[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


                                                                      ?

                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
                  PETER J. VISCLOSKY, Indiana, Chairman
 CHET EDWARDS, Texas               RODNEY P. FRELINGHUYSEN, New
 ED PASTOR, Arizona                Jersey
 MARION BERRY, Arkansas            ZACH WAMP, Tennessee
 CHAKA FATTAH, Pennsylvania        MICHAEL K. SIMPSON, Idaho
 STEVE ISRAEL, New York            DENNIS R. REHBERG, Montana
 TIM RYAN, Ohio                    KEN CALVERT, California
 JOHN W. OLVER, Massachusetts      RODNEY ALEXANDER, Louisiana
 LINCOLN DAVIS, Tennessee
 JOHN T. SALAZAR, Colorado             

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
              Taunja Berquam, Robert Sherman, Joseph Levin,
            James Windle, and Casey Pearce, Staff Assistants

                                ________

                                 PART 6
                      OVERSIGHT AND MEMBER REQUESTS
                                                                   Page
 Oversight Hearing on the Corps of Engineers' Hurricane Recovery 
Efforts...........................................................    1
 Oversight Hearing on the Department of Energy Project Management.   51
 Oversight Hearing on the Nuclear Weapons Complex.................  153
 Member Requests Hearing..........................................  285

          

                                ________

         Printed for the use of the Committee on Appropriations


                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
                  PETER J. VISCLOSKY, Indiana, Chairman


 CHET EDWARDS, Texas               RODNEY P. FRELINGHUYSEN, New
 ED PASTOR, Arizona                Jersey
 MARION BERRY, Arkansas            ZACH WAMP, Tennessee
 CHAKA FATTAH, Pennsylvania        MICHAEL K. SIMPSON, Idaho
 STEVE ISRAEL, New York            DENNIS R. REHBERG, Montana
 TIM RYAN, Ohio                    KEN CALVERT, California
 JOHN W. OLVER, Massachusetts      RODNEY ALEXANDER, Louisiana
 LINCOLN DAVIS, Tennessee
 JOHN T. SALAZAR, Colorado             

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
              Taunja Berquam, Robert Sherman, Joseph Levin,
            James Windle, and Casey Pearce, Staff Assistants

                                ________

                                 PART 6
                      OVERSIGHT AND MEMBER REQUESTS
                                                                   Page
 Oversight Hearing on the Corps of Engineers' Hurricane Recovery 
Efforts...........................................................    1
 Oversight Hearing on the Department of Energy Project Management.   51
 Oversight Hearing on the Nuclear Weapons Complex.................  153
 Member Requests Hearing..........................................  285


                                ________

         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 50-065                     WASHINGTON : 2009


                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 JOHN P. MURTHA, Pennsylvania           JERRY LEWIS, California
 NORMAN D. DICKS, Washington            C. W. BILL YOUNG, Florida
 ALAN B. MOLLOHAN, West Virginia        HAROLD ROGERS, Kentucky
 MARCY KAPTUR, Ohio                     FRANK R. WOLF, Virginia
 PETER J. VISCLOSKY, Indiana            JACK KINGSTON, Georgia
 NITA M. LOWEY, New York                RODNEY P. FRELINGHUYSEN, New  
 JOSE E. SERRANO, New York              Jersey
 ROSA L. DeLAURO, Connecticut           TODD TIAHRT, Kansas
 JAMES P. MORAN, Virginia               ZACH WAMP, Tennessee
 JOHN W. OLVER, Massachusetts           TOM LATHAM, Iowa
 ED PASTOR, Arizona                     ROBERT B. ADERHOLT, Alabama
 DAVID E. PRICE, North Carolina         JO ANN EMERSON, Missouri
 CHET EDWARDS, Texas                    KAY GRANGER, Texas
 PATRICK J. KENNEDY, Rhode Island       MICHAEL K. SIMPSON, Idaho
 MAURICE D. HINCHEY, New York           JOHN ABNEY CULBERSON, Texas
 LUCILLE ROYBAL-ALLARD, California      MARK STEVEN KIRK, Illinois
 SAM FARR, California                   ANDER CRENSHAW, Florida
 JESSE L. JACKSON, Jr., Illinois        DENNIS R. REHBERG, Montana
 CAROLYN C. KILPATRICK, Michigan        JOHN R. CARTER, Texas
 ALLEN BOYD, Florida                    RODNEY ALEXANDER, Louisiana
 CHAKA FATTAH, Pennsylvania             KEN CALVERT, California
 STEVEN R. ROTHMAN, New Jersey          JO BONNER, Alabama
 SANFORD D. BISHOP, Jr., Georgia        STEVEN C. LaTOURETTE, Ohio
 MARION BERRY, Arkansas                 TOM COLE, Oklahoma
 BARBARA LEE, California
 ADAM SCHIFF, California
 MICHAEL HONDA, California
 BETTY McCOLLUM, Minnesota
 STEVE ISRAEL, New York
 TIM RYAN, Ohio
 C.A. ``DUTCH'' RUPPERSBERGER, Maryland
 BEN CHANDLER, Kentucky
 DEBBIE WASSERMAN SCHULTZ, Florida
 CIRO RODRIGUEZ, Texas
 LINCOLN DAVIS, Tennessee
 JOHN T. SALAZAR, Colorado          

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)

 
 ENERGY AND WATER DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2010

                              ----------                              

                                        Tuesday, February 24, 2009.

          DEPARTMENT OF THE ARMY, U.S. ARMY CORPS OF ENGINEERS

                               WITNESSES

LIEUTENANT GENERAL ROBERT VAN ANTWERP, CHIEF OF ENGINEERS
    Mr. Visclosky. I would like to bring the committee to 
order, and, as the first order of business, would want to 
particularly general note--and this is beyond any of our 
control, and we all face these circumstances--is at least Mr. 
Olver and myself have our attendance required at the Rules 
Committee on the omnibus package. And so I would believe Mr. 
Edwards will take over the Chair and we will work from this, 
not out of disinterest and certainly not out of disrespect that 
we find ourselves here.
    General Van Antwerp. I understand.
    Mr. Visclosky. Before we do begin, I want to welcome back 
my good friend and our colleague Mr. Frelinghuysen from New 
Jersey. We both serve on the Defense Subcommittee together. He 
has served on this subcommittee in past years and he will now 
serve as Ranking Member, and look forward in the sense that the 
subcommittee has always acted in a very professional 
nonpartisan perspective, have tried to work through the many 
problems that we face, whether it is water or energy together, 
and again would anticipate that that is certainly going to 
continue. I really appreciate having you back.
    I also have three new members to the subcommittee. I would 
want to introduce them to everyone. First of all, Rodney 
Alexander who is from the great State of Louisiana and attended 
Louisiana Tech University and also served in the Air Force 
Reserve. I would point out that Mr. Frelinghuysen is also a 
veteran of the United States Army, if I am correct.
    Mr. Frelinghuysen. Two Rodneys on the committee, too.
    Mr. Visclosky. There you go.
    We also have John Salazar who attended Colorado State 
University and Adams State College and is also a veteran of the 
United States Army. And we are very happy to have John with us.
    And anticipating that most of the money in the subcommittee 
will now go to the State of Tennessee, would welcome Lincoln 
Davis as well, who attended Tennessee Tech University, and also 
is a former mayor, which gives him a soft spot in my heart 
because that is what my dad did during one part of his life.
    And I simply mention all of the educational institutions 
these gentlemen went to. Mr. Frelinghuysen attended Hobart 
College as well as Trinity College. I think they have all 
within the last year or two beaten Notre Dame in football.
    Mr. Simpson. Who hasn't beat Notre Dame in football?
    Mr. Visclosky. And the people who do so much good work, and 
just as we caucused before we came in, Mr. Frelinghuysen and 
others noted we do have an exceptional staff. And at the outset 
of this fiscal year in Congress would want to again point all 
of them out.
    First of all we do have our clerk Taunja Berquam who served 
as our clerk last year and is our clerk in the 111th Congress 
and has done a wonderful job; Terry Tyborowski, who is a 
veteran on the subcommittee and deals with renewables, 
environmental management cleanups, fossil and the nuclear 
programs. We have Bob Sherman who is continuing to be with us 
and is very focused on the nonproliferation and weapons 
program. A new addition on the administrative aide is Casey 
Pearce, who is a graduate of Brown University. He said he liked 
the color but also apparently is a very smart guy. Lauren 
Minto--thank you very much. I just was looking for one laugh. 
Lauren Minto is still with us as a detailee from the Corps and 
is helping us get over the hump here with the omnibus package 
in the 2009 legislation. And someone who has also been with us 
and done an exceptional job is Rob Blair who is a graduate of 
Cornell and the Fletcher School. Rob is here. And as I also 
pointed out during the caucus, you might congratulate him with 
a round of applause. He is a reasonably new father, with a 
daughter born on December 8.
    And also a welcome addition to the subcommittee, although 
not new to the Appropriations Committee, has by and large 
served for the last 5 years on the Defense Subcommittee, Kevin 
Jones. Kevin joins us and has attended James Madison University 
and will deal with, among other issues, nuclear waste, energy 
efficiency and renewables, and has two young children, a 3-
year-old daughter and a 2-year-old son.
    The final introductions and then we will get on is Shari 
Davenport, who remains as my associate staff. Katie Hazlett who 
is with us is associate staff for Mr. Frelinghuysen.
    And with that, I would continue now with my opening 
statement.
    We have before us the Chief of Engineers, Lieutenant 
General Robert Van Antwerp. He is here today along with several 
members of his staff to provide the subcommittee an update on 
the Corps' recovery efforts in southeastern Louisiana and 
specifically the New Orleans area.
    As we all remember, Hurricane Katrina made landfall on 
August 29, 2005, in southeast Louisiana and southwest 
Mississippi and caused one of the largest natural disasters in 
American history. Since that time, Congress has provided more 
than $14 billion to the Corps to repair and improve the 
southern Louisiana hurricane protection system. This is a large 
sum of money, even in the context of today's discussion of 
economic recovery funding, and far in excess of the $3.5 
billion originally estimated. I understand, General, that the 
initial cost estimates were considered order of magnitude.
    However, there is now speculation that we should anticipate 
further cost escalations on the order of $500 to $800 million. 
With the passage of more than 3 years, the excuses of early on-
the-back-of-an-envelope estimates certainly are now gone.
    What we, among other interests, have today is whether or 
not we have nailed down final cost figures and management 
issues that were evident in early issues and those that seemed 
to have remained through all of the many reviews of the Corps 
were even as late as December 2007.
    In the subcommittee's hearing of our fiscal year 2009 
budget, I expressed my frustration that we are spending nearly 
three times the annual budget of the Corps in one geographic 
region of the United States. I will reiterate that my concern 
in no way diminishes the tragedy or commitment to rebuild New 
Orleans. I only hope that the new administration will learn the 
lessons of the Gulf Coast hurricanes and the Minnesota highway 
bridge collapse. That lesson was simple: Invest today and you 
can eliminate the need for costly emergency needs tomorrow.
    It is my hope that through the recovery funding provided to 
the Corps in the fiscal year 2009 appropriations we can make 
progress in ensuring that another tragedy does not result from 
underinvestment in our infrastructure.
    General, we may have some follow-up questions for the 
record. I would ask that you expedite the response to those 
questions. All members who would have additional questions for 
the record must have them submitted to the subcommittee offices 
by 5:00 p.m. today.
    And with those opening comments, I certainly am pleased to 
recognize Mr. Frelinghuysen for any comments he has.
    Mr. Frelinghuysen. Thank you, Mr. Chairman. Before I begin, 
I would like to say how happy I am to be back on this 
subcommittee. I was on the committee for a dozen years and then 
went on to be Ranking on Commerce, Justice in the science 
portfolio, and I know I can say on behalf of all committee 
members, we have always appreciated the bipartisan approach, 
truly amicable relationship that you had with my predecessor 
David Hobson and I know we will continue that approach. I know 
you had your differences on opinion and policies, but they 
never came between you as legislators and representatives of 
your constituents. And I am looking forward to carrying on your 
tradition.
    I would also like to welcome Lieutenant General Robert Van 
Antwerp before the subcommittee. General, the Corps is in 
desperate need of good leadership, and I am pleased that you 
are still in your role. And may I say, I hope and trust that 
you won't be leaving anytime soon.
    Hurricane Katrina still looms large in the memories of many 
Americans, even those who have never been to New Orleans. 
Perhaps no other event has grown in the human psyche to 
represent the human tragedy that can result from natural 
events.
    Unfortunately, the words Hurricane Katrina also bring to 
mind empty trailers, bureaucratic mismanagement, suspicions of 
waste, fraud and abuse of billions of taxpayers' dollars. I 
hope that is not the story we are going to hear today. I am 
confident it is not.
    Since the last days of 2007, as the Chairman has pointed 
out, Congress has appropriated more than $14.45 billion to 
rebuild and improve the system that was supposed to protect the 
city of New Orleans. We know now that that system that was in 
place at the time of Katrina wasn't an integrated system at 
all, but a poorly coordinated patchwork of defenses that were 
bound to fail.
    The improved hurricane protection system is supposed to fix 
all of that. It is supposed to be a true system, pulling all 
the parts together into a coordinated defense against a 
hurricane that should only happen once in every 100 years. But 
the truth, as usual, is a little more complex. No matter how 
high the levees, the possibility of a larger hurricane exists; 
let's be blunt. And New Orleans is still below sea level, 
surrounded by water on three sides. There is a risk inherent in 
just living there. I am still wrestling with the proper role of 
the Federal Government in protecting New Orleans. The city is 
an American treasure and its people have the right to expect 
reasonable protection from natural events. Yet there must not 
be any impression of a Federal guarantee to live anywhere, 
local authorities must ensure that people not build 
irresponsibly, or, if they do, it is at their own risk, not 
that of the Federal taxpayer.
    I hope we will hear today about how local authorities--I 
think this is important--are coordinating with the Corps on 
these critical issues. It is absolutely essential.
    With that, Mr. Chairman, I would like to welcome the 
general again to this subcommittee and I am looking forward to 
hearing his testimony and learning more about the Corps' work. 
And thank you, Mr. Chairman.
    Mr. Visclosky. Thank you. General, if you would proceed. 
And your entire statement will be entered into the record.
    General Van Antwerp. Thank you, sir.
    Mr. Chairman, members of the subcommittee, it is a pleasure 
to be with you today.
    If you will allow me, Mr. Chairman, I would like to make a 
couple of introductions of the people behind me here so you 
know who the players are. Off to my left, your right, is Major 
General Bo Temple. Bo is the Deputy Commanding General for 
Civil and Emergency Operations, meaning he overwatches the 
civil works piece. And if there is a disaster anywhere in the 
world or country that we go to, he is heading that effort up 
and would be one of the first ones out the door to go there. So 
Major General Bo Temple.
    Off to my right here, this is Brigadier General Mike Walsh. 
Mike is the Commander of the Mississippi Valley Division. The 
division has six districts going all the way from the Canadian 
border, St. Paul, all the way down to New Orleans.
    And next to him is our SES on the ground, Karen Durham-
Aguilera. She runs what we call Task Force Hope. So as we talk 
about those different terms today, you can see what our command 
