not know is that these two incidents alone did not lead to my 
decision. I would like to provide some additional context, and start by 
noting that my decision was made in close consultation with the 
University of California, the Department of Energy and the National 
Nuclear Security Administration. Prior to these incidents, my 
management team and I were tracking a recent rise in safety and 
security incidents. In addition, we were noting correlations in 
performance in the areas of safety, security, and compliance. Those 
employees who performed poorly appeared to do so in all of these areas. 
The other major factor that concerned me with the July CREM incident is 
that it showed clear signs of a behavior problem. This was in sharp 
contrast to earlier incidents where it was clear that for the most part 
good people who were trying to do the right thing had made honest 
mistakes. Given this backdrop, when I was confronted with back-to-back 
examples of seeming disregard for basic safety and security rules, I 
had serious concerns regarding the security and safety of Laboratory 
operations and therefore, in good conscience, had no choice but to 
suspend all operations at the Laboratory.
    During the suspension of Laboratory operations, and the subsequent 
restart, we learned that there were many good reasons to take the 
actions we did. In partnership with DOE and NNSA, we followed a 
rigorous and strategic process, dividing the entire Laboratory into 
risk levels:

 Risk Level 1, the lowest level, which is general office work;
 Risk Level 2, medium risk, which represents moderate-hazard work such 
        as construction; and
 Risk Level 3, high risk, which includes our high-hazard programmatic 
        work involving CREM and special nuclear materials (SNM).
    We conducted Management Self Assessments of all of our operations, 
and all of our Level 2 and 3 operations had to present their findings 
to a Resumption Review Board (RRB), which was made up of personnel from 
the Laboratory, the National Nuclear Security Administration's Los 
Alamos Site Office, as well as the DOE Office of Assessment who 
observed and assisted in all aspects of the review. For Level 3 work, 
an additional internal review was conducted by a Laboratory Readiness 
Review (LRR) panel, prior to approval by myself, and ultimately 
resumption. The LRR consisted of Laboratory personnel who were from 
outside of the organization being reviewed. The NNSA site office in Los 
Alamos worked very closely with us on all aspects of the restart. We 
resumed operations as quickly as possible, with 100% of our Level 1 
work up and running on August 18, 2004, one month after the suspension 
of operations began, and the majority of operations up and running by 
late September/early October. Some of our highest-hazard operations did 
not resume until February 2005. It is important to note that 89% of the 
Laboratory's activities were classified as Risk Level 1.
    What we found in our assessments validated our decision to suspend 
Laboratory operations. We identified more than 3,000 issues (ranging 
from safety compliance issues to permitting violations) that need to be 
addressed, including 350 ``pre-start'' issues that we felt had to be 
addressed before an activity could restart. We fixed the 350 pre-starts 
and have created an Operational Efficiency Project to implement the 
remaining fixes and changes over the coming years.
    Below, I'd like to spend a few minutes covering the July 2004 
incident, and more importantly, what we have done to correct the 
shortcomings that allowed the incident to occur.
                     the accountable crem incident
    First, and perhaps most importantly, we know with high confidence 
that the disks never existed. Rather, what we had was an issue of 
barcode labels entered into our accountability system but never affixed 
to actual media, which was compounded by the falsification of an 
inventory sheet by two employees indicating that the disks did exist. 
This conclusion is supported by independent investigations completed by 
the DOE and the FBI. Given the identification of the most likely cause, 
we are left with the questions--why did it happen and how did we get 
ourselves into this situation?
    Our analysis of the incident led us to the following conclusions 
regarding the direct causes:

 The direct cause of this incident was placing unattached barcodes 
        into accountability (an unauthorized practice) without 
        confirming their actual use. Simply put, the classified matter 
        custodian issued the barcodes and entered them immediately into 
        the accountability database. Unfortunately, the employee who 
        received the barcodes failed to realize that the barcodes were 
        accountable and should be tracked. The employees subsequently 
        destroyed them without reconciling the discrepancy with the 
        custodian.
 We also missed the opportunity to discover and reconcile the problem 
        in an annual inventory of accountable classified matter 
        conducted in April 2004. This inventory failed to identify the 
        ``missing'' barcodes because the custodians did not properly 
        complete the inventory and subsequently falsified the inventory 
        records. In addition, line managers responsible for the 
        operation failed to ensure the inventory was properly conducted 
        and subsequently verified that the inventory was complete and 
        accurate, and that all items were accounted for. That was 
        clearly not the case.
    In the process of conducting the root cause analysis of the 
incident we reached the conclusion that while human error and improper 
action were the direct causes, there were additional systemic 
weaknesses that contributed to this incident, and that would allow 
similar incidents to occur again:

 The sheer size and geographic spread of accountable CREM operations 
        increased the likelihood of an incident.
     The inventory of accountable CREM exceeded 80,000 pieces at its 
            high point.
     There were over 4,500 employees with daily direct access to the 
            media.
     Our classified operations are widely dispersed, spread over 40 
            square miles.
     The transaction volume is large, with daily movement of 
            classified items between organizations within LANL and 
            throughout the DOE Complex.
 The lack of detailed supporting documents (e.g. checklists and plans) 
        to serve as job aids for employees engaged in classified work 
        activities hindered effective performance.
 Custodians responsible for safeguarding and controlling classified 
        items suffered from a variety of organizational ailments, 
        including:
     Lower job status
     Lack of authority
     Part-time job for many
     Lack of training specific to CREM handling and control
     Lack of support/conflict of interest within their parent 
            organizations
 The absence of a DOE or LANL standard accountability system increased 
        the potential for classified items to ``drop through the 
        cracks'' as they moved between organizations. In March 2004 
        this problem was recognized, and with the concurrence of the 
        University of California, the Laboratory is implementing a 
        single site-wide accountability system.
     the response to the accountable crem incident--holding people 
                              accountable
    In light of what we learned during our inquiry it was necessary to 
take very drastic steps, both in terms of holding people accountable 
for their actions and in changing the classified control program to 
help prevent a recurrence of the incident.
    In terms of personnel actions, three employees had their employment 
terminated as a result of their involvement in this incident. Four 
employees received written reprimands and suspension without pay, 
including the Division leader who was also removed and reassigned to 
non-supervisory duties. All seven employees received administrative 
sanctions in the form of security infractions, which are permanently 
filed in their personnel security records and factor into the DOE's 
decision process for granting continued access to classified 
information. The infractions were issued for causes including:

 Failure to properly conduct classified media inventories and 
        falsification of records;
 Failure to reconcile accountable CREM with inventory records; and
 Management failure to provide adequate oversight.
    The NNSA also exercised its right to hold the University 
accountable for the incident. LANL received an ``unsatisfactory'' 
performance rating in the ``operations'' area of the annual performance 
assessment. As a result, in January, 2005, NNSA withheld 67% of UC 
management fee, with a penalty assessment of $5.8M out of a possible 
$8.7M performance fee pool. This represents the largest DOE-directed 
management fee cut in history.
the response to the accountable crem incident--changing the classified 
                             control system
    It is safe to say that we have learned a great deal from this 
recent incident. After holding people accountable for their actions, we 
turned our attention to completely revamping the classified control 
system to help prevent a recurrence of this incident. With the 
concurrence of the University of California, LANL acted to move all 
media into secure centralized libraries, to establish full-time 
custodians and fund expanded classified media-less computing. The major 
elements of our efforts include the following:

 All accountable CREM has been moved into one of 20 centralized 
        ``base'' libraries. Fourteen ``satellite'' libraries have also 
        been established to provide as-needed secure storage of media 
        in close proximity to operational work areas. These 
        ``satellites'' are each associated with a ``base'' library and 
        are under the strict control of the ``base'' library 
        custodians. The new configuration represents a significant 
        reduction in the number of CREM storage locations across the 
        Laboratory. Where previously CREM was stored in 89 buildings 
        with 733 rooms, the new CREM libraries are housed in 29 
        buildings with 37 rooms. This represents a 95% reduction in the 
        number of rooms.
 Each library was put through a rigorous inspection and certification 
        process prior to commencing operations.
 Trained and certified Classified Library Custodians are assigned to 
        each library--they are responsible for checking items out and 
        conducting daily transactional inventories to ensure classified 
        media is positively accounted for at all times.
 The library custodians are deployed security professionals reporting 
        directly to the Security Division.
 To ensure the libraries maintain a high level of performance we began 
        no-notice inventory inspections.
 To solve the issue of fragmented accounting systems we have begun the 
        procurement of a Lab-wide inventory/accountability system.
 We are pushing hard on line organizations to destroy unneeded 
        accountable CREM, we have destroyed over 7,000 items in the 
        past two months, with many more entering the destruction 
        pipeline. As of March 4, 2005, the Laboratory has 20,074 pieces 
        of CREM.
 To help further reduce the accountable CREM holdings we are 
        continuing our effort to replace stand-alone classified 
        computers with ``media-less'' computer networks.
 LANL is rapidly driving towards the goal of having less than 2,000 
        pieces of accountable CREM. We believe this number reflects the 
        long-term static inventory and once achieved will represent 
        more than a 97% reduction in accountable CREM holdings. With 
        continued investments in ``media-less'' networks, we hope to 
        hit this goal by the end of FY06.
    I believe it also very important to point out that many of the 
problems we have had in the past regarding difficulties with 
safeguarding classified information can be tied to two over-arching 
issues. The first is the failure to invest in what I would term 
``engineered'' solutions. In many cases we have had good employees 
trying to do a difficult job without the benefit of the right tools. 
The best example is the shortage of classified networks that do not 
rely on high-risk portable CREM--simply put, the more we invest in 
classified networks the more we reduce the likelihood of losing control 
of classified information. It is important to note that technology 
enhancements alone will not solve the entire problem. Along with 
engineered solutions we are ensuring that strong management oversight 
is in place to detect problems and solve them before they become a 
crisis. Thanks to funding support from Congress, we are moving to 
finish our expansion of media-less computing systems. This support is 
paving the way for continued improvements in our security 
infrastructure and will position us to more effectively meet our 
security challenges.