and control structure is down there.
    In addition, there are two other Colonels and they are not 
here today. But one is Colonel Al Lee. He is the District 
Commander for the New Orleans District. And the other one is 
Colonel Mike McCormick. He is the Commander of the Hurricane 
Protection Office.
    So in New Orleans we have Karen, who is Task Force Hope; 
and then we have the District Commander and we have the 
Hurricane Protection Office. Those three offices are the ones 
that are getting this mission done down there.
    So it is my pleasure to be with you today. I want to thank 
you for this opportunity. I am going to talk about our 
reconstruction, our restoration and our improvement efforts for 
the hurricane storm damage risk reduction system. I would like 
to say, you will not hear me say ``protection'' today because I 
think as we look at this system, it was acknowledged, there is 
always something larger that Mother Nature could do. So you are 
not ever protected.
    What we are doing here is reducing risk. We measure that 
risk in terms of probability of an event. And so where we are 
headed, the operational goal here is by 2011 hurricane season, 
June 2011, that we will have 100-year protection. That means a 
1 percent chance in a year that we would have a storm of 
magnitude that it would exceed the design of what it is for 
this.
    I know there may be discussion on categories versus this 
100-year protection. For categories, Hurricane Katrina was a 
Category 2. Hurricane Gustav was a Category 2. And yet their 
effects were a lot different, the major difference being the 
surge associated with them. That is why it isn't sufficient 
just to say, Category 2 or 5 or whatever. There are so many 
other factors. The surge of Katrina in some places was up to 32 
feet. The surge in Gustav was 12 feet. A much different result, 
similar winds, similar category. So just clarify that.
    I have put a map in front of all your seats, and many of 
you have been down there. We are going to talk about miles of 
levees and many other features. And we won't point all of these 
out.
    General Van Antwerp. But I also wanted you to see this is 
the map that we presented to the public as we approached 
hurricane season 2008. It will be updated for 2009 as we get 
close to June. But I wanted to give you an example of the 
products and then a little bit on the keys of this so you can 
see.
    If you go to the lower left-hand corner of the map, you 
will see an assessment guide in different colors there, which 
correspond to the colors on the system. So if you see red as 
you do over near the Lake Borgne area, near the Gulf 
Intercoastal Waterway, going to the GIWW and the Inner Harbor 
Navigation Canal, you can see that is red. And that means most 
vulnerable area.
    When Gustav hit, Gustav came right up the pipe, right from 
Lake Borgne and right in there when you saw Geraldo Rivera 
filming, standing behind a flood wall that had water at 11.6 on 
the 12-foot flood wall. That was in the inner harbor in that 
area right there, still most vulnerable. The yellow means 
doesn't meet the 100-year protection criteria, but less 
vulnerable. And, finally, 100-year protection established.
    This year we will have pieces of this, lord willing, and as 
our construction comes through, that will be green. And as we 
progress to the 2011 time frame, most of this will be green 
unless it is a portion of it like the internal drainage that 
won't be 100-year. But we will have 100-year protection. I will 
explain that a little more.
    The only other thing I would point out here, if you go to 
the red area and look right where it says Mississippi River 
Gulf Outlet, kind of on the line that goes from the upper left 
to the lower right, you will see three blocks of numbers. If 
you have your reading glasses on, like me, you can see it says, 
the blue says 16 to 17 feet. That was the pre-Katrina height of 
that area. And the 19.5 to 21.6 is the current elevation. And 
then the elevation when we have 100-year protection is 26.5 to 
28. So what this does, it shows you there has been a tremendous 
amount of work because Congress, right after Katrina, you 
responded; 220 miles of these levees are stronger and more 
resilient than they were pre-Katrina. So there is more risk 
reduction right now, but not at the 100-year level.
    The risk reduction system includes 350 miles. What you see 
on this map is about 220 miles of it. There are also some non-
Federal levees that go down into Plaquemines Parish and 
Terrebonne Parish that aren't shown on this particular map 
which includes flood walls, four navigable gated structures, 73 
pump stations, and numerous other structures. The threat of the 
100-year storm surge is being addressed through improvements to 
the perimeter of the existing Lake Pontchartrain and Vicinity 
and West Bank and Vicinity projects. So that is how we have 
portrayed this. What is in the West Bank and Vicinity project 
is that which really looks south of the Mississippi River, if 
you will. But they call that the West Bank. And the other part 
is Lake Pontchartrain and Vicinity.
    There is also an interior drainage system which provides 
for the removal of rainfall that is being addressed through 
improvements to the Southeast Louisiana Urban Flood Damage 
Reduction Project. We call that SELA. And SELA is designed 
right now for a 10-year rainfall event. So you will see even 
with the 100-year protection, when it rains and severely rains, 
it will handle about a 10-day event internal.
    A major feature of the work we are doing in Louisiana 
includes erecting surge protection barriers. And I will just 
point out on your map, if you look at it again, off to the 
right where the red comes to a v, there is a dotted line there. 
That is the Inner Harbor Navigation Canal surge reduction 
barrier, or oftentimes referred to as Lake Borgne. It will be 
the largest, most complex surge barrier ever constructed in the 
world. And we have been to foreign countries that have a lot of 
people with my namesakes, with Van in front of their names; 
this is the largest in the world. Very complex. And we will 
talk about the cost of that as we go further.
    We have already replaced the deficient I walls with 
stronger T walls. We have made repairs to existing pumping 
stations, storm-proofing pumping stations, and we are improving 
the interior drainage of the system. The authorized and funded 
work also includes incorporating Plaquemines Parish non-Federal 
levees in the existing New Orleans to Venice Hurricane Risk 
Reduction Project and improving levees in Terrebonne Parish.
    In addition, ecosystem restoration and higher levels of 
storm risk reduction measures are also being studied for 
coastal Louisiana as part of the authorized Louisiana Coastal 
Area program and ongoing Louisiana Coastal Protection 
Restoration study.
    Today we are more than one-third done with the construction 
on the improved system. It is already stronger and more 
resilient, as I said, than at any time in the history of this 
system. Extensive modeling, lessons learned and risk-informed 
processes have enhanced our design criteria and on-the-ground 
construction.
    As you can imagine, the contracting effort for this is 
massive. I am proud to say we have already awarded over 170 
contracts. When we are finished with this, there will be over 
350. So we are at 170 contracts awarded of 350. The amount of 
obligation to date has been $3.5 billion.
    We are cognizant also of the opportunities of this project 
to contribute to small business development, and so we have our 
eye on that. Our small business obligations have been about 
$1.2 billion thus far. That is a great news story.
    With the assistance of the Federal Coordinator for Gulf 
Coast Rebuilding and in close partnership with Governor Jindal, 
we have signed all three of our major project partnership 
agreements with the State of Louisiana to proceed with 
construction. So all things are green in that category. We have 
also signed all deferred payment agreements with the State that 
extend the State's payments for the cost-shared portion of the 
work over a 30-year period. The State's estimated cost share is 
$1.83 billion, of which $330 million is the real estate 
acquisitions and $1.5 billion is for the State's required cash 
contributions that will be made at the 30-year period. Because 
of this deferred payment agreement, $1.5 billion of the $14.3 
billion--that is the Federal funds appropriated--covers that 
$1.5 for this program. So the non-Federal cash requirement is 
contained in the $14.3 billion.
    We have implemented a robust independent external peer 
review of the hurricane storm damage reduction system. This 
includes the overall design criteria and their application 
during design and construction, the armoring manual and the 
quality management plan. The most complex projects will receive 
additional peer review during design and construction.
    To allow for the safe and continued operation of internal 
drainage system during hurricanes and storm events, we 
constructed five new safe rooms for pump station operators and 
added storm-proofing in Jefferson Parish. We completed 32 pump 
station repairs for a total of more than $35 million. We 
awarded contracts for 13 pump station repairs in Plaquemines 
Parish for more than $14 million. We are currently working on 
development of an overarching agreement that would address the 
remaining storm-proofing in Jefferson and Orleans Parishes. We 
have awarded all five Harvey Canal flood wall contracts 
totaling about $340 million. No Federal protection previously 
existed along the east side of Harvey Canal. On your map that 
is kind of in the lower center where you will see the Harvey 
Canal connecting to the Intercoastal Waterway, which is the 
yellow line depicting that it does not yet meet the 100-year 
protection. About 3.5 miles of flood walls and one mile of 
levee will be constructed along the eastside of the Harvey 
Canal. We expect this work to be completed by 2010. Just this 
month we completed rebuilding three pump stations in St. 
Bernard's Parish, $20 million.
    In order to reach out to stakeholders and inform our 
decision making with the public, the Corps has hosted more than 
100 public meetings for this project. And that is ongoing. We 
want to be transparent in our communications and we want to 
transparently convey the risk. We have what is essentially a 
Google Earth ability where you can go in and type in your 
address, and you can find out for various storm events what the 
inundation would be on your property. It has been a great tool 
to have transparent communications.
    During Hurricanes Gustav and Ike, we coordinated with the 
sewage and water boards of New Orleans to close the gates at 
the interim waterways structures. The three canals, if you take 
big Lake Pontchartrain and look at the middle of your map, you 
can see the 17th Street Canal, New Orleans Canal and the London 
Avenue Canal. At the end of those canals is where the gates are 
located and where the pumping stations are. We had a surge from 
Hurricane Gustav that required us to lower the gates and to 
operate the pumps. Both things happened flawlessly. It was a 
great test of the system, and they worked flawlessly.
    The year of 2008 saw several major accomplishments. We 
awarded the largest ever Corps design-build contract for the 
Inner Harbor Navigation Canal. It is the surge barrier that we 
talked about in Lake Borgne. Other project features consist of 
250-foot navigable floodgates in a concrete pile-supported 
barrier. Some of these concrete piles will go down 130 feet to 
provide a surge barrier across that entire distance that will 
withstand a surge that puts just enormous pressure.
    It has been a very complex and challenging design to do 
this. This was a design-build contract. When we awarded the 
contract, we had about 5 percent of the design. The rest is 
being done by the contractor. Why? Number one, it took this 
project from being about 5 years to get started to being able 
to get started right away. They are already under construction 
for those pieces that have been designed.
    The other part of it is to take advantage of the innovative 
nature of what our contractors can do. We are very confident 
that we are going to get a wonderful product here and we will 
talk about the cost of it in a minute.
    The first constructed features of this project will provide 
risk reduction for a lot of the areas by this hurricane season, 
which was another real advantage of getting it started. It does 
provide some surge protection. Had that barrier been in there 
for surge protection, you would have not seen the issues that 
were happening during Gustav in the inner harbor. It would have 
damped down that surge.
    Extensive effort in engineering analysis hydraulic modeling 
and simulation exercises with pilots have enhanced the 
navigation safety; we have been working closely with the Coast 
Guard.
    We have recently updated our project cost estimate for this 
surge barrier. In addition to the added features for enhanced 
navigation safety, the other cost drivers were a more robust 
barrier wall to meet design criteria and the nourishment of 705 
acres of marsh performed to meet the Louisiana Coastal Zone 
Management Standards. While the IHNC project requires 
additional funding to complete the work and to meet the 
scheduled commitments, the additional funding requirement can 
be met within the overall program and therefore does not 
require additional appropriations, assuming that we have the 
ability to reallocate funds among features of work.
    We are presently evaluating courses of action for 
reallocating funds to the IHNC project from funds that are 
currently available from within the overall program. We will 
continue to award construction contracts over the next several 
months and remain diligent in the overall cost management of 
this program. Should the reallocation for the IHNC projects 
occur on or before June 1 of this year, we do not anticipate 
that there will be a need for any delay in this project past 
the 2011 operational goal of being ready for hurricane season 
2011.
    Also included in the IHNC surge risk reduction is the Lake 
Pontchartrain floodgate. And you can see that up in the other 
parts, the other dotted red line in Lake Pontchartrain. Interim 
closure structures at the three outfall canals currently 
provide 100-year level of risk reduction.
    Another major feature of the 100-year system is the Gulf 
Intercoastal Waterway west closure complex. And that is along 
in the lower center below the Mississippi River off to the left 
of your map.
    We are continuing construction on nine SELA internal 
drainage projects worth about $110 million, several of which 
are being accelerated to completion under the third 
supplemental. One of the big projects here is the SELA internal 
drainage project.
    We are engaged on several fronts with respect to ecosystem 
restoration and various levels of storm risk reduction measures 
in coastal Louisiana. These activities are conducted under 
numerous authorities and provide for varying levels of 
construction, design and planning. Since Hurricane Katrina, the 
Corps of Engineers has been involved in leading a number of 
simultaneous efforts located on or near the MRGO, the 
Mississippi River Gulf Outlet.
    The comprehensive plan for deauthorization of deep draft 
navigation was completed in 2008. Construction crews are now 
placing over 400,000 tons of rock to complete the MRGO closure 
structure by July of this year. We recently received the draft 
results of the Army Audit Agency's follow-up audit of program 
management to restore and enhance the southern Louisiana 
hurricane protection system. The follow-up audit indicated that 
the Corps of Engineers adequately implemented the 
recommendations of the initial 2007 report.
    The new report provided three additional recommendations 
related to the programmatic resource strategies and staff 
transition strategies. We take these recommendations very 
seriously, and we are currently working to analyze them and 
determine what is the best way to meet these recommendations.
    In closing, we are using the overall resources of the 
entire Mississippi Valley Division, all six districts and other 
Corps districts across the Nation to keep this program on 
schedule and deliver on our commitment to provide 100-year risk 
reduction in 2011. Construction will continue after that date 
to complete some other features by 2013, one being the 
permanent pump stations.
    Mr. Chairman, this concludes my testimony this afternoon. 
And I look forward to your questions.
    [The information follows:]

          

    Mr. Visclosky. General, thank you very much. And I 
apologize, but as you heard, we have bells and we will have 
five votes. The first is a 15-minute vote, and four which I am 
anticipating realistically is about 40 minutes from now. So I 
hate to take your time but I am going to have to.
    We will recess. And then Mr. Edwards will chair when we 
come back, and again it is not out of disrespect. I will have 
to go to Rules and we will proceed then.
    General Van Antwerp. Okay, sir.
    Mr. Visclosky. Thank you very much.
    [Recess.]
    Mr. Edwards [presiding]. General Van Antwerp, thank you 
very much. Sorry about the delay. I am told this is a good job 
if it weren't for voting. So, sorry about the delay to you and 
your staff.
    We would like to continue with the questions now. I would 
like to begin by recognizing Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman. I appreciate 
it. All of us apologize for that long hiatus.
    Let me first recognize the incredible amount of work that 
has been done not only in Mississippi and Alabama, but in 
Louisiana and in the New Orleans area. It has been some time 
since I have been down there, but I know a lot of backs have 
been to the--people have been working very, very hard. And I 
think all of us are highly appreciative of the work that has 
been done. We may not fully understand it, but we are counting 
on the work being done successfully.
    This is a very basic question. I would like to know whether 
the Corps has sufficient funding to meet its commitment to 
complete the Greater New Orleans area's 100-year protection 
system. A fairly basic question. And, you know, this was 
raised, when I wasn't here last year, of Secretary Woodley as 
to some of the outstanding costs. Where do we stand relative to 
your funding needs?
    General Van Antwerp. I will be real direct. We feel we have 
sufficient funding to make the 2011 hurricane season of this 
project. We think we have sufficient funds. We do need the 
ability to reallocate funds among the different features of 
this.
    Mr. Frelinghuysen. So how much are we talking about 
reallocation? I took a look at a lot of the materials that I 
have been reading over, and obviously a lot of money has been 
obligated, but it hasn't been spent. And there is some 
significant money there.
    General Van Antwerp. We have obligated $3.5 billion at this 
point; $14.3 billion is the total project cost. We are asking 
for the ability to reallocate, in this instance, between $550 
million and $580 million.
    Mr. Frelinghuysen. While we are on the subject of 
additional funding requirements, what are the outyear costs 
associated with maintaining the system to meet this 100-year 
level?
    General Van Antwerp. Basically what happens, once we 
complete the project, it is turned over to local authorities. 
The levees, for instance, will be then maintained. They are 
what we call federally built, but owned and maintained by the 
local entities.
    Mr. Frelinghuysen. Of course, that is sort of somewhat what 
got us into the problems.
    General Van Antwerp. One of the things Katrina has done is 
there are very clear requirements for what that maintenance is 
today, and we are working that issue all across the country. 
There is one part of this that we are still working with the 
State, and that is the closure structures and the pumps, 
because they are different than taking care of a levee system. 
They are mechanical, and they need maintenance. So we are 
seeing whether or not the State would want the Corps to do that 
over the long term. But the levees and other features of this 
will be maintained and operated by the local authorities.
    Mr. Frelinghuysen. So you are saying on the record that 
there will be no outyear costs associated with maintaining the 
system?
    General Van Antwerp. Not Federal funds, that is correct.
    Mr. Frelinghuysen. Federal. All right.
    What would you estimate would be their financial 
obligations? I know you have a myriad of jurisdictions.
    General Van Antwerp. Each Parish has that responsibility 
for those features that are in their Parish, just as they do 
now. I think one of the things in the long term, and I would 
like to just state this, we know, for instance, as there was in 
years past, there will be subsidence where some of the flood 
walls and levees are located. So, over the course of 50 years, 
it is very possible that at some point----
    Mr. Frelinghuysen. Actually, there is subsidence to some 
degree every year, isn't there? In certain areas, it is known 
for subsidence.
    General Van Antwerp. We are accounting for that as we are 
building this part of the system. But if you now fast-forward 
50 years, there is a strong likelihood that sometime during 
that 50-year period there is going to have to be additional 
height added on, just due to subsidence.
    Mr. Frelinghuysen. The term ``100-year standard.'' I have 
been reading and rereading my material. I know a lot of time 
and effort and money has been spent getting the system back 
into shape such that it could withstand a Category 3 hurricane. 
It is a little unclear to me what we have done. I know a lot of 
money is going towards the real potential of what might happen 
with a Category 4 and a Category 5 hurricane.
    General Van Antwerp. I would just describe the difference 
between a Category and a 100-year or a 500-year or a 10,000-
year risk reduction or protection is that largely the 
categories are determined by wind velocities. That is why you 
can see as a hurricane approaches land and they come through 
the Gulf, as that wind drops, they will change categories. And 
they can even grow in category, depending on the prevailing 
winds.
    The 100-year event accounts for more than just the wind. In 
the case of Katrina and Gustav is an easy comparison because 
they were both Category 2. By that Category 2, it means the 
wind velocities were very similar, but the surge associated 
with the two events was much different: 32 feet for Katrina, 12 
feet for Gustav.
    That was the game breaker for Hurricane Katrina----
    Mr. Frelinghuysen. So that actually raised it, just so I 
understand it. It was more than a Category 3 storm because of 
the surge. So, to some extent, it might have been considered to 
be a 4\1/2\ Category in terms of the amount----
    General Van Antwerp. Consequences greater than we would 
have expected with a Category 3. I think that is safe 
description, because of the surge that came in. We didn't 
recategorize it as a whatever because those categories go on 
wind velocities.
    Mr. Frelinghuysen. On the issue of State and local 
participation, what is the status of many of these local 
cooperation agreements, and where does the State stand relative 
to giving its assist in terms of land easements, rights-of-way, 
things of that nature? Has there been full cooperation?
    General Van Antwerp. We have had great cooperation. We 
recently have signed all three of the partnership agreements; 
one for the Lake Pontchartrain, one for the West Bank, and one 
for SELA, which is the internal drainage. So we have all we 
need in that regard. I think our team has established a 
terrific working relationship.
    You have huge issues here that we have to deal with, and 
just an alignment for a levee and the mitigation required, the 
lands, easements, rights-of-way. These impact people's 
properties. I think the State and local authorities have done a 
great job in that.
    Mr. Frelinghuysen. I understand the notion of protecting 
property, private property, but obviously we are also about 
here protecting lives.
    General Van Antwerp. Absolutely.
    Mr. Frelinghuysen. When we weigh in on behalf of the 
taxpayers, we are assuming we are going to try to do both. I 
just wonder whether along that road you have encountered any 
major resistance. The picture many of us have is because so 
many people have been displaced in some areas, people have gone 
back into the very areas that were previously devastated and 
sort of reestablished a claim, and no one has done much to, 
shall we say, shake them of the illusion that they are in 
perhaps future danger.
    General Van Antwerp. Well, I think we have been as 
transparent as we can be with the risk associated with going 
back into, say, the Ninth Ward or other areas. Incidentally, 
when the surge barrier gets constructed in Lake Borgne, that 
will greatly reduce the risk in some of those very high-risk 
areas, but that is why we have that area as red currently.
    The lands, easements, rights-of-way are the responsibility 
of our partners in the State and local authorities. The Parish 
presidents are about risk reduction for their people. I have 
met with them. Our team has met with them. They want to deliver 
on this. They do not want that to be the thing that holds up a 
contract being let; that they don't have what is required. So 
they are really working with us.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Edwards. Thank you, Mr. Frelinghuysen.
    General Van Antwerp, let me ask you, if Katrina hit in July 
of 2011, same surge, 32-foot surge, everything were exactly the 
same thing, what would be the impact on the city of New Orleans 
with the facility you have in place at that point?
    General Van Antwerp. I am confident that the system would--
I am going to use the word ``protection'' in this case, because 
if Katrina hit, the same event hit, it would be protected from 
that. The T-walls would hold, the levees would do their job. 
Would there be overtopping? Yes, in some areas. There would 
have been overtopping of Katrina of the level heights.
    But will there be rain in the bathtub that needs to be 
pumped out? Yes. But the gates will work for the surge, the 
pumps will drain the canals as they are supposed to do, and the 
levees will hold.
    Mr. Edwards. Is the 100-year flood protection standard 
defined--or how would you define that? Is it a combination of 
surge and wind velocity, or is it basically predicated on the 
surge levels? Could you define that for us?
    General Van Antwerp. The basic definition of a 100-year 
flood is that you would have a 1 percent chance of having that 
magnitude of an event with all those different features you 
talked about, surge, wind, rain, all of that, in any given 
year.
    Mr. Edwards. Is that magnitude defined as that magnitude of 
a Katrina, that magnitude of a certain level of surge? How do 
you define that magnitude?
    General Van Antwerp. You first look back in history and 
look back at all the events and what type of events have 
ocurred. We have modeled over 152 different events coming in at 
all angles and determined to get at what is a 100-year event. 
That means that 1 percent chance it happens is fairly unlikely, 
but, at the same time, we always tell people this is why it is 
risk reduction. You can have two 100-year events back to back.
    Mr. Edwards. Would Katrina be defined as a 100-year flood 
or a 200-year flood?
    General Van Antwerp. It is a 400-year. Katrina would be a 
400-year. That is why I say there would be overtopping, but the 
levees that are supposed to hold and be overtopped will hold. 
But there still will be flooding. It was a very severe event.
    Mr. Edwards. So the levees would hold at a 400-year level 
as you are building to the standard for June of 2011; is that 
correct?
    General Van Antwerp. When we build for 2011, that is at a 
100-year protection. So now you have a 400-year event in 
Katrina because of the surge, not because of the wind category; 
that the levees that we are building right now still would be 
overtopped, but it wouldn't be the catastrophic.
    A lot of what levees really do and should do is provide you 
time and provide you the ability to evacuate and do all the 
other things. But the real issue in Katrina was we had 
catastrophic failure.
    Mr. Edwards. Is it the surge that provides most of the 
physical force that knocks down the levees?
    General Van Antwerp. In this case the surge came up the 
canals as the drainage water was going down the canals, and 
there was nothing to block that surge from coming in from Lake 
Pontchartrain. Now there are gates, there are barriers that are 
going to take that surge and stop it at the canals. But this 
event will still be such that the levees could be overtopped.
    Mr. Edwards. Overtopped, but not catastrophic flooding.
    General Van Antwerp. We categorize a levee that does its 
job and is overtopped is armored so that it can take water on 
it, water flowing over it, as different from one where you have 
a hole that is cut, and it fails.
    Mr. Edwards. Okay. Let me ask you a couple of questions if 
I could on behalf of Chairman Visclosky, who is, as you know, 
at the Rules Committee. How are you ensuring that the 100-year 
standard is being applied consistently throughout the system? 
And what about in any area that is not under--directly under 
control of the Corps?
    General Van Antwerp. The 100-year is based on modeling and 
historic data, so we are very confident in the 220 miles, what 
is on your map there, that make up the system. One of the 
things we are working, and this is a weak link argument, you 
can say, if there are seams between different features. So we 
are trying to bring the whole thing up, and in 2011 it will be 
a system that will work together. We are very confident that it 
will be 100-year protection.
    Now, there are other levees, non-Federal levees, that are 
being worked under this that will not be at the 100-year level, 
but they will provide some level of risk reduction.
    The other part is internal drainage. That internal 
drainage, if you had to compare 100-year for the ring system, 
if you will, internal it is 10-year at this point. So if they 
have a 10-year rain event--and actually down there last year 
there were, in the course of 2 or 3 weeks, a couple of 10-year 
rain events that provided that much water internal to the 
system.
    So this is still a weak area, and the overall project does 
have that SELA, the internal drainage project, but that will 
not be completed until about 2014 to 2016.
    Mr. Edwards. One more question on behalf of Mr. Visclosky, 
and then we will move on to the other Members.
    Last March you testified that the Corps had addressed or 
was in the process of addressing the nine recommendations of 
the U.S. Army Audit Agency. Can you update the subcommittee on 
where you are in addressing all of those recommendations?
    General Van Antwerp. We addressed all the recommendations 
from the 2007 report. The major one had to do with how we were 
staffing the effort, because what we did when Katrina hit, was 
utilize 41 districts out of the 45, and the ones that we didn't 
use are in either Iraq or Afghanistan. People have come from 
all those districts to work Katrina. The permanent staffing for 
the three organizations, New Orleans District, Hurricane 
Protection Office, and Task Force Hope--it took a long time to 
get the right people down there on a permanent basis. Karen, 
for instance, bought a house down there, and she is there.
    The feeling from the audit agency is that would save in the 
neighborhood of $3 million to $8 million through permanent 
staffing. We are starting to see realization of that savings if 
you compare it with putting people on what we call temporary 
duty. That was a big part of it.
    We also gained a lot of ground. We hired a number of 
retired annuitants to come back for debris removal and some of 
the recovery. Since then they have gone home.
    What we have down there is pretty permanent in the 
workforce area. That was probably the major recommendation.
    There are three new recommendations in the current report, 
and we are looking at those. It is just in draft now, and we 
will take those on and get them done.
    Mr. Edwards. Can you report back to the committee when you 
take action on those three recommendations? Thank you.
    Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman. Thank you for all the 
work that you have done down there. And I would recommend to 
the committee that if they haven't been down there, it would be 
a good trip for the committee to go look at for maybe 2 or 3 
days. New Orleans is a great place.
    General Van Antwerp. By the way, it is Mardi Gras right 
now. This team wants to get home.
    Mr. Simpson. This is really a good week to go do it.
    I want you to educate me, I guess, because even having been 
down there, I am kind of stupid on this stuff. It seems to me 
like the levee protection is only as strong as the weakest link 
in the levees. And when I see on the map here that ``more 
vulnerable areas'' versus ``does not meet the 100-year 
protection,'' it seems to me like if you have got areas that 
don't meet the 100-year protection, then the whole system 
doesn't meet the 100-year protection. Is that correct?
    General Van Antwerp. That is correct.
    Mr. Simpson. Some of these levees are locally owned, right?
    General Van Antwerp. In this system, the 220 miles, these 
are federally owned, federally built levees, so they are not in 
that category. As you go down into Terrebonne Parish and 
Plaquemines Parish, they do have non-Federal levees there, some 
of which are actually in this, but not at the 100-year.
    Mr. Simpson. So the entire levee system to protect New 
Orleans is federally owned.
    General Van Antwerp. Federally owned, federally 
constructed.
    Mr. Simpson. And federally constructed.
    A couple of just curious questions. When I look at this out 
on the far right of this map, all the most vulnerable areas on 
the intercoastal waterway and stuff, we are taking those levees 
from 16 feet to 26 feet.
    General Van Antwerp. Twenty-six to twenty-eight feet on 
that part that is the Mississippi River Gulf Outlet. That part 
is going to go to 26 feet.
    Mr. Simpson. What are we using for materials? Where are we 
getting them? Is that a difficult thing?
    General Van Antwerp. That is a difficult thing because we 
are talking, I don't know, 100 million cubic yards, 75 million 
cubic yards of material. What we used to do is use a dredge, go 
down. As you dug the material out, you side-cast it, and you 
shaped it. That was your levees. I would equate these levees to 
almost how we build a dam. They have impervious parts to them. 
They have armored parts to it so they can withstand penetration 
of water and pressure of water and also overtopping.
    We are gathering that material far and wide, but the levee 
material is a big cost of this project itself. That is one of 
the areas where the local authorities are working with us to 
find borrow pits that are adequate to do this.
    Mr. Simpson. On this IHNC surge reduction barrier and the 
Seabrook surge barrier, what are those going to look like? Are 
those going to look like the barriers they have got in the 
Netherlands?
    General Van Antwerp. We do have a picture here, which I can 
show you after or at any point, but basically it is a wall, and 
it has--the actual pilings that are being driven down are about 
150 feet on this wall; 130, 150. They are about 6 feet in 
diameter. Then you have batter piles that go back at an angle, 
and that is what really gives that wall the ability to 
withstand that pressure from a surge. The wall would look 
fairly common, but it is very strongly reinforced. There is a 
picture of it right there.
    Mr. Simpson. And then it will have the same type of doors 
or gates.
    General Van Antwerp. There are two navigation features on 
this surge barrier and this is where we have worked with the 
Coast Guard; this has been a real challenging thing, to make 
sure we can pass traffic, but that this, when we close those 
gates, assure that it will take this surge, because, again, 
that is a weak link in the surge barrier where you have gates 
that open and close. But it has got to withstand what the rest 
of the wall does.
    Mr. Simpson. Interesting.
    General Van Antwerp. It is about a mile long.
    Mr. Simpson. Have we started construction on that?
    General Van Antwerp. Yes. We broke ground at a ribbon 
cutting, and they are underway driving piles. What we want to 
have by June of this year is some level of protection, or some 
level of risk reduction, I would say. That is where we are 
headed. We will have the wall built to a certain height this 
year.
    Mr. Simpson. Congress essentially loaned the State $1\1/2\ 
billion over 30 years to pay its share of the project's cost. 
The taxpayers around the United States have loaned this money 
to the people of New Orleans. That seems a pretty good deal, 
especially since the State of New Orleans ran a $900 million 
surplus last year, which I am sure most States would like, and 
I don't know if they have got a $900 million surplus this year.
    We have discussed the possibility of a cost increase to 
elements of the total system. Is there the possibility of the 
State providing the additional funding and freeing up some of 
the Federal funds that were provided to allow the State 
repayment over time?
    General Van Antwerp. At this time we do not feel that there 
will be a cost increase to the total project. We do not feel 
that. We feel we need to reallocate funds within the $14.3 
billion.
    At this point, the State's share is $1.83 billion, of which 
about $330 million of that is for lands and easements and 
rights-of-way. The other $1.5 billion is the cash, and that 
cash was put up by the Federal Government on the 30-year loan.
    Mr. Simpson. When does the repayment of that begin?
    General Van Antwerp. Thirty years from last year.
    Mr. Simpson. Thirty years from last year is when the 
repayment begins.
    General Van Antwerp. Construction completion. As the 
construction is completed, then the 30-year clock begins, and 
then it is repaid at the 30-year mark. It is an annual payment.
    Mr. Simpson. The Army Corps got $4\1/2\ billion in the 
emergency supplemental that just passed?
    General Van Antwerp. Yes, sir.
    Mr. Simpson. Is any of that slated for New Orleans or for 
other projects?
    General Van Antwerp. Not for any of this. There may be some 
projects apart from this system. This system is fully funded. 
The stimulus package will not be used for this system.
    Mr. Simpson. I appreciate it. I know it is hard work you 
are doing down there. I know it is tough to protect a city that 
is below sea level. As the Ranking Member said, I have some of 
the same concerns he does of how much protection can you give 
to some areas. It is very costly to all of us. But I do 
appreciate the work you are doing down there.
    General Van Antwerp. One of the things in any study we do, 
we look for nonstructural solutions also. A nonstructural 
solution might be the wetlands which provide, for instance, 
some surge protection. But we lost 200,000 acres of wetlands 
during Katrina. They just washed out to sea.
    Mr. Simpson. Is that something that can be replaced 
somehow--I mean, we do things like beach renourishment and that 
kind of stuff--replacing some of those wetlands that have 
destroyed over the years?
    General Van Antwerp. It is very challenging to do it, and 
then to get them to really hold. There are a lot of what I 
would call almost floating wetlands. This had become a little 
like that over time. So it doesn't hold, where it is rooted 
like some other wetlands. Very challenging. Some countries in 
the world are building islands. You may have seen them over in 
Qatar and Dubai. Another great feature is if you have barrier 
islands. In fact, Grand Isle here operates much like a barrier 
island. It takes the brunt of it and then levels off that 
surge.
    Mr. Simpson. On the east coast along the Atlantic, the 
barrier island.
    General Van Antwerp. The same with Galveston Island during 
Hurricane Ike. That is your barrier island, Galveston Island.
    Mr. Simpson. I appreciate it. Thank you.
    Thank you, Mr. Chairman.
    Mr. Edwards. Thank you, Mr. Simpson.
    Mr. Berry.
    Mr. Berry. Thank you, General Van Antwerp and all of your 
staff, for being here and the hard work that I know you do, and 
determination and dedication that you provide to it.
    To kind of continue with what Mr. Simpson was talking 
about, I have met with some--I think the Governor put a task 
force together about trying to rebuild the marsh down there or 
the coastal wetlands, and I have met with some of them from 
time to time. They can present that where it looks just real 
simple, and I am sure that you have experienced all of that.
    I don't question anyone's integrity or good intentions, but 
are we looking at that as a way to redirect the sediment coming 
out of the river to hopefully accomplish that and get some more 
natural storm protection in that area?
    General Van Antwerp. We are definitely looking at 
diversions. There are a number of diversions already off the 
Mississippi River. That is one aspect of what you can do. You 
can reclaim some of those wetlands there, or marsh areas, using 
that. We are talking that there were massive damages here.
    The other consideration for the long-term future is that 
there is sea level rise, and it is happening out there. It is 
small, but occurring over time. And what does that do to your 
systems? But, we are looking at diversions.
    Mr. Berry. I know the Mississippi River Commissioner from 
Houma in Louisiana. I believe I never see him that he doesn't 
remind me that Houma is going to be gone in a few years if we 
don't do something. I think that is a different basin. I am not 
sure. But you all know who I am talking about.
    Thank you. That is all I have.
    Mr. Edwards. Mr. Frelinghuysen.