    The second over-arching issue is that we have not done as much as 
we could to provide our scientists and engineers with the necessary 
security resources. As with any large operation involving highly 
classified information, the rules and requirements for security can be 
difficult to understand and implement. We are deploying security 
experts to our line organizations for the sole purpose of helping them 
to continue to build solid security programs. Our security experts are 
focusing on building better security plans, providing real-time 
training, and wading through the security rules to find the right 
solutions to adapt to our operations. The feedback I'm receiving is 
that this model is a resounding success--we will continue to put a 
great deal of effort into building this partnership and we have high 
hopes for its ability to substantially improve security performance 
across the Laboratory.
             how these changes are improving our operations
    While we are continuing to make enhancements to the new model for 
controlling accountable classified media, initial indications reveal 
that the system is working well, with tangible benefits for both 
improved security control as well as operational efficiencies resulting 
from the economies of scale we are seeing in the library approach. The 
major benefits include:

 Substantial improvement in daily control and accountability for 
        CREM--it is under the direct ownership of approximately 40 
        custodians. This represents a more than 99% reduction from the 
        approximately 4,500 employees who previously had direct access.
 Clear requirements and training for handling accountable CREM when it 
        is checked-out of the library--a rigorous training process is 
        required before you can be assigned as a ``borrower'' of the 
        media.
 Line organization managers and staff are now able to concentrate on 
        their mission--they are still responsible for protecting the 
        media when it is checked out, but they do not have to spend 
        countless hours maintaining individual accountability and 
        control systems.
    Apart from the very tangible benefits we are seeing from our 
efforts to change the security model, we are also starting to see the 
intangible benefits tied to attitudes and perceptions of the workforce. 
As a result of the incidents we have had over the past several years 
there was a real concern among our employees that the task of doing 
their job safely and securely was getting increasingly difficult, with 
the addition of more and more policies and procedures to follow. With 
each new set of policies and procedures came the perception of 
increased risk in inadvertently violating the rules. I am particularly 
proud of the fact that instead of making the job even more difficult to 
do, our response to this most recent incident has actually simplified 
the work and clarified the responsibilities our workers have in 
protecting classified information. As a result of this simplification 
our workforce is becoming increasingly confident in taking personal 
responsibility for safety and security--as with any human endeavor, 
personal responsibility is the linchpin of performance. I'm confident 
that we are rebuilding the sense of trust and mutual support that is 
absolutely essential to sustaining our operations and delivering on our 
national security mission.
                     physical security initiatives
    Finally, I want to take this opportunity to tell you what we are 
doing on upgrading the physical security of the Laboratory to deal with 
the post-9/11 world. As you know DOE has recently revised their Design 
Basis Threat (DBT), which articulates the adversary force size and 
capabilities that we must be able to defend against. I will tell you 
quite honestly that this new DBT represents a significant challenge to 
nuclear sites, but it is a challenge we must meet. We have been working 
literally from September 11, 2001, to fundamentally change the security 
posture for our site. An amazing array of upgrades and improvements has 
been made--all for the singular goal of safeguarding the people and 
security interests under our control. I am particularly proud to point 
out that the most recent DOE inspection of the protective force 
performance at TA-18 clearly shows that the facility is well defended 
and the nuclear materials housed there are secured. The Department has 
made the decision to relocate the TA-18 mission and the nuclear 
materials to Nevada and we are fully committed to making this happen as 
quickly as possible.
    To address the recently revised DBT we are developing a 
comprehensive project plan designed to guide our long-term strategy for 
meeting the new challenges. The project plan, which is due to NNSA in 
July of this year, includes new initiatives to control access to the 
site, upgrades in the size and lethality of our protective force, 
consolidation of nuclear operations to achieve economies of scale for 
our protection operations, and new construction of barriers and alarms 
at key facilities. I am confident in our ability to defend the site, 
and that confidence is anchored by DOE assessments that tell us we are 
good and getting better. We will continue to spare no effort in our 
quest to ensure the security of Los Alamos and the national security 
mission with which we are charged.
                                summary
    As I mentioned in my opening comments, the decision to suspend 
Laboratory operations was not an easy one. The decision has caused 
great turmoil within the Laboratory and generated a fair amount of 
second guessing. From my vantage point the suspension of Laboratory 
operations was absolutely the right thing to do--the pain we have 
experienced is more than offset by the long-term gain we will see from 
this investment. Today we have a solid grasp on safety and security 
risk areas within the Laboratory based on comprehensive risk analyses. 
As a result, we are better situated to understand the safety and 
security implications of the work we do. The suspension of operations 
has introduced a formality of operations to an institution that 
desperately needed it. I cannot sit here today and tell you that we 
will never have another safety or security incident at Los Alamos; our 
operations are too large and too complex to ever be able to give you a 
100% guarantee. But what I can guarantee is that the management at the 
Laboratory and the University of California is committed to continuing 
its improvements to both safety and security. We will take an 
outstanding operation and make it even better, and we will continue to 
deliver on our commitment to the safety and security of this nation, I 
promise you that.
    Again, thank you for allowing me the opportunity to address you and 
I would be glad to answer any questions you may have for me.

    Mr. Whitfield. Thank you very much, Dr. Nanos. We 
appreciate your testimony.
    And I have with me here some transcripts from three 
oversight and investigative hearings that the Congress--this 
subcommittee--conducted back in 2003 regarding procurement and 
property mismanagement failures at Los Alamos.
    And you can see from the size of these transcripts that 
this committee spent a lot of time on mismanagement at Los 
Alamos. And I know that you were not hired to be responsible 
for this program by the University of California until 2003, 
which was sometime right after these hearings were conducted.
    But, then, in September 2004, we received a copy of an 
audit that was performed by the equivalent of the inspector 
general for the University of California, regarding lack of 
procurement and property controls at an area called Technical 
Area Number 16. And, specifically, they were talking about the 
fact that 21 unauthorized sheds were built at Los Alamos and 
filled with unauthorized materials, supplies and equipment.
    And it went on to say that the University of California 
overpaid on these sheds. These sheds cost the University of 
California $8,255 per shed. The base price was $5,570. So the 
unauthorized sheds were built and overpaid by the University of 
California, $56,000.
    Now, I know that these sheds were, my understanding, built 
prior to your arrival. But this became public knowledge only in 
September. And I guess I would have two points to my question 
here. One, there continues to be, seems to be this problem of 
mismanagement at Los Alamos regarding the University of 
California.
    Two, this audit performed by your inspector general that 
found these sheds 3 years after they were built, that were 
unauthorized, inflated prices were paid for them, unauthorized 
materials being kept in them, why would it take so long for you 
all to recognize that these were unauthorized and containing 
unauthorized materials?
    Mr. Nanos. Sir, you were correct, I believe, in pointing 
out that those were sheds that had been previously looked at. 
When they were raised in the audit, in--last year, we went back 
and immediately looked at the material. And we found out that 
the material was in fact proper material to be used at the site 
and in the laboratory.
    That--in distinction from previous things that you were 
made aware of, there was no unauthorized material there in the 
sense that that was all legitimate material for use at the 
laboratory.
    Mr. Whitfield. When you say--are we talking about what was 
stored in the sheds?
    Mr. Nanos. In the sheds. Yes, sir. And some of it had been 
procured at the time of the sheds and some of it had been 
procured subsequently and the sheds were used for storage.
    Mr. Whitfield. But you would agree that the sheds 
themselves, at least that process, was not properly conducted?
    Mr. Nanos. Well, the--it was clear that that contract was 
one that had been previously looked at, had a fairly 
substantial increase in scope, growth and scope over the years. 
And that was one that our current procedures and process 
preclude from happening again.
    No one is authorized to increase the scope or the ceiling 
on contracts to the extent that that one had in the past. Also, 
we are reviewing the costs and the close-out process on that 
contract. We are reviewing the charges and deciding to what 
level we are going to dispute it.
    I am almost positive that we will end up disputing these 
charges and putting in a claim against the contractor for 
overcharges. In the normal closeout process of the contract, 
we, of course, go through and audit all of the costs to make 
sure that they are right and proper and we are not being 
overcharged.
    Mr. Whitfield. So you do intend to go back against the 
contractor for the overcharges on these?
    Mr. Nanos. Yes, sir. We have not yet finished the close-out 
audit on that contract. So that is still an open issue that we 
will deal with.
    Mr. Whitfield. You do agree with this audit report, though, 
that shows the irregularities as it pertains to the building of 
these buildings outside of the scope and so forth?
    Mr. Nanos. Yes, sir. Let me just take a minute and tell you 
what we are doing now. You can increase--we had a problem with 
noncontract people, nonbuyers making commitments for the 
laboratory with contractors, and making constructive changes to 
contracts.
    In my first year, I changed our instruction to make it very 
clear that you had to have contract authority in order to make 
scope changes to contracts, formal contract mods, and that 
could not be done casually in the laboratory.
    We also have made it clear that all purchases under these 
contracts now have to go through authorized buyers and that 
even an authorized buyer cannot bump up the ceiling more than 
$200,000 on any large contract without going through a contract 
official.
    In other words, we did not set that at zero because we did 
not want to be administratively adding burden to everything. 
Often, when we buy things, it is important to get it in a 
timely manner, because we do not want to be building up 
personnel costs for want of a nail.
    But, on the other hand, we do not want people increasing 
the ceiling on contracts without going through our proper 
contracting channels. So we have established a policy that that 
has to be formally done now. And that will preclude this type 
of activity from occurring in the future.
    Mr. Whitfield. Now, there are allegations that there are 
other types of structures out there that may have been built 
under the same circumstances. Do you expect that we will have 
some other revelations as we move along?
    Mr. Nanos. Sir, we have a tremendous number of temporary 
structures and transportables at the laboratory. It is one of 
the big difficulties that I have to face is that I have an 
awful lot of substandard space that we are trying to move out 
of.
    And each one of those, though, is cataloged, has a building 
number, even if it is a trailer. So we are not--and many of our 
structures go back to the 1950's. So it is not--I would not say 
it is a modern well-ordered site in general. And we are trying 
to manage our way through that, coalesce, consolidate, get rid 
of unneeded space and reduce the cost of our footprint, our 
facility footprint.
    And so there are--it is hard to go to Los Alamos and view 
the site and not come away with the feeling that there are a 
lot of temporary-looking structures.
    Mr. Whitfield. Chairman Barton recently sent a letter to 
Ambassador Brooks saying that he thought the University of 
California should pay a portion of the cost of the standdown. 
And you heard our discussion earlier about the cost figure.
    But, from your perspective with the University of 
California, do you feel like the Department of Energy can 
legally charge the University of California with a portion of 
those costs, pursuant to the terms of your contract?
    Mr. Nanos. Sir, I do not want to get--I am not qualified to 
talk about the legal issues. I spent 8 years running major 
contracting activities in the DOD. So I do have some 
experience.
    I feel that all of the work that we did during the period 
of the standdown was work that was authorized under the 
statement of work. And I know there is some parts of the 
charges that--or the costs that we have exposed to our 
contracting officer that are still being looked at in the 
normal course.
    In other words, they have not finished their review. But, 
to my knowledge, everything that we did, which was management 
self-assessments, which is called for under contractor 
assurance, and, you know, identification of deficiencies. And, 
frankly, correcting deficiencies is all work that we are called 
upon to do in the normal course.
    We just normally do not do it in such a concentrated way. 
Also, other than that work, which was, I think, the main heavy 
lifting of the management self-assessment, the assessment of 
risks and correction of deficiencies, the rest of the work that 
was going on at that time was all our normal programmatic work.
    I am happy to say that the laboratory, I expect that within 
the next month, the laboratory to be back on schedule with 
their major programs. In other words, we have been able to 
immediately reapply ourselves back to our mainline DOE programs 
and get back on schedule.
    Mr. Whitfield. As a result of the standdown, how far was 
your programmatic work delayed or how long?
    Mr. Nanos. The programmatic--I would have to go back and 
look at the exact change in milestones. But if you look at 
the--where these milestones--in other words, there were some 
deliverables at the end of the fiscal year that we did not 
meet, and that got continued into the next fiscal year.
    But, we are catching up on those particular areas of 
production, and tests that are required to support major life-
extension programs for our systems. The most critical part of 
the work, which was safety, security and assessment of the 
stockpile for the country, we kept on schedule despite the 
standdown.
    So we did slip some milestones, and I will give you an 
example. The tests in support of the major life-extension 
program that were delayed are--the experimental set up has been 
completed. And we expect, by the end of the month, to be back 
on schedule with that testing. And that was in an area, that 
was with a division that had--that was the one that had the 
security problems, and many of the compliance problems, and 
took us the longest to rebuild. So I am very proud of their 
intense effort to get back on schedule and meet the national 
need.
    Mr. Whitfield. Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman.
    Dr. Nanos, it is good to see you again. I think we met when 
you just started at Los Alamos, when we were out there that 
time for the visit.
    Mr. Nanos. Yes, sir.
    Mr. Stupak. Let me see if I can get this right. You are an 
employee of UC, University of California?
    Mr. Nanos. Yes, sir, I am.
    Mr. Stupak. We would hope that when we see you again, it is 
not in a situation where we are talking about another slip up 
at Los Alamos. So we would really like to, I am sure I speak 
for everybody on the committee, have better dialog with the 
lab. I know you have an office here and things like that. So 
you have got the University of California. You have got your 
law firm and DOE, and we should really have more interaction 
and dialog so we can work together more on some of these 
things.
    I know your lab just come up in an announcement the other 
day on that muon--am I saying that right, sir?
    Mr. Nanos. Muon radiography. Yes, sir.
    Mr. Stupak. That is stuff that--let us know so we can help 
work together on some of these things. That is what we would 
like to do instead of always being here when things are not 
going too well for you.
    Let me ask you this. Mr. Brown, and I know we mentioned the 
white paper. He has been at Los Alamos for over 18 months and 
had observed the practices and drawn some comparisons based 
upon his 30 years of experience in assessing adequacy of 
nuclear industry practices at various organizations that are 
under the oversight of DOE and the NRC. So was Mr. Brown a 
qualified auditor?
    Mr. Nanos. As far as I know, within his experience, he was 
qualified to do the job that we gave him. He was obviously 
working for my Performance Surety Division, and had been 
assigned to that work by the--by the division leader, who I 
have great confidence in by the way.
    So I have--I am confident that, you know, it is the point I 
am making here is that I do not have any issue with Mr. Brown 
and what he did, and we have taken his comments seriously.
    Mr. Stupak. Have you discussed them with Mr. Brown?
    Mr. Nanos. I have not personally, but I have been involved 
in some of the issues. I can give you an example of one for 
example.
    Mr. Stupak. No.
    Mr. Nanos. But the work--in other words, I have not talked 
to him. But his reports have come to me.
    Mr. Stupak. I guess what I am looking at is, if he wrote 
his letter on October 22, 2004, has anyone gotten back with Mr. 
Brown and said, hey, you might be mistaken on this weld point? 
That was an issue that you brought up.
    Mr. Nanos. We would--the weld point is a good one. Because 
that one I know a lot about. He was not mistaken.
    Mr. Stupak. The point I am trying to say, has anyone even 
gotten back with Mr. Brown?
    Mr. Nanos. That is good. I do not know. I have not 
personally.
    Mr. Stupak. See what I mean about the mix up in the dialog. 
I wish someone would have sat down, because when we go into 
closed session, we are going to ask you a little more specific 
stuff in here. But you see, no one gets back with the guy. And 
then there is back and forth with us. And now that is why we 
need to work together on these things, because if he is 
qualified, obviously, he has some concerns, and he still is not 
satisfied, and no one has gotten back with him. So can you see 
how the things gets sort of out of control?
    Mr. Nanos. Yes, sir. The only part I am short on, is since 
I did not talk to him personally, and nobody reported to me 
that they had talked to him personally, I cannot tell you the 
degree to which he has been gotten back to. But I will get that 
answer.
    Mr. Stupak. Okay. He goes on and he says: The University of 
California faces precarious times. Management's lack of 
emphasis on nuclear quality assurances increases the risk of a 
clear and present danger to employees and to public health. 
Ineffectual management practices, an air of superiority, 
complacency to normal nuclear industry practices/procedures 
combined with serious cultural biases equate to an environment 
fraught with potential for dangerous consequences similar to 
the Challenger or Chernobyl disasters.
    And, you know, like I say, I have been on this committee 
for 10 years. And just looking at Los Alamos' track record, it 
is--without further dialog between us, it is hard to say who is 
correct here, Los Alamos or Mr. Brown.
    Mr. Nanos. Well, let me make the following comment. I 
think--I would probably have a discussion with him about the 
issue of something akin to Challenger or Chernobyl. But, it is 
clear from my observations at the laboratory, that we had to do 
something about our safety and compliance culture. Because of 
our record in Price Anderson violations, because of our record 
in safety, and because the correlation--and what the security 
brought to it, was that there was a behavorial aspect of people 
not wanting to go along with the rules that we had to deal 
with.
    So the shutdown was necessary to do that. We are also 
continuing--to follow the shutdown with something we call 
operational efficiency, which is to take what we learned during 
the shutdown and institutionalize it. And also, I have 
introduced the Dupont STOP program, Safety, Training, 
Observation Program, which is a behavioral-based safety program 
because of our belief that we have to drive this--these kinds 
of concerns into the culture.
    But, if he says that there is work to be done at the 
laboratory to improve the culture for safety and compliance, I 
agree with him. That is why I said shut the laboratory down.
    Mr. Stupak. It is that culture, I used the same word 
earlier about the culture there, that we have these repeated 
problems related to security, trustworthiness and safety that 
we are very, very concerned about.
    You indicate in your opening that you would get back to us. 
I had asked for a detailed point-by-point accounting of Mr. 
Brown's allegations. And we would really like someone to get 
that to us and bring it back to this committee. Are you 
committed to do that?
    Mr. Nanos. Yes, sir.
    Mr. Stupak. As soon as you can?
    Mr. Nanos. Yes, sir.
    Mr. Stupak. At the same time, why not stick one in the mail 
to Mr. Brown, if that would be appropriate there, or if you 
want the committee will? I just think that he needs to see that 
there is a culture of change.
    I was a little concerned, Mr. Burgess asked about the other 
plant there, nuclear plant, similar size, I think Ambassador 
Brooks said, which seems to run well, better than Los Alamos 
obviously.
    And Los Alamos has been a lab for a long, long time, 
probably one of the first ones that we had. So I would think 
the expertise in security and all of this would be at Los 
Alamos, not at a relatively new lab in Texas.
    So it is that culture I think that we are trying to break. 
And it sounds like--I know you have only been there 2 years. 
You are starting to get to it. I was surprised but pleased to 
see that when you started your shutdown, there were 350 
prestart issues that you identified, and then, once you got in 
there, you saw about 3,000, I think it was, issues that have to 
be addressed. So you have got a big job ahead of you.
    Let me ask you this. When you do this standdown, does 
anyone from the outside come in to assist, or is this just an 
internal standdown, and these 3,000 things you have identified 
internally? How does that work? Do you bring in outside 
experts?
    Mr. Nanos. What we did, first, and I have got a copy of it 
here, our restart instructions, in great detail on what we want 
people to look for. We covered everything in terms of safety, 
security, personnel, leadership, everything.