    Mr. Frelinghuysen. Where is the final report on the 
Louisiana Coastal Protection Restoration Study?
    General Van Antwerp. Sir, that is a good question. I will 
tell you exactly where we are on that. It was directed, this 
report is late, and we confess, but it is the most complex 
thing we have ever done. We have all along informed of the 
status of the study.
    Here is where we are today. In March, we will send the 
report to the National Academies of Science for their review. 
It is our external peer review. At that point, the report in 
draft will probably be made public because of their way of 
operating. They then will post it to the Web as part of their 
process. We hope by June----
    Mr. Frelinghuysen. So the delay of getting it to them. I 
assume it is pretty complicated. But you are going to tell us 
why it is so complicated.
    General Van Antwerp. First of all, this is the most complex 
thing I think we have done, in the civil works area in our 234-
year history at the Corps. The timeframe initially was really 
unrealistic for us to do it. Until we got into it, we didn't 
realize all the complexities. We modeled 152 storms coming from 
different directions. Every little adjustment in a direction of 
a storm had a different influence on this system and where it 
attacked. So unusually complicated.
    When we got done with courses of action through this--and 
that is kind of what the study will have, it will have 
different options.
    Mr. Frelinghuysen. Different options and obviously economic 
consequences of each.
    General Van Antwerp. If it is wetlands or a barrier island 
or a diversion or whatever. There are over 100 good ones. There 
are over a million different options of how to do this, but, 
coming out of the study, over 100 very valid ways of going at 
this to get what would be a 500-year level of protection. That 
is what we are looking at in the study, what would be a 500-
year, or it would change that percentage and make it less. A 
lot more risk reduction, if you will.
    So we are on path right now to get to the National 
Academies of Science in March, and then to go public in draft 
to the State and Agencies and other stakeholders in June. We 
will have----
    Mr. Frelinghuysen. So how do you go from a 100-year 
protection----
    General Van Antwerp. To a 500-year. There are a lot of 
things that you can do, but at great cost. If this is $14.3 
billion, I guess--and we will have some cost basis in here; not 
specific recommendations, but a number of things that you can 
choose from to do.
    Mr. Frelinghuysen. And you are putting it out there so the 
civil engineers from around the world and people that are 
capable, beside obviously all of you, but the civilian and 
private sector----
    General Van Antwerp. This will be an international event. 
There will be many Ph.D. theses, I would predict, that would 
come from trying to figure out what is the best option on this. 
It is hugely complicated.
    Mr. Frelinghuysen. So you anticipate it will be ready this 
August?
    General Van Antwerp. By June it will go public. In March it 
will go to the National Academies of Science, and there it will 
essentially be public because they will post it on the Web. We 
will then answer all of their critiques to what we have done. 
And then by June we will put it out for public comment. And 
then probably in the August timeframe, it will be ready to go 
to Mr. Woodley, or whoever is in the chair at that time as the 
Assistant Secretary.
    Mr. Frelinghuysen. I won't say changing direction, but the 
State of Louisiana directed the consolidation of the levee 
boards serving as sponsor for the several authorized projects 
making up the Greater New Orleans Protection System. Can you 
update us on how you feel this arrangement is working? Are we 
any closer to the desired effect? Reinforcing the protection 
system is just that, a system and not a collection of 
individual projects. That is a nice way of saying things have 
been done certain ways for generations, I assume.
    General Van Antwerp. I think for generations, somewhat by 
how they are organized into parishes.
    Mr. Frelinghuysen. It is like a cultural thing. And I 
assume that cultural thing, there may be a need for those 
distinctions, but we are, in fact, raising the bar. Or is the 
State anticipating raising the bar, so to speak?
    General Van Antwerp. I think the State is. The Governor has 
done great things. He has now got a staff that works this. And 
so they are pulling this together so that our partnership 
agreements----
    Mr. Frelinghuysen. Not forgetting the issue of sovereignty. 
You have got the State of Louisiana, and we are highly 
respectful of Governor Jindal, but you also have the city of 
New Orleans which has its own political dynamics. I just wonder 
what sort of planning is being done to minimize risk exposure 
to the people and businesses of New Orleans?
    General Van Antwerp. There has been a lot of planning and 
zoning and things like that that really----
    Mr. Frelinghuysen. The public perception is----
    General Van Antwerp. Just go back as we were.
    Mr. Frelinghuysen. So you are telling us from your vantage 
point there has been some smart growth and some smart urban 
planning going on here?
    General Van Antwerp. They did a lot of work to designate 
areas that were at higher elevations. They promoted that by 
having those be the places where the schools and the hospitals 
and those things were going to be rebuilt. And so what this is 
is to encourage people to move to those areas.
    Mr. Frelinghuysen. You can encourage people to move, but 
human nature being what it is. And obviously if you are poor, 
and you are homeless or you have been displaced, you want some 
permanence to your life. I just wondered, how are you 
interacting with local planning boards, which I assume that 
there are a multitude of?
    General Van Antwerp. Right. We are involved with all the 
local planning boards. We have town hall meetings.
    Mr. Frelinghuysen. Their rules as we know them, are they 
being enforced?
    General Van Antwerp. Well, I will have to defer. Can I 
defer----
    Mr. Frelinghuysen. You can defer to anybody you want. This 
is sort of a basic question here. Maybe for the record you 
would be good enough to identify yourself.
    Ms. Durham-Aguilera. My name is Karen Durham-Aguilera.
    General Van Antwerp. Karen is a resident.
    Ms. Durham-Aguilera. My name is Karen Durham-Aguilera with 
the Army Corps of Engineers. I am the Director of Task Force 
Hope, so I live and work in New Orleans. I lived there in the 
1980s. And I was honored when the Chief at that time, General 
Strock, asked me to go back to New Orleans and serve--basically 
serve as a program manager for this Hurricane Storm Risk 
Reduction System. I have been back in New Orleans for over 2 
years now. I live and work there, too, along with all our great 
folks that the Chief talked about.
    Mr. Frelinghuysen. You head up Task Force Hope. And you 
project hope, I hope.
    Ms. Durham-Aguilera. Absolutely, sir. Every day. Every 
single day.
    Mr. Frelinghuysen. So where are we relative to the question 
I asked?
    Ms. Durham-Aguilera. A couple of things. The city of New 
Orleans established a redevelopment czar, chief of 
redevelopment, that basically coordinates the project planning 
from across the city. They are still working on their overall 
master plan with all the community groups; what areas should be 
developed, which ones should have a spiral growth of 
communities, whether it is schools, churches, and so forth.
    So what is our role in that? That is their responsibility, 
but our role is to provide the information, what areas we see 
as high risk and others, even when the system is in place, as 
the Chief has been testifying; putting out our risk mitigation 
maps; making sure the planners are up to date and fully 
informed with everything we can do.
    Mr. Frelinghuysen. So you are giving them the tools.
    Ms. Durham-Aguilera. Absolutely.
    Mr. Frelinghuysen. So this is sort of what my question is: 
They have the tools, and they have the rules. How closely are 
they heeding your advice?
    Ms. Durham-Aguilera. It is a work in progress. There are a 
lot of areas there that still have yet to recover, but they are 
very engaged as stakeholders to provide input to the Louisiana 
Coastal Protection Restoration Study with all these other 
alternatives that are structural, nonstructural and 
environmental features that will give you higher levels of 
protection past the 100 years.
    Mr. Frelinghuysen. This sort of worries me. If we are going 
to put all the stuff on the Internet and ask for the American 
Society of Civil Engineers to weigh in, that may be a wonderful 
exercise and I am sure will get lots of professional 
viewpoints, but if the total population continues to practice 
and the people sort of do whatever they want to do with the 
historic pattern, even given the tools you have given to 
identify certain vulnerabilities, then where are we?
    Ms. Durham-Aguilera. Let me give you a couple of examples. 
There are new building codes that have to do with elevations. 
One of the things that everyone who lives in New Orleans knows 
is their first floor elevation. When that city was established 
a couple hundred years ago, you can go look at the older homes 
and you will see the porches, the first floor level is 10, 12 
feet off the ground. And there was a reason for that, and that 
reason still exists.
    So the message to most people is to know your first floor 
elevation, know that you are at risk, know the amount of 
flooding that you could anticipate with these big storms. And 
we provide the risk mitigation maps to help people figure that 
out.
    So there are new building codes, there are elevation 
requirements, there is flood insurance, the draft maps that 
FEMA has put out; but there are all these things working 
together. But to do better than that is the combination of the 
structural and nonstructural and the environmental features yet 
to come that could help dampen the effects of the higher 
surges.
    Mr. Frelinghuysen. The stuff yet to come.
    Ms. Durham-Aguilera. The Chief referred to the Louisiana 
Coastal Protection Study. That is the multiple line of defense.
    Mr. Frelinghuysen. Assuming that each of those options 
would have a certain degree of affordability.
    Ms. Durham-Aguilera. Yes, sir.
    Mr. Frelinghuysen. Okay.
    Mr. Simpson. Would you yield for a second?
    Mr. Frelinghuysen. Happy to, if the Chair allows.
    Mr. Simpson. Are there differences in insurance rates based 
on where you build there and the risk associated with where you 
build?
    Ms. Durham-Aguilera. Throughout Louisiana, there are 
differences in rates. The Chief talked about the system that we 
are working on, the 350 miles of levees and flood walls. They 
are all within that perimeter protection. But the outer areas 
will have less than a 100-year. They have that now. Even with 
the improvements, they will still be less than 100-year. So 
FEMA is still engaged in establishing what those rates would 
be.
    Mr. Simpson. Okay.
    Mr. Edwards. General Van Antwerp, let me ask this, and I am 
more interested in focusing on the future than the past, but 
the Army is famous for its lessons learned model. On that 
point, the Governor of Louisiana this weekend on national 
television basically laid the blame for the failure of the 
levee system on the United States Army Corps of Engineers.
    My guess is that the causes that led up to the devastation 
of New Orleans were somewhat more complicated than that, with 
the responsibility to be spread out among State, local, and 
Federal agencies. I would like to give you an opportunity to 
give us a summary of what were the lessons learned, what were 
the responsibilities, and I don't know if this is correct.
    I heard at one point the reason taller or stronger levees 
had not been built is the State of Louisiana, the city of New 
Orleans had not agreed to provide its local share match. Could 
you just give us some insight into that? I am not interested in 
finger pointing, but just an honest analysis of what got us to 
where we were when Katrina hit.
    General Van Antwerp. We did a chronology of events, and we 
have that chronology going way back to the 1950s when the 
different projects were started. And I say that, projects, 
because it was never really dealt with as a system, and that is 
a failure. A lot of that is how we were funded over the years 
or how we even plan projects. We had areas that would have more 
risk reduction or protection and areas right next to it that 
had less, and it never really operated as a system.
    Mr. Edwards. Was that a Federal responsibility?
    General Van Antwerp. I would say a lot of that was Federal, 
and maybe the method of funding. But some of it is the way we 
have done business for a lot of years. I think just maybe in 
the last 4 or 5 years are we really, really looking at 
watersheds and total systems, whether it be the Mississippi 
River, the Columbia, but I think that is the important way to 
do it.
    A big lesson learned is that you have to deal with these as 
systems, and they are only as good as the weakest link, and 
there were many in this.
    There were techniques used in engineering in the 1950s we 
don't use today, but over time those levees weren't torn down 
and replaced. We knew they were side-cast levees that used a 
lot of organic material that did not have the staying power. 
There were projects that were on the books for the future that 
needed funding that we didn't get to.
    Mr. Edwards. Federal funding.
    General Van Antwerp. Both Federal and State. Both Federal 
and State. So many, many issues.
    Like you, I am a future guy, and we are going after this, 
but I think some of the lessons we have learned you are seeing 
reverberating around the country as you look at maintenance of 
levees. We are doing borings all over to find out not only what 
does the levee look like on the outside, and maintained from 
that aspect, but what is inside in the bottom of it. Can it 
withstand having water up to the top foot of that levee without 
breaching and failing? So this has been a huge help to our 
country.
    Mr. Edwards. Great. I appreciate your explanation.
    In your testimony you mentioned the design-build contract 
for the Inner Harbor Navigation Canal Surge Barrier. Can you 
expand on the process for the procurement and why the Corps 
opted for this method?
    General Van Antwerp. Generally I will just distinguish a 
design-build from what we normally think about, and that is a 
design, then bid, and then build. So this is design-build. 
First of all, that means that the same company that is going to 
build it designs it, and they do it after the contract is 
awarded. In this case we gave them about a 5 percent concept 
design. And once we awarded the contract, then they went to 
design, and then they build.
    What they are able to do is when they know they have the 
foundation ready, and that is designed, they can begin to 
build. And so what you get is a much earlier begin-to-build 
schedule.
    In a design-bid-build, the design is completed in total, 
and then you put it out for bids, and then a constructor, 
contractor bids on that.
    So most of those are done on what we call a firm fixed 
price, meaning we know our exposure. And part of this, frankly, 
if we would have done design-bid-build, this would have been 
way after 2011. We have a possibility on this surge barrier 
that we are going to have some advance measures that will 
protect this year. So that is the advantage.
    The other real advantage, if you do a design-bid-build, 
they basically build your design. When you do it this way, they 
design and they bring the innovation to it. So you have to be 
real careful in the selection of who you are going to have do 
this, but you get people who can really bring innovation. We 
have people who can really bring innovation and speed. Your 
risk is that when you award the contract, you don't know 
everything that you don't know.
    Mr. Edwards. Can I ask, especially given some of the 
funding in the recovery package for the Corps, can you see this 
approach being applied in areas outside of New Orleans?
    General Van Antwerp. We do. In fact, even in New Orleans 
for the pump system and the surge barriers at the canal, we use 
design-build. In the military programs that we use it on, the 
Fort Hoods of the world, and everyplace else, we use a 
tremendous amount of design-build. We are getting tilt-up 
construction, we are getting refabricated at the factory, and 
it is good. So we have cut literally 15 percent of the cost and 
almost 30 percent of the time on, for instance, barracks 
construction on our installations. So this is a new way of 
doing business, but we are using it very extensively. This is 
the first time on a civil works project of this magnitude, but 
we are wanting the innovation the industry can bring.
    Mr. Edwards. Thank you.
    Mr. Simpson.
    Mr. Simpson. Let me follow up on that. How much of the 
design has to be done before you bid or before you go out to 
build?
    General Van Antwerp. Before you go out to build? Well, it 
depends. In this particular case, before they begin to build 
the lower parts--you have got to figure out in that picture you 
saw what is going to be the size of those pilings for instance. 
So you have to design enough of the project to know that part 
of this project.
    Mr. Simpson. Is there a certain percentage?
    General Van Antwerp. Not really. It is almost by feature.
    Mr. Simpson. Because we have had some concerns in the past, 
as you probably know, at waste treatment plants, as an example, 
in Hanford, in the Department of Energy, where we have required 
them to design more of it before they start to build it. 
Because of the cost overruns and other things that have come 
along, we figured that it wasn't designed enough once they 
started. Is that of concern here?
    General Van Antwerp. I don't believe that is of concern 
here. I think, number one, is while they have never built 
something this large, there are only a small number of 
companies that can do this kind of work in the world. So you 
are having someone that knows how to do surge protection.
    I will just use another analogy. Let's say on a barracks on 
an Army installation, if you have someone that has built 100 of 
these, and they are going to build the next version, you might 
require less of the design because they know they can start 
pouring the basement today because they know what it takes. It 
very much depends on, number one, their experience and how much 
they have done.
    One thing you can do on a design-build, and we do this 
sometimes before we go to bids, we ask them to do a percentage 
of the design, 30 percent. The more you ask of that design up 
front, the more cost each bidder has in that process. So there 
is a certain point that, the way the construction world and the 
contractor world works, they set aside so much of their money 
every year to bid on projects. If you ask them to go to a 30 
percent design, and they don't get it, they are not going to 
bid on a lot of other projects. So it is an art form.
    Mr. Simpson. And part of it, I guess, is because when we do 
things like the waste treatment plant, which we have had the 
Army Corps look at in a few things, is that it is something new 
that has never been built before, and starting construction 
when you have got 5 percent of it designed is a problem. 
Whereas, if we go out and build a levee system, or barracks, as 
you mentioned, we built a lot of those in the past, we pretty 
much know what--with minor changes, what it is going to look 
like.
    I know you look at dams. I am not sure how often. What, 
every 5 years or something like that? And you have to certify 
dams and so forth and give them different levels. Do we do that 
with levees?
    General Van Antwerp. We are in a certification process for 
all of the levees.
    Mr. Simpson. There is a process in place for certifying 
levees?
    General Van Antwerp. There is a process, yes.
    Mr. Simpson. How often will they be certified?
    General Van Antwerp. That is a good question. I don't know 
what the criteria is. I think it is every 10 years, but I will 
have to get back with you on that.
    General Van Antwerp. But it has a certain frequency, and 
there is criteria. We publish that criteria.
    Mr. Simpson. Thank you very much.
    Mr. Visclosky [presiding]. Mr. Berry.
    Mr. Berry. I don't have anything else, Mr. Chairman.
    Mr. Visclosky. General, thank you for your forbearance 
here. The question is: Are increases in project costs 
influencing decisions regarding project alternatives or 
resulting in the reevaluation of project alternatives that 
provide less effective means of protection?
    General Van Antwerp. No, sir. If you are referring to----
    Mr. Visclosky. The causeway and flood gates on Metairie and 
Interstate 10, for an example.
    General Van Antwerp. We are not going to build anything 
that doesn't provide the right level of risk reduction, the 
100-year level on this project. So changes in cost is not 
influencing us building what will do what we say it will do 
here, if I understand your question. There are no Cadillacs or 
Lexuses, but they are going to do what they are intended to do 
in our designs. We are not cutting down or using a less 
stringent criteria.
    Mr. Visclosky. Has there been discussion about State and 
local participation?
    General Van Antwerp. We have had some of the involvement of 
the State and local authorities.
    Mr. Visclosky. Specifically, just for my reference, and if 
it has been touched, you do not have to respond again, but with 
the loan extended to the State for $1.5--and the 30-year, was 
there a discussion about if the State, who actually ran a 
surplus last year, as I understand, makes an investment, is 
there any discussion that some of that could be, if you would, 
a paydown of that loan?
    General Van Antwerp. Just a little recap. We did talk about 
the sum. But when construction is finished, the 30-year clock 
starts. And there is an annual payment that the State would 
make towards that 30-year to pay it off in that 30-year time 
period. Their cash contributions were $1.5 billion. So I am not 
sure if you are asking if they would go beyond that or 
whatever. That is their----
    Mr. Visclosky. If they have the resources and they would go 
beyond, would you consider that a payback? Or let me put it 
this way: Has there been any discussion?
    General Van Antwerp. I think this was in the cost-sharing 
agreements for this project, their total part was $1.83 billion 
of which $330 million of that was lands easements and rights of 
way, where the other part is a cash contribution. And to my 
knowledge, that is the cost-sharing agreement. Unless there 
would be a change ordered or directed, that is all they owe. 
That is the extent of it, regardless of what the economy of 
Louisiana is.
    Mr. Visclosky. I would understand that there is no other 
question that I have. If you at this point--unless Mr. 
Frelinghuysen has any? Okay. General, I apologize--I mean there 
is nothing to apologize about. We were stuck. I appreciate your 
forbearance. I truly do.
    General Van Antwerp. It is my pleasure.
    Mr. Visclosky. My absence and others' was not obviously 
intended. Mr. Frelinghuysen, I do appreciate----
    General Van Antwerp. We would be glad to answer any 
questions for the record.
    Mr. Simpson. Now that the Chairman is here, I will restate 
that looking at a map doesn't do justice on this. You really 
need to go down there and see it for about 2 days, 3 days, 
something like that. Just a suggestion.
    Mr. Visclosky. Thank you.
    Mr. Simpson. And this week would be a good week, too, since 
it is Mardi Gras.
    Mr. Frelinghuysen. Can I put in a plug also? I know I am 
sure I say on behalf of the committee that we thank the Corps 
not only for their work in this area but also we anticipate you 
will be pretty busy in Afghanistan in the near future. I know 
you have got the brightest and best down in New Orleans doing 
all sorts of stuff, both civilian and military. But obviously a 
lot of people are out in the war zone. And boy, I assume you 
are going to have to redirect some of your talent, most of 
which I assume people will be volunteering, at least the 
civilians will.
    General Van Antwerp. Just to give you a feel for that, we 
have three districts and a division in Iraq and we have a 
district in Afghanistan. We have almost 1,000 people deployed. 
Civilians are on 6-month rotations. We have deployed, over the 
7 years we have been at this, almost 7,000 people from the 
Corps. So we have a very expeditionary force. We are doubling 
the size of the district in Afghanistan. We will go from about 
350 that it is today to 680 by the end of this year. We are 
building seven new base camps as the 17,000 Marines, Special 
Forces, and Army soldiers go over there. We are doing our part. 
I just sent a general officer over there.
    Mr. Frelinghuysen. Let the record so reflect that we also 
note our appreciation for that effort.
    Mr. Visclosky. And General, any other observation I have 
made to audiences is with the stimulus. And that is not the 
point of the hearing, but the reason we are here is to make all 
deliberate speed but obviously spend those moneys as wisely as 
possible. And we are just happy we had some additional 
resources as we continue into 2010.
    Well, I want to thank everyone, and we are adjourned.