    Then we convened something we called a Restart Review 
Board, which incorporated some outside consultants, my people, 
people sitting on it from the NNSA site office. In other words, 
the other thing I want to emphasize, that this was not the lab 
and UC standing alone, standing up our laboratory, it was a 
cooperative effort with NNSA. So we got all eyes. Then they 
reviewed all of the documentation for restart for the entire 
laboratory, for the two highest levels, level two and level 
three.
    And I reviewed all of the documentation on their work, and 
personally approved the restart in every area. I saw that they 
had done a very good job of bringing, in other words, of 
striking a balance of risk across the laboratory. In other 
words, they were very----
    Mr. Stupak. You said they did a good job.
    Mr. Nanos. The RRB, the Restart Review Board. They did an 
extremely good job of assessing risk and striking a balance. In 
other words, I was not taking extreme risks in one part of the 
lab and no risk in another. It was very well done and well 
documented across the laboratory.
    Mr. Stupak. So if I understand your answer, in this 
shutdown, you bring in people from NNSA?
    Mr. Nanos. Yes, sir.
    Mr. Stupak. And then outside consultants?
    Mr. Nanos. They were members of this review board. I had 
some outside consultants that I had known in my previous life 
that I had confidence in and were able to----
    Mr. Stupak. As a result of the shutdown and bringing in 
these consultants, let me ask, do you think that would be a 
fair cost for the taxpayers to pay, or is that one that you 
guys should eat that cost of the outside consultants and NNSA?
    Mr. Nanos. It was--the outside consultant in particular is 
one I had brought in to help with the formality of operations 
in the laboratory before the shutdown. So what I did is I just 
had him sit on this panel as part of his duties.
    Mr. Stupak. What--what are the challenges you face now 
specifically as the lab director? You have been there for 2 
years. You have been through a shutdown. What are your 
challenges to get it so we do not have you come back here in a 
year or 2 years for another shutdown for some reason?
    Mr. Nanos. Well, I think--it is hard for me. I am not 
asking for any mercy or anything. But the--I think if you look 
at the examples of similar turnarounds and culture changes in 
industry in other areas, I remember the model I was looking to 
when I was doing change in my last job in the Navy was the IBM 
model, where it took them seven areas to reform their corporate 
culture and organization and change the fundamental focus.
    It is hard to know how long this is going to be. I estimate 
that a change of this magnitude in an organization this size 
could take maybe 5 to 7 years. So I am counting that I am about 
2 years into at least a 5-year process. So we are hopefully 
approaching the tipping point and coming down the back side of 
the mountain. But it is--with the variety of operations and 
having to drive a corporate focus, and not a--in other words, 
the laboratory people used to joke that Los Alamos was 19 
laboratories combined by a common janitorial service.
    But now, I think the laboratory is working cooperatively as 
an entire institution to work its problems. And I think we have 
gotten to that point of unity and are now, as an organization, 
as a cohesive organization, starting to work our way through 
this. And it will take a number of years, I think, to get it 
out to every part of the laboratory.
    But I think the change, the pace of change has been very 
aggressive. And I have to tell you, I am very pleased with 
where we have come in a relatively short time during my tenure. 
I am very proud of what the people have been able to 
accomplish.
    So I have confidence we are going to get there. 
Unfortunately, I think the record of other organizations and 
industries say that culture change of this magnitude is a long 
process.
    Mr. Stupak. One of the entities we deal with a little bit, 
and we have dealt with in dealing with Los Alamos, is the firm 
of Covington and Burling, if I said that right. Does the 
University of California pay them, or is it part of the budget?
    Mr. Nanos. I do not pay them.
    Mr. Stupak. It does not come out of the lab budget?
    Mr. Nanos. No, sir. I do not. I assume that that is the 
University of California. I have no knowledge of that.
    Mr. Stupak. Very good.
    Mr. Nanos. They talk to me occasionally, but as far as I 
know, I am not paying for them.
    Mr. Whitfield. Dr. Burgess, you are recognized for 10 
minutes.
    Mr. Burgess. Thank you, Mr. Chairman. Doctor, many of the 
instances of security mismanagement at Los Alamos over the 
years, including the recent incidents that we are talking about 
this morning last year, occurred within one specific program, 
the DX division. Can you explain why this division has had so 
many ongoing security problems?
    Mr. Nanos. Well, it is hard for me to go back before my 
tenure. I can tell you, in the current situation, I made the 
determination, once I found that something had happened, first 
of all, I want to separate the security problems into two bins.
    We had a number of security problems that I take 
personally--personal responsibility for as management at the 
laboratory, because, you know, when you have got somebody in 
bad lighting conditions doing a destruction, trying to read the 
small numbers off a barcode and transposes a number and gets it 
wrong, makes a human error, I feel that management has failed 
that individual, that we have given them a system to work with 
that they cannot deal with.
    What was unique about this case was that it involved 
behaviors, people who knew the rules, who did not follow the 
rules or who falsified documents and signed off improperly. And 
I think the key point that we made in this particular incident, 
as I went into it, compared to previous ones, is I said, 
remember I put 19 people on administrative leave or 
investigatory leave at the beginning of this.
    And the statement I made was that, unless I find the answer 
of who did what with this material, these 19 people will never 
touch another piece of classified information at this 
laboratory again. I will never take the risk until I find out 
what was done and how it was done properly.
    I think that would--and we did find people who actually did 
things improperly. We terminated those people. And then we 
actually took action. I think that that established clearly the 
laboratory's standard of personal accountability.
    And, frankly, I think where, the university, it has not 
been as strong about personal accountability for classified 
information and safety and compliance and the environment. And 
we made that clear at this time.
    So I cannot go back and talk about before my term and how 
that was done. But I can tell you that I was dealing with those 
two types of things. And I was trying to do what I needed to do 
as the manager of the laboratory to protect people from simple 
administrative errors while at the same time hold people that 
were accountable for malfeasance, accountable for their 
actions.
    And I think we drew that line successfully in this last 
incident, and hopefully that will drive the culture.
    Mr. Burgess. Well, of course, the whole purpose of a bar 
code is so that you will not transpose a digit.
    Mr. Nanos. Yes, sir.
    Mr. Burgess. But I will accept that. I guess I am disturbed 
about the comment, human error versus a behavioral problem. I 
mean, a behavioral problem at that level of security clearance, 
I mean, it seems to me it goes beyond just being put on 
administrative leave or having the security clearance removed. 
Was there ever any thought given to prosecuting the individuals 
involved?
    Mr. Nanos. We did exercise the full authority that we had 
in that regard, and we, in fact, terminated the employees that 
were involved, not just put them on leave. Once we found the 
facts and the people who actually--in other words, we had a 
graded approach. Basically people were held accountable for it 
and disciplined for what they, in fact, did. And those who 
operated falsely were terminated, and those who took shortcuts 
with the administrative procedures, in other words, accepted a 
bar code when they knew they shouldn't, were, in fact, 
suspended without pay. So there was discipline and there was--
for each infraction based on the level of involvement.
    Mr. Burgess. So you believe it was--that there wasn't 
criminal intent when you say ``adverse behavior'' or 
``unacceptable behavior.''
    Mr. Nanos. Well, when two people say, hey, we're supposed 
to do the inventory; let's not do the inventory, let's sign the 
document and say we did it.
    Mr. Burgess. I am new here, but that is bothersome to me. 
We are talking about a big deal here, aren't we? Los Alamos.
    Mr. Nanos. Yes, sir; yes, sir.
    Mr. Burgess. That is where they built the bomb.
    Mr. Nanos. Yes, sir. We, in fact, terminated those people.
    Mr. Burgess. Mr. Chairman, I would just ask the question is 
termination enough when you have someone whose behavior is that 
aberrant in that type of facility?
    Mr. Nanos. Well, I don't have--I don't have police powers. 
The people who were--in other words, the FBI was there with us 
doing the investigation. They are the ones that generally in 
this case would take that to the attorneys.
    Mr. Burgess. I will accept that. And I thank you for your 
candor.
    I just have to ask how in the world do you have a laser 
injury of that magnitude in a laboratory?
    Mr. Nanos. It was terrible, frankly, and the person who had 
that laboratory and was operating with that student was 
terminated because it was egregious. I had--I had docked the 
pay, or I had adjusted--we had--this was in a division where 
they had had previous safety difficulties in the previous year 
because of other safety incidents. Both the associate director 
and the division leader had had their pay adjusted downward to 
send a clear message that I expected better performance. And in 
this particular incident, I fired the individual who had 
control of the laboratory. His immediate supervisor was put on 
leave without pay. The division leader was removed from that 
position. I didn't terminate him because I felt he was trying 
to do the right thing, but he was ineffective. But because of 
his lack of effectiveness, I removed him from this position. 
And the associate director, who I felt did not spend the proper 
amount of attention on operational matters, I removed.
    Mr. Burgess. What has been the outcome of that injury? Has 
that person lost his sight?
    Mr. Nanos. That person has--has lost a large percentage--
basically it destroyed the center part of her retina, and she 
has lost the center part of her vision and some of her depth 
perception as a result of that. And that's a permanent injury.
    Mr. Burgess. Yes, sir. As far as the--obviously the 
laboratory bore the cost of the medical treatment?
    Mr. Nanos. Yes. And we have continued to follow up with her 
and her family.
    Mr. Burgess. And presumably some type of compensatory 
offer?
    Mr. Nanos. I don't have the detail. I can get the--I don't 
know the detail information. I just got a recent report on her 
condition from my head physician who had just been up to visit 
her and the family, but I don't know the final result of 
compensation that she was given. I think we provided basically 
all the--I believe we provided all the medical care, but I 
don't want to get too far into that without getting the data 
for you.
    Mr. Burgess. Was the expense of the medical care and 
whatever compensation was going to be offered, is that borne by 
the university or by the taxpayer?
    Mr. Nanos. That is costs under the contract, you know, for 
the care that we provide in that case. Those services that we 
provide under the contract we provide for all injuries. And we 
had--by the way, that is another indicator that we had that 
things were not going well. We had a fairly substantial number 
of injuries last year that we had to deal with. But they are 
treated like all the rest of the industrial injuries.
    Mr. Burgess. I thank you for your candor.
    I yield back my time, Mr. Chairman.
    Mr. Whitfield. Mr. Walden.
    Mr. Walden. Thank you very much, Mr. Chairman.
    I assume you have workers' comp coverage.
    Mr. Nanos. Yes, we have workers' comp.
    Mr. Walden. Does this fall under that, then? Workplace 
injury?
    Mr. Nanos. I don't know--I think we responded immediately. 
So I would have to go back. I don't want--as I said, I don't 
have the data sheet in front of me, but I can get that for the 
record.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] T9905.033
    
    [GRAPHIC] [TIFF OMITTED] T9905.034
    
    Mr. Walden. I don't envy your task.
    You have how many employees.
    Mr. Nanos. We have about a little over 8,000 University of 
California employees and probably between 12,000 and 13,000 
employees on the Hill.
    Mr. Walden. Twenty-one thousand.
    Mr. Nanos. I total of 12,500 to 13,000, including our 
support contractors.
    Mr. Walden. How many management staff out of that?
    Mr. Nanos. Let's see.
    Mr. Walden. Ballpark.
    Mr. Nanos. I would say down to the division level it is 
probably like a number like 60 or 70.
    Mr. Walden. Managing 12,000 or 13,000?
    Mr. Nanos. Yes, but we have a lower level of group leader 
which is below that division level. So, actually part of the 
issue that we are addressing is that we have a very--in some 
areas a very broad span of control, which is probably part of 
the issue that we're facing.
    Mr. Walden. It is the balance between how much middle 
management do you have and need and the costs of all of that.
    Mr. Nanos. We tend to be on the low side, I believe.
    Mr. Walden. I think that is what we are seeing perhaps as a 
problem, in the sense that it strikes me on this issue of 
accountability on the bar codes, mismatched numbers, or the 
decision that they were just going to falsify the data--given 
the importance of what they deal with, that there is no check 
and balance. I spent 5 years on a community bank board, and a 
teller making 14,000 a year moving money has got a check and 
balance. Has to balance their till every night, and if you are 
going in and out of the vault, there are certain checks and 
balances.
    Mr. Nanos. Yes, sir. As a matter of fact, if you look at 
the business process, one of the immediate actions I took when 
I took over the laboratory was to go down to the group level 
and add administrative people that had been taken out--that 
were the ones that were doing some of this administrative 
checking. There had been no much burden put on at least at the 
group level, the managers, that they were unable to manage the 
science and manage the administrative part at the same time.
    So we have, in fact--and you will see that a lot in my 
testimony--a lot of what we are doing now is by going to 
diskless computing, improving the classified network, and, 
frankly, by shrinking the number of locations for classified 
material now from hundreds to tens, we are in the process--we 
are able--we have much more resources in terms of being able to 
conduct inventories and do checks and balance.
    Mr. Walden. You have less to inventory.
    Mr. Nanos. Less to inventory, and fewer people doing it, 
and much tighter control. In other words, we do transactional 
inventories on the safe. You are the custodian responsible for 
the safe. I come and draw my electronic media in the morning; I 
bring it back by the end of the day. You know what was in the 
safe, what was withdrawn, what was put back, and so you keep 
track on a transactional basis and at periodic intervals do a 
complete inventory.
    Instead of having hundreds of locations, you now have 20 
with a staff that is concentrated, that is professional, that 
has a career path doing that.
    Mr. Walden. And isn't that where people would take off from 
lunch and leave it unattended and--or asleep or whatever? I 
mean, wasn't that where that problem was in the process?
    Mr. Nanos. That wasn't our lab. We didn't have guards, for 
example, that were asleep. But what we did have, we did have 
people who were custodians. In the old system, if you were a 
scientist, you had your own safe with your own classified media 
in it, and that was spread all over the laboratory, and there 
was a collateral duty classified material custodian that would 
come by every once in a while and inventory your safe to make 
sure that everything was okay.
    What we have done now, that has been done away with. You do 
not keep your own classified material anymore. It is in the 
library. When you come to work, you stop by the library, you 
withdraw it if you need to use it that day. And if you do not 
need to use it, it stays in the library, it is not distributed, 
it is concentrated.
    Mr. Walden. Is there--do they have to turn in their media 
before they are allowed out the door?
    Mr. Nanos. Yes, sir. As a matter of fact, in some areas you 
will find people walking around with chains around their neck 
with a big orange card on it. It's called the M-card, or the 
moron card. It is to remind you that you have withdrawn 
classified material, and until that is off, you can't go home.
    We are taking very direct measures to make sure that people 
are reminded of their responsibilities, and, frankly, if you 
try to go home, and the custodian--the custodian can't go home 
until it is all back, and if they see you heading for the door, 
they will say, wait a minute. Somebody will go back that night 
and look for the material.
    Mr. Walden. Do you feel like you have the buy-in of the 
rank and file, of those 12,000?
    Mr. Nanos. I think that there has been a great deal of 
consternation at the laboratory. There are people who have felt 
that what we have gone through has not been necessary. It has 
fallen to me to take the message, the collective message of you 
all and others, to the laboratory. They have not been happy. 
And some, I believe a minority in the laboratory, have not been 
happy with that and have been very vocal.
    Mr. Walden. What do they say?
    Mr. Nanos. There are people who think that the safety was 
doing just find, and we didn't need have a shut-down for 
safety, and that, in fact, you know, that this is a burden on 
science, and that our science will suffer. And I don't believe 
that, and I think the majority of the workers and the 
scientists at Los Alamos don't believe that.
    But--and I think that moralewise we took the laboratory 
down to a very low level in terms of employee morale. And I 
think the combination of the shut-down and the suspension of 
operations, and the one-two punch of that and the contract 
competition has caused a great deal of personal unease on the 
part of many, many employees.
    Mr. Walden. So is that resulting in them buying into the 
improved security?
    Mr. Nanos. I think that the pressure that the laboratory 
has been under with the impending competition and the issues 
associated with first business and now safety and security has 
caused the kind of disquiet that has allowed me to implement a 
lot of change, probably more rapidly than would otherwise be 
the case.
    Mr. Walden. During the shut-down were you able to identify 
kind of the groups or individuals who just seem really 
reluctant to adopt these increased safety and security 
improvements?
    Mr. Nanos. Yes, sir. As a matter of fact, as part of the 
restart process, I asked every supervisor to interview their 
employees at the next level down and to make judgments about 
the capability of the employee, the level of training, and 
their willingness to supervise or--if they were supervisors--or 
to conduct operations in that way. And if it looked like there 
was a disconnect, in many cases we got employees additional 
training; in some cases we actually moved employees, changed 
them to more suitable roles if it appeared that they were not 
able to conduct business in the way that it needed to be done.
    Mr. Walden. Of the people that you dismissed, have you kept 
track of what happened to them? Do they reappear somewhere in 
the government?
    Mr. Nanos. I have not personally tracked them. There were a 
mix. There were some very high-level employees and some very 
low-level employees. I do not know--I don't personally know 
where they have reappeared. They certainly are not working on 
our staff.
    Mr. Walden. Okay. I don't believe I have any more 
questions. Thank you, Mr. Chairman.
    Thank you, sir.
    Mr. Whitfield. Thank you Mr. Walden.
    That concludes the testimony of Dr. Nanos. We appreciate--
--
    Mr. Stupak. Could I interrupt for a minute? Could I ask a 
question or two, if I may? I finished my statement by saying 
that you should at least get ahold of Mr. Brown and mail him a 
copy, but the more I sit here and listen to the testimony here 
today, I would hope that you would call him in and sit down or 
find a half-hour or an hour to go through this. You are telling 
us that you want to make the lab safe. Mr. Brown in his paper 
is saying he wants to make the lab safe. I think the goal is 
the same. I hope you guys can work together and work it out.
    You said you had a dispute or two with one of the things he 
said, but I think it would be in everyone's best interest. 
There is no doubt in our minds you are trying to do the best 
you can. So with Mr. Brown. And I would hope you would do that.
    The other thing that bothers me a little bit, Mr. Brown is 
now sort of considered a whistleblower, so he comes under the 
Government Accountability Project protections of 
whistleblowers. Why would Mr. Brown have to turn into a 
whistleblower if he is your auditor and he is trying to bring 
out deficiencies? It seems to me you would not want him to go 
under whistleblower, but rather work with you to help you out.
    Mr. Nanos. Sir, I don't consider him a whistleblower. He 
has selected himself as a whistleblower. We don't consider them 
a whistleblower. He is still employed and still doing audits. 
We have taken what he said seriously. We haven't retaliated 
against him in any way, and he is still a valued employee.
    So he is being cast--I am puzzled by why he is being cast 
in this position of being a whistleblower. Usually when you are 
a whistleblower, you are a whistleblower because you are either 
being retaliated against, or people are not taking you 
seriously. And I don't think that is true--either of those 
things are true in this case.
    Mr. Stupak. The Brown letter, the letter at least is on the 
GAP Web site, the Government Accountability Project. That is 
why I called him a whistleblower. Why would his letter be on an 
act that protects whistleblowers if he is not a whistleblower? 
That is why I used the word.
    Mr. Nanos. Maybe he had a fear of that eventually being the 
case. But it is certainly--there is no action on our part that 
I know of. One of the things I did when I took over at the 
laboratory, if you remember, 2 years ago, there were lots of 
claims of retribution. So I have been screening all these 
things that have come up, anonymous or otherwise, that indicate 
there is something wrong or there is retribution going on, and 
I run down and investigate every last one of those. So we are 
making sure that the communications are as open as possible in 
the laboratory.