          

                                          Wednesday, March 4, 2009.

           DEPARTMENT OF ENERGY: PROJECT MANAGEMENT OVERSIGHT

                               WITNESSES

INGRID KOLB, DIRECTOR, OFFICE OF MANAGEMENT, U.S. DEPARTMENT OF ENERGY
EUGENE ALOISE, DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT, U.S. 
    GOVERNMENT ACCOUNTABILITY OFFICE
JONATHAN BREUL, NATIONAL ACADEMY OF PUBLIC ADMINISTRATION

                  Chairman Visclosky Opening Statement

    Mr. Visclosky. Good afternoon. We will bring the hearing to 
order.
    Today's hearing has been called to examine the Department 
of Energy's inability to manage major construction projects, an 
issue that has been an ongoing concern with this subcommittee 
and a personal priority for me as Chairman. As a member of this 
subcommittee for more than a decade, I am forever aghast and 
appalled at the cost overruns and schedule slips of the 
Department of Energy's major construction projects. This year 
marks the 19th consecutive year since 1990 that DOE's contract 
management has made the government accountability's high-risk 
area.
    My son Tim turned 19 this past Sunday. While Tim has moved 
on from his date of birth and grown and matured and become a 
responsible adult, the Department of Energy has not. In the 
past they have said we are making progress; in the past they 
have said it is really not that important. Last week a DOE 
representative said it is only a problem in Environmental 
Management and the National Nuclear Security Administration. I 
would note for the record that in fiscal year 2009, NNSA and EM 
accounted for $15,584,156,000 of taxpayers' money, or 58 
percent of DOE's budget. And it is that attitude expressed to 
this subcommittee last week that has failed the American 
people.
    The time for excuses is over. My frustration is for several 
reasons: the lack of attention by the previous three 
administrations to tackle this problem and the amount of 
taxpayers' dollars that have been squandered and wasted because 
of mismanagement. I am doubly concerned with the Department's 
ability to manage its resources as we have just provided 
another $40 billion in stimulus funds for the Department to 
execute. We have a new administration, and they might be 
tempted to say, it is not our problem, we have just gotten into 
town. Let me be clear, I don't ever want to hear another excuse 
by a Department of Energy official on why they cannot get 
something as basic to running a large organization right for 19 
whole consecutive years.
    Today we will hear from Mr. Gene Aloise, Director of the 
National Resources Division of the Government Accountability 
Office, who will testify on over 12 reports that GAO has issued 
since 2006 on DOE's contract and project management. I want to 
thank Mr. Aloise very deeply for all of his hard work, and 
particularly his hardworking staff at GAO for their good work 
and dedication in evaluating government spending to improve 
cost-effectiveness for the American taxpayer.
    The committee also welcomes Mr. Jonathan Breul, fellow with 
the National Academy of Public Administration. Mr. Breul will 
report on the ongoing study requested by this subcommittee 
examining the operations of the Department's fiscal, personnel 
and contracting functions.
    I thank both of you for being here.
    Finally, I would want to note that I had invited Dr. Steven 
Chu today to testify, but given his recent appointment, I 
withdrew my request. Dr. Chu has promised me that this hearing 
will garner his full attention, and he has made a commitment to 
tackle these project management issues. As such, the 
representative for the Department of Energy is Ms. Ingrid Kolb, 
the head of the Office of Management for the Department. And, 
Ms. Kolb, I welcome you and thank you for your attendance as 
well. Ms. Kolb is a Federal employee of the Department and has 
been the Department's lead in cooperating with the National 
Academy study. Ms. Kolb, I would promise you that we will not 
make you the scapegoat for all of the Department's ills, but I 
thank you for being here.
    Generally, we may have follow-up questions for the record. 
I would ask that you expedite the response to these questions, 
and all Members who have additional questions for the record 
would please be asked to submit them to the subcommittee 
offices by noon tomorrow.
    [The information follows:]

          

    Mr. Visclosky. With those opening comments, I would like to 
yield to my partner Mr. Frelinghuysen for any opening comments 
he would like to make.

             Ranking Member Frelinghuysen Opening Statement

    Mr. Frelinghuysen. Thank you, Mr. Chairman. And good 
afternoon to everybody. First I want to thank you for holding 
this hearing. And I admit I am disheartened, substitute 
``aghast'' or ``appalled,'' to learn that the systematic 
problems at the Department of Energy identified so many years 
ago still exist today with little or no sign of improvement. 
While we all recognize the faults of the Department are not of 
this new administration's doing, they are indeed theirs to 
solve. So I do hope this hearing will provide some insight and 
instruction to the new administration. I think it is very 
important that we discuss these overarching issues before we 
start considering the fiscal year 2010 budget.
    With that said, let me welcome the witnesses from the GAO 
and NAPA. Your independent reviews and objectives, often 
critical analyses of the Department, provide a depth of 
knowledge that, in my opinion, is too often shielded from 
Congress. So I would like to thank you all for all you have 
done to highlight the issues we hope to cover in this hearing.
    I am also pleased to welcome Ms. Kolb from the Department 
of Energy. Where there is not a one-size-fits-all answer to all 
these management problem, it is particularly important that the 
product of today's discussion find its way back to the 
Department and indeed to Secretary Chu. So I look forward to 
your participation, Ms. Kolb.
    Last week the GAO provided the committee with a list of 16 
different reports that have been issued since the summer of 
2007 of which have been issued--seven of which have been issued 
in just the last 7 months. Listen to the titles of just three 
of those: Nuclear Waste Action Needed to Improve Accountability 
and Management of Doe's Major Cleanup Projects; Nuclear 
Material: Doe Needs to Take Action to Reduce Risk Before 
Processing Additional Nuclear Material at the Savannah River 
Site's H-Canyon, which I incidentally visited just last month; 
Nuclear Weapons: NNSA Needs to Establish a Cost and Schedule 
Baseline for Manufacturing a Critical Nuclear Weapons 
Component.
    Each title reflects what can only be described as a 
critical review of management deficiencies within our Nation's 
nuclear waste, nuclear material and nuclear weapons programs. 
Now, consider the fiscal year 2009 omnibus and stimulus bill 
that passed the House recently that include over $20 billion 
for these programs. Management problems in these programs put 
at risk billions of dollars, in addition to the health of our 
citizens. The Hanford site is a perfect waste example, billions 
of dollars in cost overruns and years of delay in schedule. It 
just seems to cascade through the entire organization.
    The National Academy of Public Administration has spent the 
last 10 months and would give them credit for reviewing what I 
could call the critical building blocks of any organization: 
human resources, financial and acquisition management. Their 
conclusions underscore fundamental and systemic problems across 
the Department that, if left unchecked, will constitute an 
enormous, if not historic waste of taxpayers' dollars.
    On the issue of human capital, their findings suggest, and 
I quote, ``a lack of urgency that the issue warrants,'' 
unquote. The Department, quote, ``lacks strong strategic 
focus,'' unquote.
    On fiscal management, the review finds, and I quote, ``The 
current DOE budget formulation process lacks a long-term 
planning and programming component,'' unquote. And the 
process--and this is in quotations--``does not effectively link 
goals established in DOE's 5-year strategic plan to specific 
program decisions emanating from it,'' end of quotation marks.
    As the report suggests, this is a hugely disappointing lack 
of progress, or simply a lack of attention to problems that 
have existed for some time.
    Mr. Chairman, the Department's inspector general concurs. 
Even the Department's agency financial report for fiscal year 
2008 identifies these very same issues. These are serious, 
serious problems, and to have seen them endure for as long as 
they have within this agency, whose mission is so vital to our 
environment and economic prosperity as well as our national 
security, is completely unacceptable.
    However, I am compelled to take a more hopeful approach 
today as it is the start of a new Congress, the start of a new 
administration. Indeed the Department has a new Secretary with 
a remarkable record of achievement. Perhaps this overhaul is 
exactly what the Department needs. I certainly hope so.
    So, Ms. Kolb and the entire Department, I would caution 
that the grace period will be extremely short. I, along with my 
colleagues on the dais, will expect an immediate improvement. 
Your mission is simply too great and the consequences too dire.
    I thank all of you for your service that you provide 
Congress and to the public, and we look forward to your 
testimony.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Frelinghuysen, thank you very much.
    [The information follows:]

          

    Mr. Visclosky. And for all the witnesses, your entire 
testimony will be entered into the record.

                       Testimony of Eugene Aloise

    Mr. Aloise, if you would want to begin, please.
    Mr. Aloise. Mr. Chairman, Ranking Member, members of the 
subcommittee, I am pleased to be here today to discuss our work 
on contract and project management at DOE. GAO designated DOE's 
contract management at high risk in 1990, and it remains on our 
High-Risk List today. DOE's two largest offices, NNSA and EM, 
continue to experience significant problems completing projects 
on time and within budget. Together these two programs receive 
about $14 billion annually, roughly 60 percent of DOE's total 
annual budget.
    Strong congressional oversight will continue to be vital as 
NNSA embarks on a major initiative costing tens of billions of 
dollars to modernize the aging nuclear weapons complex and to 
clean up radioactive waste at sites throughout the country. 
Strong oversight is further warranted because EM, an 
organization already at high risk for fraud, waste and abuse 
and mismanagement, is getting about $6 billion in additional 
stimulus funding, in essence doubling EM's budget.
    In the nearly 3 years since I testified before this 
subcommittee on the Hanford Waste Treatment Plant, we have 
issued 12 reports, 9 at the request of this subcommittee, 
examining DOE's largest construction and cleanup projects. 
These reports detail a host of contract and management problems 
that have led to massive cost increases and schedule delays. 
Two of these reports examine the performance of DOE's largest 
construction and radioactive waste cleanup projects. When 
totaled, the cost and schedule increases just for the cleanup 
and construction projects we looked at is about $56 billion 
over initial cost estimates, and up to 111 years over initial 
schedule estimates.
    In summary, these reports documented that the cost 
increases and schedule delays that have occurred for most of 
these projects is the result of poor performance on the part of 
DOE and its contractors, including failure of DOE to follow its 
own project guidance and internal controls; initial cost 
estimates for projects that are not credible; insufficient and 
ineffective project reviews; approving construction before 
final designs are complete; poor technology development, 
including not knowing if the technology will even work before 
millions are invested in the project; insufficient DOE staffing 
and expertise; and a lack of open communication, mutual trust 
and close coordination.
    These construction and cleanup projects are located 
throughout the DOE complex, including the Hanford site, 
Savannah River, Oak Ridge and Los Alamos. By far, in our view, 
the two most critical construction projects for EM are the 
Waste Treatment Plant in Hanford and the Salt Waste Processing 
Facility at Savannah River. Until these construction projects 
are completed, EM cannot begin to address its two riskiest 
cleanup projects, removing the highly radioactive and hazardous 
tank wastes at both sites.
    Our work has found that the significant delays at both of 
these construction projects have added thus far billions to the 
overall cost of completing these tank waste cleanup projects. 
The project management failures that contributed to the delays 
include using a fast-track approach, which attempted to 
simultaneously design, build and develop the technology for the 
Hanford facility, and ignoring warnings about seismic 
standards, which led to a 2-year construction shutdown at two 
of the major facilities in Hanford and a costly redesign at the 
Savannah River facility, resulting in over a billion dollars in 
cost increases.
    Mr. Chairman, the list of examples of mismanagement at DOE 
goes on and is included in my written statement and in our 
issued reports. We are continuing to look at the major cleanup 
and construction projects, including the Mixed Oxide Fuel 
Fabrication Facility, known as the MOX facility, at Savannah 
River, a nearly $5 billion project managed by NNSA. Our 
preliminary work on the MOX facility has identified problems 
with NNSA's construction schedule. In our view, NNSA's schedule 
may be unreliable because it does not conform with best 
practices. As a result, NNSA cannot state with confidence that 
the project will be completed on time and within budget. We are 
working with NNSA to correct this problem.
    Mr. Chairman, there is some good news to report. DOE has 
taken steps to better understand the weaknesses underlying its 
project and contract management and has recently completed a 
root cause analysis and a corrective action plan. In addition, 
at least one part of DOE is getting contract and project 
management right. In our recent report on DOE's Office of 
Science, we found that more than two-thirds of that office's 42 
projects were completed or were under way from fiscal years 
2003 to 2007 were completed or being carried out within 
original cost and schedule targets.
    Science's ability to achieve its target is due in part to 
factors considered fundamental to effective project management, 
including leadership commitment to meeting cost and schedule 
targets; appropriate management and technical expertise; 
disciplined, rigorous implementation of project management 
policies; and frequent independent management reviews of 
projects.
    Until EM and NNSA adopt these principles and consistently 
complete projects on time and within budget, cost overruns on 
projects will continue to drain the Department's resources, and 
excessive schedule delays will affect the Department's ability 
to effectively carry out its mission.
    Mr. Chairman, that concludes my remarks. We would be happy 
to respond to any questions you or members of the subcommittee 
may have.
    Mr. Visclosky. I appreciate it very much.
    [The information follows:] 

          

          STUDY BY NATIONAL ACADEMICS OF PUBLIC ADMINISTRATION

    Mr. Visclosky. Mr. Breul.
    Mr. Breul. Thank you, Mr. Chairman, members of the 
committee. My name is Jonathan Breul, and I am a fellow at the 
National Academy of Public Administration and Chair of an 
ongoing Academy study of three of the Department's major 
mission-support functions: human resources, procurement and 
financial management. The Academy is a congressionally 
chartered nonprofit institution established in 1967 to help 
governments at all levels effectively respond to current 
circumstances and changing conditions.

                         PRIOR ACADEMY STUDIES

    The Academy's association with the Department of Energy 
began in 2003 when the House Interior Appropriations 
Subcommittee asked the Academy to asses a comprehensive 
reorganization and the procurement and financial management 
operations in one of the Department's smaller program offices, 
the Office of Energy Efficiency and Renewable Energy, EERE. 
Then in 2005, the House and Senate subcommittees asked the 
Academy to undertake a management review of the Department's 
Environmental Management Program, focusing on procurement and 
project management, as well as an assessment of human resource 
operations.
    As part of the analysis undertaken at that time with the EM 
study, the Academy examined the workload planning methodologies 
used by the Nuclear Regulatory Commission, the Naval Facilities 
Engineering Command and the Army Corps of Engineers. Chief 
among the challenges facing EM was a significant mismatch 
between the work EM was asked to perform and the staff 
resources required to perform it. In particular, the Academy 
analysis raised questions about EM's capacity in areas of 
project management, cost and price analysis, safety, quality 
assurance, acquisition and contract administration. The panel 
found that EM staffing allocation would have to be increased by 
at least 200 FTE over budgeted levels in order to meet 
performance expectations.

                     REASONS FOR THIS CURRENT STUDY

    The Academy panels for EERE and EM noted that many of the 
problems found in human resources and procurement could not be 
resolved by the program offices acting alone because of the 
critical role of the departmental human resources and 
procurement offices in the execution of those activities. As a 
result, last year this subcommittee asked the Department to 
again contract with the Academy to examine these mission-
support activities, as well as those in the area of financial 
management, and to recommend steps to improve how they 
function.

                 IMPORTANCE OF MISSION SUPPORT OFFICES

    Let me begin with the challenges facing the Department as a 
whole. To accomplish the Department's important mission, the 
Secretary and the Department Secretary, when confirmed, will 
depend upon the Department's program assistant secretaries to 
achieve program results. In order to be successful, those 
program assistant secretaries must in turn rely on departmental 
support organizations for human resources, procurement, and 
financial management resources.
    While each of these mission-support functions is important 
in and of themselves, they only really matter in the context of 
the Department's larger mission, and the test of these 
functions and how they contribute should be the measure of 
success in the Department's operating programs.