    Mr. Stupak. I believe in your previous testimony you 
indicated you have an open-door policy if someone wants to go 
in, a whistleblower or whatever, who has some concerns.
    Mr. Nanos. Yes, sir.
    Mr. Stupak. So I take it from your testimony you will sit 
down with Mr. Brown?
    Mr. Nanos. Yes, sir.
    Mr. Whitfield. Dr. Nanos, thank you.
    Mr. Whitfield. At this time we will have our third panel, 
which consists of one witness, who is Ms. Danielle Brian, who 
is Executive Director with the Project on Government Oversight.
    Ms. Brian, we welcome you and look forward to your 
testimony. As you know, it is the custom of the oversight 
investigation subcommittee that you are able to have an 
attorney if you want one; if you don't, if you will stand, I 
would like to swear you in at this time.
    Ms. Brian. Yes, sir.
    [Witness sworn.]
    Mr. Whitfield. Thank you, Ms. Brian. You are now sworn in, 
and if you would give us your opening statement.

  TESTIMONY OF DANIELLE BRIAN, EXECUTIVE DIRECTOR ON NUCLEAR 
         SECURITY, THE PROJECT ON GOVERNMENT OVERSIGHT

    Ms. Brian. Thank you very much for having me to testify, 
Mr. Chairman. Last year we testified that we were cautiously 
optimistic that then-Secretary Abraham's initiatives would be 
implemented. As it turns out, our caution was well placed. The 
major problem is that the former Secretary failed to establish 
timely deadlines for their implementation, and, as a result, 
many of these initiatives have now stalled.
    To get back on track, we believe Secretary Bodman needs to 
set strict deadlines and needs to assign trusted staff to 
constantly follow up on their progress. Security experts' 
greatest fear is very distinct. A terrorist could successfully 
reach its target at one of these facilities and, within an 
extraordinarily short timeframe, use the highly enriched 
uranium to create an improvised nuclear bomb onsite, known as 
an improvised nuclear device, or an IND. It only takes a 
critical mass of HEU, which is about 100 pounds, to create an 
IND. To put this in perspective, one site alone stores about 
400 metric tons of HEU.
    Why should we care about this? According to the Department 
of Homeland Security, this is exactly what worries them. The 
detonation of a 10-kiloton nuclear bomb would destroy 
everything within half a mile and contaminate 3,000 square 
miles of land. The nuclear weapons complex creates these 
homeland security vulnerabilities right here at home.
    By far the most successful Abraham initiative was the 
reexamination of the Design Basis Threat. Under the new DBT, 
security forces will be required to repel more than three times 
the number of attackers than they were required to protect 
against prior to 9/11. But they will not be fully implemented 
until 2008, which I want to remind you is 7 years after 9/11.
    I would just focus comments on the initiatives that we 
believe require the committee's immediate intervention for the 
sake of brevity. With regards to TA 18. As we know, TA 18 is 
scheduled to be deinventoried of weapons-grade nuclear material 
by the end of September 2005. But currently, LANL is actually 
pushing to further activities at TA 18. And I understand 
Ambassador Brooks didn't have the opportunity to get briefed 
yet from the lab because he was in England, but these 
additional experiments are going to postpone the move for at 
least another 6 months. So POGO has been told that despite 
promises from the lab that they will meet the schedule, a 
choice is going to have to be made. Either these experiments 
will continue and they will not meet the deadline even by the 
end of the year, or they will have to pause in conducting these 
experiments and be able to move the materials to the Nevada 
test site on schedule.
    With regard to the initiative to review the necessity of 
retaining Lawrence Livermore special nuclear materials, this 
has really stalled completely. I think I know why. Just 1 month 
prior to Secretary Abraham's speech, NNSA Director Brooks 
testified before another House committee that he opposed 
suggestions of deinventorying Livermore; and, in fact, the NNSA 
has proposed doubling Livermore's plutonium.
    I understand from the testimony this morning that this 
particular initiative was combined with a larger initiative of 
looking in general at consolidation in the complex. But 
Secretary Abraham, in his speech, singled out Livermore as 
worthy of particular notice, and I think it was with very good 
reason. Roughly 7 million people live within a 50-mile radius 
of the Livermore lab. Many residential homes now exist across 
the street from the lab's fence line. And new townhouses with 
minivineyards are being built along the edge of the fence line. 
These homes sit only 800 yards from the superblock which houses 
the lab's plutonium.
    If I could direct the Congressmen to the photograph, the 
first photograph at the end of my testimony, which is from 
Livermore's Web site, you will see that Livermore lab is 
actually a mile across, and so you get a sense then of the 
distance. These are all houses now.
    Many of you live in areas which are getting overdeveloped. 
I live in Loudoun County, which is the fastest-growing area. 
This is the kind of thing that happens. But this is really 
unique in the complex, what is happening at Livermore, and 
these are $600,000 houses within 800 yards of the plutonium. So 
we are recommending that a particular focus be placed on 
Livermore and that special nuclear materials be removed from 
there.
    With regards to the highly enriched uranium materials 
facility at Y-12, the Department is currently breaking ground 
for an above-ground building, as we heard earlier, to store Y-
12's hundreds of tons of HEU. But the Department of Energy's 
inspector general has criticized the design and cost of this 
new building, concluding it will cost more and be less secure 
than the original plan for the bermed, partially underground 
facility.
    I direct you to my the other two photos that I have 
provided to the Congressmen. The first photo is of the Nevada 
test site's device assembly facility. This is a bermed design 
where you see that there is only one side that has to be 
protected; everything else is underground. In comparison, the 
current design for the facility at Y-12 has all these sides. 
You have the roof and the four sides. And actually, with the 
design, there is more than four sides.
    Now, it was ultimately Sandia's approval of this design 
that persuaded the Department of Energy headquarters to give 
the green light for this designed above-ground building, but 
POGO has learned that Sandia never compared this design to an 
underground design. And I understand from the testimony to the 
Congresswoman from Tennessee, who was asking the questions, 
there is no reason for a 2-year delay if there is a changed 
decision that maybe it should be underground. The government 
already has the design.
    Originally there was already a design for an underground 
facility at Y-12. It already exists. So we would recommend the 
committee suggest to DOE that they stop, because they have 
actually broken ground for the above-ground facility, and at 
least have Sandia compare that design to the security of an 
underground facility.
    Former Secretary Abraham also proposed the down-blending of 
100 additional metric tons of Y-12 surplus HEU. We believe this 
move is essential so that these materials no longer create an 
unnecessary homeland security vulnerability, and will, very 
importantly, significantly help in reducing the enormous costs 
associated with protecting these materials at the new Design 
Basis Threat.
    It appears, though, that DOE does not have the stomach to 
live up to its promises. The U.S. Has only currently down-
blended 34 of the 174 metric tons that have already been 
declared excess. The remaining down-blending is not scheduled 
for completion until 2016 or beyond. So we believe that DOE 
should both dramatically speed up the current down-blending 
schedule and affirm former Secretary Abraham's initiative of 
increasing the amount of HEU declared excess by another 100 
metric tons.
    With regard to Secretary Abraham's encouragement of 
consolidating nuclear materials, I understand that this study 
is just beginning to get under way 9 months after the 
initiative was assigned to NNSA. My organization, POGO, is in 
its final stages of preparing a report with recommendations of 
how to shrink the numbers of facilities across the country that 
house special nuclear materials from 13 sites to 7 at a cost 
savings of nearly $3 billion over 3 years.
    In conclusion, I would be remiss if I did not report to the 
committee that while not a part of former Secretary Abraham's 
initiatives, the treatment of whistleblowers throughout the 
complex remains abysmal, and I have to particularly make the 
point, given Dr. Nanos' comments, that retaliation really 
remains the norm and not the exception.
    In addition to Dr. Brown, another case in point is that of 
Tommy Hook and Chuck Montano, who have both worked at Los 
Alamos for decades. After the committee's three hearings on 
financial fraud at Los Alamos, the University of California was 
telling the public that all of those issues were resolved, 
while at the same time retaliating against these two men who 
knew otherwise.
    Hook and Montano were responsible for providing audit 
support for UC and uncovering ongoing irregularities and 
outright misconduct amounting to millions of taxpayer dollars. 
Their audit reports were withheld from the Department of 
Energy. Their treatment? Their work was taken away from them, 
they were given no work for 9 months, and are now being handed 
menial assignments. Even the head of the Los Alamos site office 
tried to intervene on behalf of Tommy Hook, only to be rebuffed 
by an arrogant University of California.
    Under the current system, DOE contractors have no incentive 
to treat whistleblowers well, as all their legal fees are 
reimbursed by the Federal Government.
    In conclusion, the Department of Energy does not need new 
offices, does not need new commissions, does not need new 
studies. The DOE needs to follow through on its existing 
commitments. I believe the committee should remain apprised of 
SSA Director Podonsky's important ongoing work, but even with 
the strongest leadership from the Secretary's office, the only 
way these initiatives will be enacted is with your continued 
vigilance. DOE's history has shown that without pressure from 
Congress, and in particular this subcommittee, these 
initiatives will fail.
    And I would just like to draw your attention to one more 
thing. One of my staff people was doing research and found a 
front page New York Times story from 1984 about a hearing in 
this subcommittee. And if you could indulge me, the first two 
sentences of this article were: ``the government has put into 
effect a sweeping new program to improve the security of 
Federal facilities where nuclear warheads are designed and 
made. The program has come about because of a new perception of 
the threat of terrorism and because congressional 
investigations have disclosed serious lapses of nuclear 
security.''
    So I don't think your work is going to end any time soon.