             NEED FOR STRONGER MISSION SUPPORT ORIENTATIONS

    We have identified two critical challenges in this regard. 
First is a need for the mission-support functions to strengthen 
their mission focus and their orientation towards mission-
support activity. These three mission-support offices, and most 
notable among them Human Resources, need to develop a stronger 
mission-support orientation.
    During our interviews throughout the Department, from 
lower-level staff to program assistant secretaries and other 
senior program leadership, Academy staff consistently heard 
concerns that the departmental mission-support offices are not 
focused on supporting the mission of the program offices. They 
are not meeting mission requirements, and they are not driven 
by customer needs. It is the Academy's conclusion that the 
service delivery strategies for these three mission-support 
offices needs to reflect a stronger customer service 
orientation.
    The second challenge is the need to better integrate these 
three mission-support offices in order to support and provide a 
coordinated approach to providing their services to the program 
divisions. At present they operate independently of one 
another. There is no formal ongoing mechanism for coordination, 
and we view this as a serious problem.

               MOST CRITICAL PROBLEMS IN HUMAN RESOURCES

    Let me begin with the human resource area. Of the three 
mission-support offices we have looked at, by far the most 
critical problems are in the human resources and workforce 
area. First, many of the Human Resources Office customers, lack 
trust and confidence in that office's ability to deliver 
quality and timely human resources services.
    Secondly, the office lacks a strategic focus and any formal 
ongoing mechanism for working collaboratively with the 
Department stakeholders to develop departmentwide human 
resource strategies. As we began this study and interviewed 
officials at the Assistant Secretary and Deputy Assistant 
Secretary level, a recurring theme was great dissatisfaction 
with the staffing services, which include classification, 
recruitment and hiring. When Academy staff asked one senior 
official whether his organization needed more staff to perform 
its mission, he responded, ``I do not know because I have never 
been able to fill all of my vacant positions.'' His response 
was illustrative of the frustrations we have heard from many 
DOE headquarter officials.

                  SPECIFIC PROBLEMS IN HUMAN RESOURCES

    The functions of filling positions are mission-critical to 
the program, for the staff and for other mission-support 
offices. The panel believes that the headquarters Human 
Resources Office's inability to meet its customer needs in this 
area is compromising DOE's mission.
    As the Academy dug into this issue, we found a number of 
very specific factors I would like to just explain quickly. 
First is that the DOE is not actively managing departmentwide 
positions. As a result, Human Resources is not able to depict 
the vacancy fill rate of the Department, or quantify the 
workload required to fill actual or anticipated vacancies. The 
panel finds it troubling that Human Resources does not use 
vacancy fill rate as a primary metric for how they operate.
    Secondly, regulatory compliance seems to be the primary 
driver for the Human Resources Office. The office is 
responsible for ensuring that the Department's human resource 
transactions and managements comply with regulations. However, 
the Academy is concerned that this regulatory compliance focus 
overshadows their ability to provide creative and innovative 
solutions to the servicing programs.
    For example, the panel has recommended that the office work 
with customers to develop alternatives for using DOE's field HR 
offices to provide staffing support for the headquarters. Human 
Resources' response has been that they have regulatory concerns 
with some of these field human resources offices. In the 
panel's view, this shows a lack of customer focus and 
inadequate management of the Department's human resources. 
Where there are legitimate concerns, Human Resources should 
work to fix them. Where the Human Resource functions are 
complying with regulations and are providing good services, the 
office should explain how these offices might be used more 
fully to provide high-quality mission support for the other 
parts of DOE.
    Third, the Human Resource Office is not taking advantage of 
staffing flexibilities that are already available. At the June 
2008 Academy panel meeting, the prior Chief Human Capital 
Officer was lamenting on his office's difficult task of 
ensuring the Department complies with the Office of Personnel 
Management's regulations with the so-called ``rule of three,'' 
which guides how you deal with veterans' preference in the 
staffing process. In the past, many agencies have complained 
about these regulations and how they have hindered them from 
hiring individuals with superior job qualifications. However, 
since the passage of the Chief Human Capital Officers Act in 
2002, OPM has authorized alternative ways of assessing job 
applicants, called ``categorical rankings.'' The Human Resource 
Office has only now begun to explore these flexibilities, and 
until they begin to use these more fully, the DOE will continue 
to miss opportunities to find the best person for a job and 
increase the amount of time available to fill key positions 
across the Department.

                   PROCUREMENT AND PROJECT MANAGEMENT

    Let me turn to procurement and project management. A major 
issue that the Academy examined during its study of the EM 
programs was the length of time it took to execute major 
procurements. As you know, the GAO did a study in 2006 which 
said that delays in obtaining the required review and approval 
from DOE headquarters caused an average 5-month delay in 
contract award. We looked at this and traced a large part of 
the delays to the Department's business clearance process, 
where the headquarters Procurement Office, the Office of 
General Counsel and others review various documents generated 
through the contract award process for large procurements. 
Delays in that process were a constant frustration and were so 
for the EM program and contracting officials.
    Because many of EM's contracts are in the tens to hundreds 
of millions of dollars, the relatively low threshold of $5 
million compounded the program. Although the business process 
was not under EM's control, the Academy made a series of 
recommendations to improve the process, recommending that they 
raise the review level to $100 million. The Procurement Office 
subsequently raised the review level to $50 million in partial 
recognition of the problem.
    We also recommended a reengineering review of the business 
clearance process to find ways to reduce the time it took. We 
have not yet completed an assessment of that effort, however, 
and disappointingly, initial indications are that while some 
improvements have been made, there has been no major reduction 
in procurement lead times.
    During our look at EM, we spent a considerable time 
examining EM's project management activities. We found a 
workforce with insufficient numbers and training to effectively 
oversee contractor employees, a lack of Federal cost-estimating 
capability, and a workforce that lacked proficiency with 
principles of earned value management and project tracking.

                 OFFICE OF THE CHIEF FINANCIAL OFFICER

    Let me turn to the Office of the Chief Financial Officer, 
the third of the three mission-support offices we were asked to 
review. Overall, we found the CFO's office has developed a much 
more strategic approach to guide its operations than the Human 
Resources and Procurement Offices. And there were frankly very 
few complaints about the services it provides the rest of the 
Department. Nevertheless, we found several issues that are 
included in our report.
    One issue is budget formulation. Even though many DOE 
programs have a multiyear dimension with significant long-term 
costs, DOE's budget formulation lacks a long-term planning and 
programming component to ensure that these long-term program 
goals and costs are efficiently and effectively met. DOE does 
have a process called the critical decision process in 
developing and approving and costing major capital projects, 
but this project is independent of and not formally integrated 
into the annual budget. So we have made recommendations to add 
a formal long-term planning and programming component, and to 
initiate that process earlier in the year, and to integrate it 
with a critical decision process.
    The allotment process is the second issue. Unlike virtually 
every other Federal department agency, the DOE allots its funds 
to field managers and field CFOs, not the program assistant 
secretaries whom Congress, the Secretary and the public hold 
accountable. And although the CFO procedures allow program 
assistant secretaries to provide direction to these field 
offices on how funds should be used through a separate 
``approved funding program'', the program assistant secretaries 
do not have the ultimate legal authority for controlling funds. 
The panel believes this practice violates the basic management 
principle of aligning program responsibility with funding 
resources. In addition, the ``approved funding process'' adds 
much more paperwork to an already burdensome process for 
issuing funds. So the panel has recommended the Department 
change its budget allotment process by allocating its funds to 
those program assistant secretaries and holding them 
responsible for allocating the budgetary resources to the 
field.

                IMPORTANCE OF MISSION SUPPORT FUNCTIONS

    Mr. Chairman, I want to reemphasize what I said at the 
beginning of my testimony. These three mission-support 
functions are essential to carrying out the missions of the 
Department. To the extent they don't have a mission-oriented 
focus, they compromise the ability of the Department's 
important ongoing program activities to accomplish their 
missions. And most important right now, that could hinder the 
Department's ability to inject urgently needed Recovery Act 
funding and investments into the economy as quickly as 
possible.
    Mr. Chairman, this completes my testimony. I must add that 
the Academy has enjoyed its association with this subcommittee, 
and we look forward to continuing service. I also want to add 
that we, the Academy panel and its staff, have had a very 
interactive, collaborative relationship with the Department 
throughout this series of studies.
    Thank you.
    [The information follows:]

          

    Mr. Visclosky. We will hear from you, and the bells have 
rung. There is a 15-minute vote and three subsequent 5-minute 
votes. So I think what we will do is we will take your 
testimony, recess, and then to the extent Members can come 
back, that would just be just terrific, so we can then proceed.

                        Testimony of Ingrid Kolb

    Ms. Kolb. Thank you, Mr. Chairman. After hearing the 
testimony of the two gentlemen on my right, I am not sure even 
where to begin, so I will begin--first of all, it is a pleasure 
to be here with you this afternoon to talk about the steps the 
Department of Energy is taking in order to improve project 
management, as well as our efforts to be removed from the GAO 
high-risk list. And I will also address the issues that 
Jonathan Bruel talked about from the NAPA study, mainly in the 
areas of acquisition, human capital, as well as financial 
management.
    Beginning with project management, first of all, Mr. 
Chairman and members of the subcommittee, Secretary Chu had 
asked me to convey to all of you his sincere and serious 
commitment to improving project management at the Department of 
Energy. It is something that he is passionate about. When he 
was the Director of the Lawrence Berkeley Laboratory in 
California, he successfully completed large major construction 
projects, and he knows what it takes to get that job done. He 
intends to use those same techniques to improve project 
management within the Office of Environmental Management as 
well as within the NNSA. So he wanted me to make sure that I 
conveyed his sincere commitment in that area.
    Let me bring you up to date on where we are on project 
management at the Department. First of all, I think it is 
important to note that despite some of the visible failures we 
have had in project management, the fact is that most of our 
construction projects are completed on cost and on schedule. In 
the last 3 years, 76 percent of the projects that we completed, 
there were 50 projects, 76 percent of them were completed on 
cost and on schedule, and 75 percent of those were within NNSA, 
and 100 percent were within the Office of Environmental 
Management. So the glass is not as empty as it would appear.
    I do agree with GAO that we need to make improvements, 
there are still too many large projects, and very visible 
projects, that have failed, and we need to minimize those 
failures. The track record in managing large projects, our poor 
performance has harmed the Department's credibility with 
Congress, with all of you, and it has also kept us on the GAO 
high-risk list since 1990, and I share your concern that we 
have been on the list since 1990 as well. It is unacceptable.
    I am pleased to report that we are making progress, and I 
hesitate to say that, but we absolutely are, and I think just 
the fact that GAO changed our designation on the GAO high-risk 
list from the entire Department being covered by the high-risk 
to two of our organizations, and granted they are two of the 
largest organizations being covered, but it does show that we 
are making some progress and that we are on the right track.
    We have developed at this committee's direction a 
corrective action plan. We did that last year. And in that 
corrective action plan, we have eight very important measures 
that we believe, once implemented, are going to result in 
sustained measurable and significant performance improvement.
    We think that we are on the right track, and one of the 
things that I believe is different this time--Mr. Chairman, 
that we were making progress, that we are taking corrective 
action. The thing that is different this time is we developed a 
root cause analysis ourselves at the prompting of GAO. They 
advised us to do this, and we took their advice, and we sat 
down and we determined what we need to do as a department in 
order to move ahead on project management, what are our 
deficiencies. We didn't have a contractor do it. We did it 
ourselves. We found it to be a very refreshing and important 
step in the right direction.
    We took the outcome of that root cause analysis, and we 
developed this corrective action plan with the eight measures 
for success. In addition, we have set forth for ourselves in 
that corrective action plan some very rigorous performance 
measures, and we are using our performance against those 
measures to gauge our progress, and we are reporting our 
progress to GAO and to OMB on a quarterly basis. So they are 
monitoring our progress as well.
    I just wanted to talk for a few moments about the 2009 GAO 
high-risk update. And Gene Aloise referred to that in his 
testimony. There were some things in that update that we 
thought were very positive and have signaled to us that we are 
heading in the right direction. First of all, GAO acknowledged 
that we have established a much more robust and much more 
disciplined approach to contract and project management. They 
had not said that in previous years.
    Also, GAO has credited us with completing three of the 
criteria, three of the five criteria that it will take to be 
removed from the GAO high-risk list. The first one is to have 
strong committed leadership. We had that during, I would say, 
the last 4 years, and we are certainly going to have it under 
Secretary Chu. The second criteria is to demonstrate progress. 
GAO has said that we are instituting corrective actions 
properly and that we are making progress. They have given us 
credit for that. Third, they have credited us for coming up 
with a corrective action plan that is based on a root cause 
analysis.
    The two criteria that remain that we have not succeeded in 
implementing are, first of all, having the capacity, meaning 
the people and the resources, in order to get the job done. And 
the fifth criteria is that we have not validated the results--
we have not validated the results of our progress. So those are 
the two areas that we are going to be focused on over the 
coming years.
    As Mr. Aloise also said, the Office of Science has made 
substantial improvements in its project performance, and we are 
very pleased about that. And moving forward, we are going to 
focus on NNSA, we are going to focus on EM, and we are going to 
use the best practices that the Office of Science has employed 
to make improvements in those two other organizations.
    And Dr. Chu is very familiar with the work of the Office of 
Science, given that he was a laboratory director and was 
overseen by the Office of Science. He knows those strategies, 
he knows those techniques. He has already had several meetings 
with the person who is in charge of project management at the 
Office of Science, and he has instructed that person to work 
with the Office of Environmental Management on some of the 
techniques he has used. EM is already starting to implement 
some of those techniques. So I think you are going to see a 
very aggressive movement forward to ensure that we are making 
improvements in both EM and NNSA.
    Moving on to the NAPA study, Mr. Bruel has already covered 
the areas where NAPA reviewed our Department, but let me just 
share with you what our reaction is to his findings. First of 
all, in the area of mission support, we agree completely that 
the staff offices at the Department of Energy need to be much 
more focused on the mission. That is why we exist, to focus on 
the mission. At his very first senior staff meeting with 
Department of Energy senior staff, Secretary Chu made it clear 
that he knew this was an issue and that he was going to ensure 
that the staff offices were mission-focused. So I can assure 
you that the Secretary is going to be addressing that issue 
over the next few months.
    In the area of human capital, we agree completely that the 
hiring process needs to be fixed, and Secretary Chu, about a 
week and a half ago, called me personally and asked for my 
assistance in developing an action plan to improve the hiring 
process. He said I could have 30 days to get the action plan 
completed, and it will be on his desk before March 16th. I have 
pulled together a team of people from across the Department who 
I think have very good ideas in this area, and NAPA has very 
generously loaned us two of their experts in human capital to 
assist us in this effort. So we will have an action plan ready 
by March 16th, and I can assure you that it will be quickly 
implemented and urgently implemented because we need to have 
people on board.
    In the area of acquisition----
    Mr. Visclosky. Ms. Kolb, I hate to interrupt you, but we 
have about 30 more seconds----
    Ms. Kolb. In the area of acquisition, Mr. Bruel covered the 
fact that NAPA had made several recommendations for 
improvement. We have either implemented all of those 
recommendations or are in the process of doing so.
    And in financial management, again, NAPA has made several 
recommendations that are under consideration. We are very 
supportive of the idea of long-term planning and budgeting, 
which I think you would be most interested in.
    So that concludes my testimony, and I am happy to take any 
questions after the break.
    Mr. Visclosky. I appreciate that.
    [The statement of Ingrid Kolb follows:]

          

    Mr. Visclosky. And the good news is there are now only two 
subsequent votes, so our absence now should not be too great. 
But for the witnesses, there is also coffee up here, and we 
will be back as soon as possible.
    [Recess.]

                         CONSTRUCTION PROJECTS

    Mr. Visclosky. The committee will come back to order, if we 
could. And Mr. Aloise--and again I thank all of the witnesses 
for your forbearance here.
    The first question I have is that you estimate that 14 
billion in more than 45 years has been added to the initial 
cost schedule estimates of 8 of 10 major NNSA and EM 
construction projects. It makes you wonder about the rest of 
DOE's projects that you did not review.
    Could you tell us what your definition, what the GAO's 
definition of a major construction project is; and how many 
more, if you can tell the committee, exist outside the scope of 
work you performed, to give us a sense of scale as to how large 
this problem may actually be.
    Mr. Aloise. Yeah. Of course, we cannot look at all the 
projects, so we looked at the 10 largest construction projects, 
which DOE defines as projects over $750 million. So those are 
the ones we looked at for construction projects.
    For cleanup projects, we looked at the 10 largest, which 
DOE defines as a billion dollars over 5 years. But you make a 
good point, Mr. Chairman. What we are talking about in my 
statement is only the projects we looked at in the last 3 
years. For example, in 1997, we reported that DOE terminated, 
before they completed, 31 construction projects at a cost of 
$10 billion.
    Mr. Visclosky. Can you give me that again? They 
terminated----
    Mr. Aloise. They terminated, before they completed, 31 
construction projects at a cost of $10 billion.
    Mr. Visclosky. Would you give me just one example, if you 
could, out of that? And with that example, what was happening 
at that site or facility?
    Mr. Aloise. One of the most famous ones is a facility--I 
mean, a building at Idaho, where they built a building--I 
believe it was a waste processing facility. And they developed 
a technology for the building after they built the building; 
and it would not fit inside the building, so they could not use 
it.
    Mr. Visclosky. And what year was that?
    Mr. Aloise. That was in the 1990s, or maybe before.
    Mr. Simpson. Before I got in Congress.
    Mr. Frelinghuysen. I thought you were in on the project.
    Mr. Visclosky. You stole my line.
    Mr. Aloise. I can get you the details on that.
    [The information follows:]

    For more information, see GAO, Department of Energy: Opportunity to 
Improve Management of Major System Acquisitions, GAO/RCED-97-17 
(Washington, D.C.: Nov. 26, 1996).

    Mr. Visclosky. Your testimony also indicates that 9 out of 
10 major EM cleanup projects had experienced cost increases, 
and that an additional $25 billion to $42 billion, a fairly 
wide range, will be required to complete these cleanup 
projects; and again a rather wide range, adding 68 to 111 years 
for completion.
    How do cleanup projects differ from the construction 
projects, if I could ask?
    Mr. Aloise. Well, the cleanup projects, in some cases, rely 
on the construction projects. For example, if you look at 
Hanford, that tank waste farm cannot be cleaned up until the 
WTP is built, so they can process the high-level waste and the 
low-level waste.
    So there are many--like Savannah, in Savannah River, the 
Salt Waste Processing Facility, the construction project has to 
be completed before the cleanup project can really get going on 
tank waste there.
    So there is kind of an interdependence on each other.
    Mr. Visclosky. When you have a construction project at a 
cleanup site, would you potentially have evaluated that as a 
construction site?
    Mr. Aloise. For example, the Waste Treatment Plant at 
Hanford, we looked at that as a construction project.
    Mr. Visclosky. Okay.
    Mr. Aloise. But we are looking at the whole cleanup 
strategy there, too.
    Mr. Visclosky. Right. And I think I am getting old and you 
took my breath away when you mentioned the 31?
    Mr. Aloise. Thirty-one construction projects.
    Mr. Visclosky. Thirty-one projects that just were never 
completed?
    Mr. Aloise. Never completed, right.
    Mr. Visclosky. Are there a significant number of other 
construction projects out there that you did not evaluate from 
a numerical or dollar standpoint?
    And if you answered that, I just missed it.
    Mr. Aloise. Well, in total, there are about 100 
construction projects worth about $90 billion at DOE. There are 
about 97 nuclear cleanup projects worth about $230 billion. Our 
review where we looked at the 10 major construction, 10 major 
cleanup projects, in terms of money, we looked at about a third 
of the money for those, both cleanup and construction projects.
    Mr. Visclosky. It seems when it comes to EM and NNSA, Mr. 
Aloise, that one of the outcomes of consistently 
underestimating costs is that the outyear funding requirements 
get squeezed to pay for the increased costs.
    I am also concerned that projects are portrayed as one 
cost, Congress makes a commitment, construction starts, and 
then we find out we are on the hook. Would you comment on this?

                         EM CLEANUP ACTIVITIES

    And is progress on other EM cleanup activities being 
delayed because now we have got to accommodate the increased 
cost of these projects that were not anticipated in the 
original budget submissions?
    Mr. Aloise. EM's annual budget is relatively fixed, so if 
they have large cost overruns or budget delays, either the work 
has to be scoped down or you have to rob Peter to pay Paul to 
get money from another project to continue. So it does--these 
cost increases and schedule delays, it is a good point, it is 
not just a matter of dollars and cents, it actually affects the 
mission of DOE.
    So, yeah, it does tend to affect other projects.
    Mr. Visclosky. And how has your interchange with DOE been 
as far as cooperation and hearing you out on this?
    Mr. Aloise. Actually, it has been very good. We have a 
great working relationship with them. We do not always agree, 
but they have taken our recommendations. I know I mentioned a 
lot of them are still open, but they have implemented----
    Mr. Visclosky. Fifty-seven to be exact?
    Mr. Aloise. Yes, 57 of them.
    Mr. Visclosky. Out of 60?
    Mr. Aloise. Right. Exactly, 59--57 out of 59. I know we 
said 60.
    Mr. Visclosky. Okay.
    Mr. Aloise. But, for example, we recommended that they look 
at readiness levels, for technology readiness levels--a common 
practice at DOD and NASA is to see how mature your technology 
is before you go ahead and move forward with a design. And DOE 
is looking at that.
    They have got a draft handbook. They are looking at some 
pilot projects. They have not fully implemented it yet, and 
that is why that recommendation is still open, but they have 
taken our suggestions.
    Mr. Visclosky. Have things improved the last year or two? 
Not so much as cooperation, and I do appreciate that--that that 
is going on--but the follow-up?
    Mr. Aloise. It has----
    Mr. Visclosky. On average.
    Mr. Aloise. We have seen improvement, as Ingrid mentioned, 
in terms of meeting some high-level goals to get off the High-
Risk List, management commitment to this. I know the former 
Secretary was very committed to this. We met with the deputy 
secretaries several times to talk about how would they get off 
the High-Risk List. In fact, they told me that the Secretary 
was embarrassed by this situation at EM.
    But the problem is, when you get down to the working level, 
we are still--as I sit here today, we are still--I know some of 
the same problems we have reported on years ago are still 
happening today with cost estimating, with project management. 
It is not through the entire agency yet, corrective actions.
    Mr. Visclosky. Let me ask one more question, and I will 
turn it over to Mr. Frelinghuysen.
    According to your testimony again, Mr. Aloise, it seems 
that bad cost estimating is not the only factor in increased 
baseline costs. For example, the Salt Waste Processing 
Facility--and you cited that in your testimony--had cost 
increases and schedule delays due to inadequate communication 
between officials on-site and at DOE headquarters. If you could 
elaborate on this, why would it take 17 months for project 
managers to address concerns of the Defense Nuclear Facility 
Board? If I remember correctly, we had the same problem at 
Hanford. How can this kind of delay--I mean, 17 months----
    Mr. Aloise. Mr. Chairman, DOE did not learn a lesson from 
Hanford at Savannah River. From what we were told, the Savannah 
River folks, when they found out about the Safety Board's 
concern about seismic standards, were trying to get an answer 
from headquarters about what to do. Should they build to one 
set of standards or another set of standards? And they frankly 
were left on Call Waiting. It was 17 months later when they got 
the decision to go with the higher standards.
    Well, they were already 50 percent into design by that 
time, so they had to go back and redesign. That cost several 
hundred million dollars and several years' delay.
    It was the same situation at Hanford with the seismic 
standards. They debated for 2 years between the Safety Board 
and DOE before they eventually went to the higher standards.
    Mr. Visclosky. Mr. Frelinghuysen?
    Mr. Frelinghuysen. Thank you, Mr. Chairman. What measures 
have you put in place to avoid this happening again?
    Mr. Aloise. Well, we are constantly looking at the 
different projects going on. For that particular project at 
Savannah River, DOE has developed a seismic panel. And they are 
now looking earlier in the project design at seismic concerns, 
which is a good thing.
    Mr. Frelinghuysen. I heard about that when I was down 
there.
    Mr. Aloise. Yeah.
    Mr. Frelinghuysen. That could have been avoided?
    Mr. Aloise. Yes. You know, if that was happening earlier in 
the project design----
    Mr. Frelinghuysen. Hell, every time we design a project, 
does not someone look at the whole issue of seismic, the 
seismic equation?
    Mr. Aloise. Yeah, but sometimes----
    Mr. Frelinghuysen. Should they not be?
    Mr. Aloise. They should be and they do, but sometimes they 
do not always listen or make a quick decision.
    Mr. Frelinghuysen. Mr. Aloise, in totality from your 
remarks earlier, the worst case scenarios for review of the 22 
major construction and cleanup programs suggest that the 
Department may have underestimated targets--and I think these 
were your figures--by as much as $56 billion and 155 project 
years. I mean, that sounds like a high level of dysfunction 
here.
    Mr. Aloise. One hundred eleven years, yes.
    Mr. Frelinghuysen. One hundred eleven years, that is a lot. 
What can this committee do better to monitor this type of 
situation in the future, make sure it does not happen again?
    Mr. Chairman.
    Mr. Visclosky. If the gentleman would just yield, could I 
add an addendum? What can we do to correct the problem?
    I mean, in the end, the gentleman is right, we cannot 
ourselves do it. We are monitoring this. But is there something 
we can do to just----
    Mr. Aloise. Actually, this subcommittee has done a lot. One 
of the reasons we have seen the improvement we have seen at DOE 
is because of the pressure from this subcommittee on DOE, which 
focuses GAO's resources, limited though they are, on this 
process. We have made progress getting leadership commitment. 
DOE was serious about getting off the High-Risk List.
    Mr. Frelinghuysen. So you will indeed endorse some of what 
Ms. Kolb has said in terms of what she called ``making some 
considerable progress''?
    Mr. Aloise. Yes. But much, much more needs to be done 
because EM and NNSA are----
    Mr. Frelinghuysen. Do you also endorse--and I was unaware 
of this figure--that there are 50 projects, what was it, 76 
percent completed on schedule? Is that an accurate--I am sure 
it is accurate, but would you confirm its accuracy?
    Mr. Aloise. We can not confirm its accuracy. What we would 
look at is how big those projects are. Usually, if the project 
is under $100 million we find less problems with those 
projects. It is the major projects that we find major problems 
with.
    Mr. Frelinghuysen. So you confirm those 50 projects. Are 
they small?
    Ms. Kolb. I do not know how large all of them are. Some of 
them probably are smaller projects. And Mr. Aloise is right, we 
do a good job in managing smaller projects. It is the large, 
complex projects where we run into difficulty. And that is why 
one of the things that we want to do--and this is in our 
corrective action plan--is, instead of trying to take on these 
huge projects where we know it is going to be very difficult to 
be successful, to tackle these projects in chunks so that we 
can be much more successful.
    Mr. Frelinghuysen. You attack them in chunks, but in 
reality, once you make the commitment----
    Ms. Kolb. Yes.
    Mr. Frelinghuysen [continuing]. I mean, you are making a 
substantial commitment.
    Ms. Kolb. We are making a substantial commitment.
    Mr. Frelinghuysen. Financial commitment.
    Ms. Kolb. However, one of the things that we have done at 
the Department of Energy is, sometimes we have taken a huge 
project, for example, the waste treatment plant. The waste 
treatment plant really consists of a number of small projects. 
And looking back on it, if we had it to do over again, we 
probably should have, instead of trying to build the whole WTP, 
focused on different facilities and broken them into smaller 
projects. That way we probably would have been more successful.
    Mr. Frelinghuysen. Would you agree with that?
    Mr. Aloise. Yeah. Well, taking smaller chunks probably 
would put us at less risk, yes. But some of the things we 
recommended in the past were before you build something like 
the WTP to do a demonstration project, and DOE did not 
initially do that. Now they are doing demonstrations of certain 
parts of it.
    But it really starts at the beginning. When you have a 
project that massive, it might make sense to do a demonstration 
project first.

                              ORDER 413.3

    Mr. Frelinghuysen. Tell the committee about order 413.3. It 
was updated in July of 2006, which prescribes basic project 
management guidance for departmental and contractor activities. 
The order, by all accounts, is sound in its direction and 
policy.
    Mr. Aloise, can you discuss with any degree of precision 
where or how the DOE has failed in adherence to this policy?
    Mr. Aloise. Yeah, we actually think that order is pretty 
good. It is industry standards. We would like to see it 
followed. The problem is, in many cases it is not being 
followed.
    For example, at the waste treatment plant and at the bulk 
vit plant in Hanford, they followed a fast-track approach, 
which means you design, build and develop the technology all at 
the same time.
    We think that was a failure, and if they had followed 413, 
they probably would not be in the position they are today.
    Mr. Frelinghuysen. Why did they not?
    Mr. Aloise. They wanted to get it done.
    Mr. Frelinghuysen. We cannot be in the business of 
micromanaging things which ought to be left, obviously, to 
professionals.
    Mr. Aloise. Right. We found in many cases they are not 
following their own orders, that order, and they should be. And 
if they were, they probably would not have as many problems as 
they do.
    Mr. Frelinghuysen. So to Ms. Kolb, what--internally, what 
can DOE do to make sure that these orders are met?
    Ms. Kolb. Well, it comes down to leadership and ensuring 
that the staff follow the orders. I think the situation has 
gotten much better, because when Mr. Aloise was talking about 
the waste treatment plant and the fact that we did not follow 
413, that was some years ago that we did not follow 413. And we 
should have; we definitely should have.
    I think people have learned from those mistakes, and we are 
following it to a much greater degree. There are some 
circumstances where we have had to deviate. But if we make a 
conscious and thoughtful decision that everyone is aware where 
we have to have a deviation, those situations can be 
acceptable.
    But Mr. Aloise is right, we have to follow it. And my 
office is charged with ensuring that program offices do follow 
the order. And I agree with Mr. Aloise that trying to fast 
track projects is a big mistake. We have done this in the past. 
It has not served us well. And we are not doing that in the 
future.
    Mr. Frelinghuysen. I will yield back my time. I know we 
have got other members here, Mr. Chairman. And we have lost a 
few people by attrition. So that is not--it makes it maybe 
easier.
    Mr. Visclosky. Thank you.
    Mr. Berry.
    Mr. Berry. Thank you, Mr. Chairman. I do not think there is 
any doubt that we sure needed to have this hearing.
    For however long I have been on the committee it seems like 
it is the same thing every year. I just, for the life of me I 
cannot understand why the Department of Energy cannot get their 
act together. And I have heard all these things before, that, 
you know, we have got a new manager or we have got a new 
management plan or we have got a new idea or we are going to do 
something one of these days that will be right.
    And we keep paying these enormous bills, and it just does 
not happen; and we are back here next year to start the 
process, and we are hearing these same stories over and over 
and over again.
    And I just do not understand why somebody over there cannot 
get--I think this is where the definition of ``snafu'' came 
from. I cannot imagine anything more messed up, dealing with a 
more critical issue, than what the Department of Energy, and 
especially the part that deals with nuclear waste and other 
nuclear issues.
    I mean, I do not know who to direct that to. This makes my 
stomach hurt. I hate to come in here on this day when you guys 
are here. I do not know why it would not make any rational 
individual sick.
    Does it bother you guys?
    Mr. Aloise. Very much.
    Ms. Kolb. Of course.
    Mr. Berry. Why do you not do something about it?
    Ms. Kolb. We are trying to do something about it.
    Mr. Berry. I have heard that one before. I am sorry.
    Ms. Kolb. Yes.
    Mr. Berry. I am being unfair to you. It is probably one of 
the same three people last year. But that really is--that is 
just the way it looks to me. Everybody up here will tell you I 
am not a nuclear physicist. It is a widely known fact that I do 
not know anything about it. But I declare, I know adding and 
subtracting. And I just do not understand why we cannot get 
this straightened up and somebody over there get in charge, and 
let's make this thing work.
    Ms. Kolb. I agree with----
    Mr. Berry. Maybe we need to call the North Koreans in to 
consult with us.
    Ms. Kolb. Let's not do that.
    Mr. Berry. I do not think so. I am being silly now, but at 
the same time, damn, if you all ain't got a mess over there.
    Ms. Kolb. Yes. And I believe Secretary Chu understands what 
the challenges are. He has made a commitment to undertake those 
challenges. He is someone who has been very successful in his 
career, and when he sees a problem he goes after it.
    Now, you have mentioned that you have heard this before. 
And we cannot do anything about the past and what has happened 
in the past; all we can do is learn from that. And I will tell 
you, Secretary Chu has only been at the Department for about a 
month, and he already, as I mentioned earlier, has been meeting 
with the project management professionals in the Office of 
Science, where they have been successful, and he has been 
working with the Office of Environmental Management to make 
changes.
    So I am very encouraged by this. He is somebody who is 
taking the bull by the horns, and I really believe you are 
going to see some changes. And some of the issues that Mr. 
Aloise has raised--for example, lack of up-front planning in 
our corrective action plan that I talked about in our opening 
statement, my opening statement; the first item that is 
addressed is lack of front-end planning--we have to do a better 
job on that. And we will. So that is the commitment of the 
Department of Energy.
    And, Mr. Chairman, you asked the question, what can this 
committee do? I think what you are doing today. You can hold us 
accountable and ask us how we are doing. I think it is very 
effective.
    Mr. Berry. Thank you, Mr. Chairman.