    [The prepared statement of Danielle Brian follows:]
 Prepared Statement of Danielle Brian, Executive Director, Project On 
                          Government Oversight
    Thank you for asking me to testify today. The Project On Government 
Oversight (POGO) is an independent government watchdog group. We have 
been investigating and working to improve security at the Department of 
Energy's Nuclear Weapons Complex for over five years.
    In May 2004, then-Secretary Abraham announced some bold initiatives 
for improving the security of the entire nuclear weapons complex. Last 
year we testified that former Secretary Abraham's initiatives were an 
important step toward addressing the key weaknesses in security in the 
nuclear weapons complex, and we were cautiously optimistic that they 
would be implemented. As it turns out, our caution was well placed. The 
major problem with the initiatives: The former Secretary failed to 
establish timely deadlines for their implementation and, as a result, 
many of these initiatives have now stalled. To get back on track, DOE 
Secretary Samuel Bodman has several issues he needs to address. First, 
he needs to set strict deadlines and, because officials throughout the 
nuclear weapons complex have strongly resisted any change, he needs to 
assign trusted staff to constantly follow up on the progress.
    Adding to the current bureaucratic inertia is the belief by those 
inside the complex that they can just wait out any new directives until 
the current Secretary has moved on, and the status quo can be 
maintained. The revolving door between the Department of Energy and the 
privately-run weapons labs creates a lack of incentive to change. There 
is an insular environment in which people coming into the DOE, and 
particularly the National Nuclear Security Administration (NNSA), bring 
with them their biases in favor of the status quo: No one likes to 
criticize their own actions.
    An array of concerns arises when it comes to securing America's 
nuclear material. But security experts' greatest fear is very distinct: 
a terrorist group successfully reaches its target at one of the 
facilities, and within an extraordinarily short time, uses the highly-
enriched uranium (HEU) to create an improvised nuclear bomb on site 
(known as an Improvised Nuclear Device, or IND). It only takes a 
critical mass of HEU (about one hundred pounds) to create an IND. To 
put this in perspective, one site alone stores about 400 metric tons of 
HEU. According to Princeton University's Frank von Hippel, ``a 100-
pound mass of uranium dropped on a second 100-pound mass, from a height 
of about 6 feet, could produce a blast of 5 to10 kilotons.'' 
1 The blast from the Hiroshima atomic bomb was about 12 
kilotons, killing over 200,000 people.
---------------------------------------------------------------------------
    \1\ Wald, Matthew L. ``Suicidal Nuclear Threat Is Seen at Weapon's 
Plants,'' New York Times, January 22, 2002.
---------------------------------------------------------------------------
    Why should we care about this? According to the Department of 
Homeland Security, this is exactly what worries them--the detonation of 
a 10-kiloton nuclear bomb would destroy everything within half a mile 
and contaminate 3,000 square miles of land. The nuclear weapons complex 
creates these homeland security vulnerabilities right here at home.
    By far, the most successful Abraham initiative was the re-
examination of the Design Basis Threat (DBT), or security standards. 
Under the new DBT, security forces will be required to repel more than 
three times the number of attackers than they were required to protect 
against prior to 9/11. Furthermore, it will be assumed that adversaries 
will be using far more lethal weapons and much larger truck bombs than 
had previously been considered. Yet the new standards will not be fully 
implemented until 2008--seven years after 9/11.
    While there were very significant improvements to the Design Basis 
Threat, the follow-through on the other initiatives, for the most part, 
is tepid at best. For the sake of brevity, the rest of my testimony 
will only focus on what we consider the most urgent initiatives that 
need your immediate intervention.
    Some key weapons facilities, including Los Alamos' TA-18 and 
Lawrence Livermore National Lab, will not be able to protect against 
the new threat level no matter how much money is spent. Removing all 
Special Nuclear Materials from those facilities eliminates security 
vulnerabilities at those facilities while dramatically decreasing 
security costs.
                 los alamos national lab's (lanl) ta-18
    Widely recognized as the most vulnerable site in the nuclear 
weapons complex, TA-18 is scheduled to be de-inventoried of weapons-
grade nuclear materials by the end of September 2005. It is worth 
noting that in 2000 then-Secretary Bill Richardson had ordered the 
facility to be de-inventoried by the end of 2004, but somehow Los 
Alamos was able to ignore him. Currently, LANL is pushing to continue 
activities at TA-18, further postponing the move at least six months. 
POGO has been told that despite promises from the Lab that they will 
meet the schedule--this can not happen as long as these activities 
continue to be performed there. In addition, much of the material will 
be stored at the Los Alamos' Technical Area 55 for an unknown period of 
time. Security costs are beginning to mount, as the delays continue.
    POGO recommends that NNSA honor the former Secretary's initiative, 
and halt these experiments so that the material can be moved to the 
Device Assembly Facility at the Nevada Test Site on schedule.
                    lawrence livermore national lab
    Another of former Secretary Abraham's May 2004 initiatives was to 
review the necessity of maintaining Livermore's Special Nuclear 
Materials. This initiative has stalled completely. I think I know why. 
Just one month prior to Abraham's speech, NNSA Director Linton Brooks 
testified before the House Government Reform Committee that he opposed 
suggestions of de-inventorying Livermore, and in fact, the NNSA has 
proposed doubling Livermore's plutonium to 1,500 kilograms.
    Roughly seven million people live within a 50 mile radius of the 
Livermore Lab. Many residential homes now exist across the street from 
the Lab's fence line, and new townhouses with mini-vineyards are being 
built along the edge of the fence line. These homes sit only 800 yards 
from the Superblock, which houses the Lab's plutonium.
    Surprisingly, the protective forces at Livermore are issued less 
lethal weapons than protective forces at other sites that store Special 
Nuclear Material.
    POGO recommends removing all weapons-grade plutonium and highly-
enriched uranium from Livermore. If Livermore continues to need some 
amount of this material for its mission, the required material should 
be stored at the Device Assembly Facility in Nevada, only an hour's 
plane ride away. Livermore scientists who need to work with the 
material can travel there to conduct research, something they did for 
years during the nuclear testing program.
       highly-enriched uranium materials facility (heumf) at y-12
    Until four years ago, while Lockheed Martin still managed Y-12 near 
Oak Ridge, Tennessee, there were plans to build an underground or 
bermed storage facility. Virtually all modern storage facilities are 
underground, including the Device Assembly Facility (DAF) and KUMSEC at 
Kirtland Air Force Base. An underground facility would be much harder 
to penetrate and would serve as a greater deterrent to terrorists. U.S. 
Special Operations Command personnel have told POGO that an above-
ground facility is a substantially more vulnerable design and that the 
underground option is the only credible one. Yet the current 
contractor, BWXT, changed the plan to build an underground or bermed 
facility to that of an above-ground facility.
    The Department is currently breaking ground for the above-ground 
building known as the Highly-Enriched Uranium Materials Facility 
(HEUMF) to store the plant's hundreds of tons of HEU. The DOE Inspector 
General has criticized the design and cost of this new building, 
concluding that it will cost more and be less secure than the original 
plan for a bermed (partially underground) facility.
    In 2004, Sandia National Lab was asked by NNSA to evaluate the 
HEUMF plans. It was ultimately Sandia's approval of this design that 
persuaded DOE Headquarters to give the green light for the above-ground 
building. POGO has learned, however, that the Sandia study never made a 
comparison of the HEUMF design to an underground or bermed design, 
explaining in the small print they did not want to have to consider an 
entire redesign for the building. Ironically, it was an earlier Sandia 
study that had recommended using existing designs from two other 
government-owned underground facilities to solve the Y-12 storage 
problem.
    There are also plans to build a second building identical to the 
HEUMF to house the manufacturing of weapons parts from HEU. It is a 
poor security practice to create two targets, and inefficient at best 
to have two separate buildings between which the materials must be 
transported regularly, creating further risk as well as dramatically 
increasing security costs.
    DOE should immediate stop work on the above-ground HEUMF storage 
facility. NNSA should quickly move to construct an underground or 
bermed facility to store both the non-surplus HEU as well as the new 
modern manufacturing facility. This would result in only one double 
fence line, known as a Perimeter Intrusion Detection Assessment System 
(PIDAS), for both operations, as well as provide substantially better 
security against terrorist attack. A modified DAF design could 
accommodate both functions.
              downblend additional highly-enriched uranium
    In his May 2004 speech, then-Secretary Abraham proposed the 
downblending of 100 additional metric tons (beyond the surplus 174 
metric tons) of Y-12's surplus highly-enriched uranium. The disposal of 
excess HEU is essential so that these materials no longer create an 
unnecessary homeland security vulnerability. In addition, downblending 
the HEU will significantly help in reducing the enormous costs 
associated with protecting these materials.
    However, according to DOE officials, the initial program review of 
HEU stockpiles across the complex initiated by former Secretary Abraham 
was stymied by complaints from the Office of Naval Reactors, a nearly-
autonomous arm of the DOE, claiming they may need it some day for their 
reactors. The long-held territorialism by Naval Reactors dates back to 
its origins under Admiral Hyman Rickover, and presents a formidable 
bureaucratic hurdle to the downblending of HEU. Currently Y-12 alone 
stores over 400 metric tons of HEU.
    DOE does not seem to have the stomach to live up to its promises. 
The United States has only downblended 34 of the 174 metric tons 
already declared excess. The remaining downblending it is not scheduled 
for completion until 2016 or beyond.
    POGO recommends dramatically speeding up the current downblending 
schedule, and affirming former Secretary Abraham's initiative of 
increasing the amount of HEU declared excess by another 100 metric 
tons.
             review complex for consolidation opportunities
    Former Secretary Abraham also encouraged consolidating nuclear 
materials: ``Ultimately, I believe we need to both reduce the number of 
sites with Special Nuclear Material to the absolute minimum, consistent 
with carrying out our missions, and to consolidate the material in each 
of those sites to better safeguard that material.'' He asked NNSA 
Director Brooks to head up a study of consolidation options. I 
understand that this study is just beginning to get underway--nine 
months after the initiative was assigned to NNSA. POGO decided not to 
wait for them. We are in the final stages of preparing a report with 
recommendations of shrinking the number of facilities across the 
country that house Special Nuclear Materials from thirteen sites to 
seven, at a cost savings of nearly $3 billion over three years.
                               conclusion
    I would be remiss if I did not report to the Committee that, while 
not a part of former Secretary Abraham's initiatives, the treatment of 
whistleblowers throughout the complex remains abysmal. Retaliation 
remains the norm, not the exception, as can be seen in the case of 
Tommy Hook and Chuck Montano, who have both worked at Los Alamos for 
decades. After the Committee's three hearings on financial fraud at Los 
Alamos, the University of California was telling the public that all 
was resolved, while at the same time retaliating against these two men 
who knew otherwise. Hook and Montano were responsible for providing 
audit support for UC and uncovered ongoing irregularities and outright 
misconduct amounting to millions of taxpayer dollars. Their audit 
reports were withheld from DOE. Their treatment? Their work was taken 
away from them, they were given no work for nine months, and now they 
are only being handed menial assignments. Even the head of the Los 
Alamos Site Office tried to intervene on Tommy Hook's behalf, only to 
be rebuffed by an arrogant University of California. Under the current 
system, DOE contractors have NO incentive to treat whistleblowers 
well--as all their legal fees are reimbursed by the federal government.
    The Department of Energy does not need new offices such as the 
NNSA's new Office of Performance Assurance, new commissions, or new 
studies. The DOE needs to follow through on its existing commitments. 
Safety and Security Performance Assurance Director Glenn Podonsky is 
keeping tabs on the progress of these initiatives, and is noting where 
there is no progress at all. His office's Site Assistance Visits are 
providing new insights into important consolidation opportunities. The 
Committee should remain apprised of this ongoing work. But even with 
the strongest leadership from the Secretary's office, the only way 
these initiatives will be enacted is with your continued vigilance. 
DOE's history has shown that without pressure from Congress and 
specifically from this subcommittee, these initiatives will likely 
fail.

    Mr. Whitfield. Well, thank you, Ms. Brian, for reminding us 
of that. Would you please explain to me the Project on 
Government Oversight? How old is the Project on Government 
Oversight, and how is it funded and so forth?
    Ms. Brian. We were created in 1981. At the time we were 
actually the Project on Military Procurement, working with 
people inside the Pentagon who were concerned about wasted 
money as well as weapons that were not working adequately.
    We expanded our focus and changed our name in 1990 to the 
Project of Government Oversight. We work with whistleblowers 
and other people inside the system who work with us on an 
unclassified basis to get us information that needs to get out 
to improve the way the Federal Government operates.
    We take no money from the government, no money from 
corporations, and no money from unions.
    Mr. Whitfield. And you have an expertise in nuclear 
security, I take it?
    Ms. Brian. No. Actually, I am a good government person who, 
at this point, has been working on this issue for 5 years, so I 
feel I have developed it over time.
    Mr. Whitfield. Absolutely. Now, in your testimony you made 
a reference to Mr. Brown. Do you feel like Mr. Brown was 
retaliated against by the University of California?
    Ms. Brian. I know my colleagues at the Government 
Accountability Project, who are working on his case, very 
strongly feel that way. I must say I am not as familiar with 
the details of his case.
    Mr. Whitfield. You also made the comment in here that there 
is an insular environment in which people coming into the DOE 
and particularly the NNSA bring with them their biases in favor 
of the status quo. Now, why do you make a statement like that?
    Ms. Brian. Well, if you look at the people who will leave 
the NNSA, you see them showing up at the lab; and then you see 
the people leaving the labs and showing up at NNSA. It is not 
unique, of course. It happens around the government. But I have 
really never seen it as regularly as I have seen it with this 
particular universe.
    Mr. Whitfield. You made the comment also that it is the 
normal practice that the government will pay legal fees for the 
contractor in the event of a whistleblower lawsuit; is that 
correct?
    Ms. Brian. It is in the case of the Department of Energy 
contractors. That is not the case across the government. It is 
unique to the Department of Energy. And there have been some 
legislative initiatives to change that, which I would encourage 
further consideration and passage. It just creates a terrible 
incentive.
    Mr. Whitfield. Right. It is my understanding that in the 
energy bill, which this committee will be taking up soon, that 
we are going to try to change that.
    Ms. Brian. I think that would just really change the 
dynamics for whistleblowers.
    Mr. Whitfield. Right.
    Well, I genuinely appreciate your being with us this 
morning, and we certainly have read your testimony.
    At this time I will recognize Mr. Stupak for any questions 
he might have.
    Ms. Brian. Thank you.
    Mr. Stupak. Thank you, Mr. Chairman.
    And thank you for testifying.
    Have you seen Mr. Brown's paper, the 22 pages?
    Ms. Brian. I have not, I'm sorry.
    Mr. Stupak. Do you know him at all, from his work at the 
labs?
    Ms. Brian. I do know we had brief conversation with him. He 
was already working with the Government Accountability Project, 
and I felt he was in good hands.
    All of our organizations are short-staffed. I know he has 
good people working with him, and we have other people we need 
to help.
    Mr. Stupak. I understand. I have asked the other witnesses, 
and it is fair to ask you, what do you feel are the most 
important issues that we really need to address right now? You 
mentioned TA 18, and that was supposed to be done in 2004, now 
in 2008, but is that the most pressing thing you see?
    Ms. Brian. Clearly that was the site we had focused most 
attention on over the past few years. I think that we are 
coming to closure on that one. It has taken, as I think someone 
mentioned, perhaps it was you--it was actually Secretary 
Abraham that began this--I'm sorry, Secretary Richardson, 
trying to get that place closed.
    I think, honestly, the most important thing now is for 
there to be two things. One is the consolidation review. There 
needs to really be consideration of why there are still 13 
sites. Even assuming TA 18 closing, and Sandia, and far too 
long, in our opinion, from closing, you still have a number of 
sites out there that should not continue to house these nuclear 
materials. So shrinking the complex will help to address the 
extraordinary cost that is being caused by the increase in the 
Design Basis Threat.
    The other part of that that I think is critical is really a 
move to down-blend the HEU. It is stalled, that initiative, 
again, and that will help to reduce the cost to store this.
    Mr. Stupak. From your testimony, I get the impression that 
whether it is Secretary Richardson or Abraham, they both had 
some good suggestions, but those suggestions went out to the 
labs and just sort of never went anywhere. Is that a fair way 
of saying it?
    Ms. Brian. And part of that is what you asked, actually the 
other Congressman asked earlier, which is this revolving door, 
because you have the people at headquarters who are all coming 
from the labs who don't want this change. Every lab wants to 
keep all the materials there. Livermore does not want to give 
up their materials.
    Mr. Stupak. Sure.
    Ms. Brian. So unless you have some new ideas and people who 
aren't beholden to the old system, that is why we are going to 
keep seeing this push back.
    Mr. Stupak. You said this Congress, this committee, this 
subcommittee in particular, should keep on this to make sure 
that reforms take place, whether it is consolidation or TA 18. 
But more than this committee, doesn't that really lie with the 
Department of Energy? Isn't it their responsibility?
    Ms. Brian. Of course it's their responsibility to provide 
the leadership. As you see, however, Secretary Abraham laid 
out, this is what I want to have done. I have learned over time 
that a secretary--it seems extraordinary to say this, but a 
secretary of a department doesn't necessarily have the power to 
make his department do what they do not want to do, and they 
typically have a shorter time in office than Members of 
Congress. So I think the bureaucracies just wait out the 
political appointees.
    Mr. Stupak. We feel that way, too, at times, believe me.
    TA 18. Do you believe that that move could be expedited 
before 2008? Do you think that could be done by the end of 
2006, at the most?
    Ms. Brian. Well, the schedule is actually currently for the 
end of fiscal year 2005, and my understanding----
    Mr. Stupak. They are just moving to another building.
    Ms. Brian. To TA 55; correct.
    Mr. Stupak. Then they are to go to Nevada with it. And they 
are shipping things, and you have to handle it. I would think 
if you are shipping from TA 18 to building number 55, and then 
to Nevada, you are shipping it, packaging it and shipping it 
twice, so you could really--I'm just trying to figure out this 
delay.
    As I said earlier in my statements, it has been 10 years 
when we talk about TA 18. I have been on this committee 10 
years.
    Ms. Brian. Exactly. I am worried about the plans to keep it 
at building 55 because its feels like it is Los Alamos' efforts 
to keep it onsite and then hope people will forget about TA 18 
and the plans to move it, as tends to happen, and then they 
will be able to maintain it there.
    I still don't understand why all the facilities feel almost 
an emotional attachment to keeping the materials; that they 
just can't say, let's go, let's move it somewhere where it is 
more secure.
    Mr. Stupak. Thank you. I have no further questions. Mr. 
Chairman. Thank you.
    Mr. Whitfield. Dr. Burgess.
    Mr. Burgess. I will pass on the questions, Mr. Chairman.
    Mr. Whitfield. Mr. Walden.
    Mr. Walden. I yield, Mr. Chairman, on the questions.
    Mr. Whitfield. Well, I'm shocked, no more questions.
    Ms. Brian, thank you so much for your testimony and for 
taking the time to be with us. As I stated earlier, we are 
going to go in a recess now and reconvene in room 2218 for a 
closed session.
    It is now 1 o'clock, so I think we will reconvene in room 
2218 at 1:15. That will give people about 9 or 10 minutes. With 
that, we stand in recess.
    [Whereupon, at 1:05 p.m., the subcommittee recessed to 
proceed in closed session.]