                        EARNED VALUE MANAGEMENT

    Mr. Visclosky. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman.
    I apologize for not being here for the testimony, but I did 
read over your testimony last night and--stayed up all night 
reading your testimony last night and writing down thoughts and 
so forth that came up.
    Let me start off with this. Could you explain for me 
briefly--and if any of this has been asked already, or 
questions have already been asked and it is in the record, just 
say so and I will read the record. But could you tell me what 
projects' earned value management system is?
    Mr. Aloise. Yeah, that is an industry device used industry-
wide to show if a project is on budget and on schedule. And it 
is a tool we are glad that DOE is using. And, in fact, we talk 
about that in my statement, that we looked at the EVMs at the 
MOX facility, and we found problems with it. So while progress 
is being made, right now we are looking at ongoing projects and 
we are seeing some of the same problems.
    The EVM data is only as good as the schedule it is based 
on. And we looked at the schedule that that EVM data was based 
on for the MOX facility, which is a nearly $5 billion facility, 
and found out that it was, in our view, unreliable because they 
have not done a risk analysis, they have not performed the 
statistical analysis that needs to be done to give them the 
confidence to say their schedule is reliable.
    Yet, you know, DOE comes out with its statement that says 
we are on budget, we are on schedule. Well, it is our view 
right now that they do not know, not until they do a better job 
with their schedule which supports the EVM analysis.
    So we are working with them. They are well aware of our 
concerns, and we are working with them. And they plan to do a 
risk analysis of that schedule.
    Mr. Simpson. Let me get into something else, if I could, 
because I read your statements last night. And anybody would be 
stunned, as Mr. Berry is sickened, when you look at the major 
cleanup projects, the board you have got over here, the 24.7 
billion to 42 billion in life cycle cost increases and the 68 
to 111 years in delays.
    We have a tendency to think that if we had had proper 
contract management, project management, none of that would 
exist. But that is really not accurate, is it? I mean, there 
are reasons that you have increased costs and schedule delays 
that are beyond our control: The seismic activities at the 
waste treatment plant, there are legal issues that are being 
negotiated with States. Idaho and DOE have spent years trying 
to define all, and have come to an agreement recently.

                     SAVANNAH RIVER COST INCREASES

    There are new technologies that are developed along the 
way, things that were unanticipated when we put together the 
original cost estimate of what it would take to, as an example, 
clean up this site. And there are costs that are added because 
of improper contract management. The other one is the example 
where I think you said here, that Mr. Frelinghuysen mentioned 
of the seismic activity at the waste treatment plant there at--
was this at Savannah River?
    Mr. Aloise. Savannah River, yes.
    Mr. Simpson [continuing]. At Savannah River, that they knew 
5 months--the Defense Nuclear Facilities Board expressed 
concerns 5 months after the preliminary studies were started, 
and it took 17 months. They worked for 17 months on the 
existing project, which obviously costs some money. That is 
mismanagement, as far as I am concerned.
    So some of this is unanticipated costs because of things 
that we were dealing with, some things we do not know a lot 
about, and we are learning as we go. Others are because of 
contract mismanagement.
    Could you tell me, have you tried to break those out into 
what are legitimate cost increases that you might expect when 
you are dealing in an area that is new to us? I mean, if you go 
to the Army Corps of Engineers, you tell them to build a dam, 
they can go out and test the soil, they know what to build the 
dam out of, and they can pretty much estimate what the cost is 
going to be. And a lot of this stuff we are dealing with, like 
this waste treatment plant and stuff, is technology that we 
have not really used in the past.
    So I guess the question is, are some of these cost 
increases more a reflection of a realistic view of what it cost 
rather than the initial assumption of what it was going to 
cost? And how much of it is because of inadequate contract 
management, if you understand what I am trying to say?
    Mr. Aloise. I do. And let me try to answer that.
    And this is based on our years, many years of experience 
looking at these projects. First of all, many of these projects 
are one-of-a-kind, unique nuclear projects, never built before 
in the world. They do have a high degree of difficulty. We 
understand that.
    We are not looking for perfection here. We understand there 
are going to be schedule delays. We understand there are going 
to be cost increases; but cost increases of 200 percent, 150 
percent, no, there should not be. Schedule delays of up to 111 
years, no, there should not be.
    So when you go into the project----
    Mr. Simpson. But there is not a schedule delay of 111 years 
on any given project.
    Mr. Aloise. Total. It is a total. But there are schedule 
delays of decades.
    Mr. Simpson. Yeah, that is true.
    Mr. Aloise. When you claw through these projects, as we do 
literally and figuratively, number one, we look at the basic, 
how did you come up with your original cost estimate and 
schedule? And, for example, we are looking at that right now.
    We have asked the contractor in Savannah River, the one at 
the Salt Waste Processing Facility, ``How did you develop your 
schedule?''
    ``Well, it is based on our expertise.''
    ``Well, how many nuclear facilities have you built?''
    ``We have not built any nuclear facilities.''
    ``Okay, what guidance has DOE given us?''
    ``Well, they really have not given us any guidance.'' Their 
guidance is 8 years old. They have a draft cost estimating 
policy now.
    And so right there you know you are looking at a problem in 
the making. When they are doing their EVM analysis and the 
schedule is wrong----
    Mr. Simpson. Let me follow up on what you just said.
    I mean, we build a waste treatment plant--and I am not 
trying to make light of this; I understand that there are 
significant problems here. If you ask anybody that built a 
waste treatment plant, as they are trying to do at Hanford, how 
many of these waste treatment plants have you built, the answer 
would be zero because nobody has built one.
    Mr. Aloise. Right.
    Mr. Simpson. That creates some problems. But I understand--
I guess I am concerned also about how inaccurate the original 
cost estimates are.
    Mr. Aloise. True. These are one-of-a-kind, unique 
facilities.
    But if you have a company like you do with Bechtel, who is 
versed in building nuclear facilities--they have expertise--
what we are finding is that their estimates do not start with 
very good technical baselines. That goes down to the 
engineering, that goes down to the program development, you 
know, what do you want to build? How fast do you want to treat 
this waste? How long do you think it is going to take? All 
those kinds of issues. It goes all the way down to that.
    And we have a job for this subcommittee, looking right now, 
looking at how DOE develops its cost estimates. And we are 
going to look at that against best practices, so we will be 
able to report more on that later.

          RELATION OF STAFFING LEVELS TO CONTRACTOR OVERSIGHT

    Mr. Breul. Mr. Simpson, if I may?
    Mr. Simpson. Sure.
    Mr. Breul. I think there is a question of the workforce 
that might be relevant here as well, because we are talking 
about work that may not be done in terms of cost estimating or 
execution of earned value management supervision and so forth.
    When we looked at the EM program, we were startled to find 
that the staffing levels of that organization were 
significantly less than they had been a few years before. In 
2001, they had close to 2,500 people working in the EM program. 
In August of 2007, they were down to 1,370. There are about 276 
employees at headquarters, and just over 1,000 in the field; 
that is a reduction of over 50 percent.
    So there are far fewer people performing this kind of 
analysis, doing contractor oversight, and doing the kinds of 
things that are necessary to supervise these projects in a way 
that keeps them on schedule and on performance.
    Mr. Simpson. So you are saying that the 14,000 DOE 
employees compared to the 95,000 contract employees, that that 
ratio needs to change, that we need more oversight employees?
    Mr. Breul. The last count we had were, there are about 
34,000 employees, contract employees, working for the EM 
program; and I think it is down to 1,300-1,400 EM employees who 
are overseeing that.
    But they are the ones who develop the statements of work, 
the cost estimates, and so forth; and again, if some of that is 
inadequate, you are dealing with both a question of numbers of 
employees as well as the talent, skills, and experience that 
they are applying to that challenge. So they seem to be a 
little under what is needed. Our recommendation was that they 
needed to immediately begin at least the hiring of 200 people 
to give them the strength they need to do some of these 
functions.
    Mr. Frelinghuysen. If the gentleman would yield, so these 
are the sort of choke points in the DOE headquarters----
    Mr. Breul. Correct.
    Mr. Frelinghuysen [continuing]. That you were referring to?
    Mr. Breul. Correct.
    Mr. Frelinghuysen. Basically lack of institutional memory 
and----
    Mr. Breul. Well, they are subject to head count 
limitations, and then the difficulty of hiring and so forth.
    Mr. Frelinghuysen. Thank you.

                   DEPARTMENT OF ENERGY SPENDING PLAN

    Mr. Simpson. Given that in the stimulus package EM was 
given $6 billion, I have got to tell you, in all honesty, I 
have some serious concerns about throwing $6 billion into this 
system; and I am concerned that we are going to be having 
oversight hearings from now until the cows come home about how 
that was spent.
    Do you know, can Department of Energy use any of those 
funds to address these critical needs that you talk about?
    Mr. Breul. I am not familiar with the provisions and what 
authority they have.
    Ms. Kolb. Yes, the Department can. Yes.
    Mr. Simpson. I would suggest you do that.
    Ms. Kolb. We are.
    Mr. Simpson. Do we have a spending plan on that $6 billion 
yet?
    Ms. Kolb. It is not finalized. It is close to being 
finalized.
    Mr. Simpson. Is GAO concerned with throwing $6 billion into 
a system?
    Mr. Aloise. Yes, and we are developing our plans to look at 
it as well. But a lot of the increases you see on those cleanup 
projects were a result of, in the mid-1990s, their accelerated 
cleanup program, where DOE said, if you give us--Congress, if 
you give us more money, we will clean these up faster and 
quicker, and we will save $50 billion.
    That was, to quote a DOE official, a dismal failure. And so 
that gives us pause about this $6 billion and the accelerated 
use of it.
    So we have to be looking at that. We will be looking at 
that. I mean, there are definitely things that can be done with 
that money in terms of reducing the footprint on some of these 
sites. But we have to look at it closely.
    Mr. Simpson. I have heard people say that this will 
accelerate the cleanup and, consequently, lower the overall 
costs back to--the Jessie Roberson theory of cleanup. That then 
went by the wayside. But you know, I look at some of this, you 
look in Idaho and you have got a trash compactor out there 
smashing drums that go to whip. I mean, if it is operating at 
full capacity, putting another billion dollars into it is not 
going to make it operate any quicker.
    Mr. Aloise. Right.
    Mr. Simpson. So there are some limitations that are not 
money. And in fact I was, I guess, taken aback throughout the 
testimony. I think there is only one comment in there about 
funding.
    Are some of these contract problems due to funding issues?
    Mr. Aloise. I cannot say specifically. We have never really 
had that come up as a major problem. Maybe you could address--
--
    Mr. Simpson. Unless it might be losing employees in EM that 
need to oversee these things?
    Ms. Kolb. Well, losing employees in EM, there was a 
conscious decision--this was during Assistant Secretary Jessie 
Roberson's time--to reduce the number of contracting officers 
and project management officials. That decision was carried 
out.
    I do not think, personally, it was a good decision. And EM 
is still recovering from that. But that was the approach that 
Ms. Roberson thought was the best at the time.
    Mr. Simpson. Well, these management controls are important, 
what we do here. And I think your reports are incredibly 
important. You say on page 9 of the GAO report that you 
concluded that property control weaknesses we identified, 
coupled with a lack of DOE oversight, created an environment in 
which property could be lost or stolen.
    Have we actually had any lost or stolen equipment, do you 
know, or is this just a situation----
    Mr. Aloise. We cannot tell because there is no oversight 
over their internal controls. This is at Hanford. This was--we 
looked at the internal controls in Hanford, where they are 
spending many tens of millions of dollars a month, and it is up 
to the contractor to look at the invoices and check on the 
invoices: Is the equipment being bought? Is it being tracked 
properly?
    And DOE is basically doing very little there. So we cannot 
tell what is going on because we do not have the information, 
and neither does DOE.

                    MEASURING CONTRACTOR PERFORMANCE

    Mr. Simpson. One quick one: On page 3 of your report you 
say that the reports identified issues, including inadequate 
systems for measuring contract performances. Are there bonus 
pay and pay for performance for contractors still within the 
system? I mean, we did some of that for a while. I do not know 
if we still do or not.
    Ms. Kolb. I believe so.
    Mr. Simpson. If we cannot adequately measure contractor 
performance, how do we base pay?
    Ms. Kolb. We can measure contractor performance.
    Mr. Simpson. Well, apparently there are inadequate systems 
for measuring contractor performance, according to the GAO.
    Mr. Aloise. In many projects, yeah.
    Mr. Simpson. Thank you.
    Mr. Visclosky. Mr. Davis.
    Mr. Davis. Mr. Chairman, thank you. I am fortunate enough 
to represent the rural section of Tennessee that has on the 
east the Oak Ridge National Lab, where K-25 and, currently, Y-
12 is a part of that facility, as well as the SNS, the 
Spallation Neutron Source, and a huge computer that is located 
there.
    But I also represent a district that has, in the southern 
part, a lot of employees that work at NASA, at the Redstone 
Arsenal Military Base; and then I have a considerable amount of 
folks that work at an Air Force base, at Arnold Air Force Base 
Research and Development. So the district that I represent will 
have--as my friend Mr. Berry from Arkansas said, it will 
actually have rocket scientists and mathematicians and 
physicians and farmers like me.
    What the President said--he basically looked at three 
different areas of this Nation that we have to address. 
Department of Energy obviously will be a major player in either 
carrying out, helping formulate, or bringing to the table an 
energy policy for this Nation of ours. As I look at some of the 
reports here, it makes me wonder if you are up to the task. And 
certainly I hope that you are.
    I know this much. In the late 1930s, early 1940s, when the 
Manhattan Project became a reality and Tennessee was chosen as 
one of those sites and workers came there and met the challenge 
to defend this Nation, they were up to the task as individuals. 
It is my hope that you are up to the task.
    A couple things I want to ask you about, and my friend from 
Idaho mentioned one of those. The $6 million: You apparently 
asked for about $6.4 billion, so you apparently had prioritized 
those dollars where you thought you could spend those, where 
there was a need for those, and where they could be actually--
over the next couple of years where you could help clean up 
perhaps some of the sites.
    But apparently you must have other expenditures as well. 
Could you kind of define for me what all of those different 
expenditures were that you basically told our administration 
when we put this $6-point-something billion into the budget?
    Either? Anyone?
    Ms. Kolb. I am not sure what additional expenditures you 
are referring to, sir.
    Mr. Davis. This extra $6 billion in the stimulus recovery 
package were dollars that were not budgeted this year, and so 
you have an extra $6 billion. You obviously identified this as 
an area where it was shovel ready, or would be within a short 
period of time.
    Ms. Kolb. We are in the process of identifying the projects 
where we will be providing that funding. And we have not 
finalized our plan yet. Very close.
    Mr. Davis. Then the formula you used for the $6.4 billion 
request, you used that same formula for the 6 billion, or will 
you start reauthorizing or reallocating those dollars? Will you 
use the formula that you initially used?
    Ms. Kolb. I am not sure, sir.
    Mr. Simpson. Would the gentleman yield?
    Mr. Davis. Yes.
    Mr. Simpson. I do not believe that was put in at the 
request of the Department of Energy. That was put in by the 
Senate.
    Ms. Kolb. That clarifies that.
    Mr. Davis. Thank the Senate.
    Mr. Visclosky. Thank you, Mr. Simpson.
    Mr. Davis. That is a lot of money.
    Ms. Kolb. It is.
    Mr. Davis. K-25 will be able to handle a lot of that money 
in case that you do not find a place to spend it.
    Ms. Kolb. So noted.

                                PENSIONS

    Mr. Davis. I also represent a large constituency, close to 
10,000 retirees from the Oak Ridge National Lab; and this is, I 
guess, more a local issue that probably--perhaps I should not 
ask here. But I must do this.
    Each year I have had a delegation from Oak Ridge, some of 
the retired employees at the Department of Energy; and their 
retirement continually shrinks, and retirement in other locales 
within the same Department of Energy either increases or 
maintains the level. We have brought this to your attention 
time and time and time and time and time again.
    It is my hope that as we engage over the next months, next 
year or two, that you will go back and visit this and explain 
to some of the workers in the district that I represent why 
there is such disparity.
    Ms. Kolb. I have met with representatives from CORRE on 
many occasions. As a matter of fact, I have this year----
    Mr. Davis. So have I.
    Ms. Kolb. I had the pleasure of talking with about 600 of 
the representatives from CORRE about the pension issue.
    Right now, as you can well imagine, our focus on pensions 
is to make sure that all the pension plans are fully funded in 
accordance with the Pension Protection Act. That is our first 
and foremost priority.
    We are more than happy to discuss this issue with your 
constituents at any time. You can feel free to give them my 
name and telephone number, and I will follow up with them.
    Mr. Davis. We have done that, and it is my hope that as we 
revisit this--this is probably not the proper place to do it, 
and Mr. Chairman, if it is not, you can slap my hand.
    But I do hope that we revisit this and look at it from the 
standpoint of equity at every other lab in the country.
    Ms. Kolb. Okay.
    Mr. Davis. Mr. Chairman, thanks, and I yield back my time.
    Mr. Visclosky. Mr. Davis, thank you very much.
    And Mr. Fattah has been very patient, and I thank the panel 
for their forbearance. I want to thank all the members for 
coming back very much.
    But if the gentleman would just hold for 30 seconds, given 
Mr. Simpson's clarification on the $6 billion, and whether it 
is the EM or others, I would look at it a different way and ask 
you this question.
    If you, the Department, cannot in a reasoned fashion, or 
believe in a reasoned fashion you can spend that much money, is 
there some sense at the Department you just say, Listen, we are 
human beings, we cannot spend $6 billion tomorrow morning 
wisely; we can only spend--give me a figure less than that--and 
not come to the conclusion that everybody here is going to yell 
at you for--and not you, but the Department for saying, No, we 
want to be honest with you. Congress voted for the money, the 
President signed it into law, but you know what, honestly, we 
just cannot use every last penny of it wisely.
    Is there some thought, when you are figuring out how to 
spend the $6 billion, maybe we cannot spend every last penny 
wisely?
    Ms. Kolb. We believe that we can spend it wisely. And I am 
glad that you went back to this issue, because Secretary Chu 
has talked with the entire senior staff about the Recovery Act 
and the Department's role in implementing the Recovery Act. He 
has made it very clear that this is an opportunity for the 
Department of Energy.
    We know that in the past we have not had the best 
reputation because of some of the issues that Mr. Aloise has 
raised. And Secretary Chu feels very strongly that this is our 
opportunity to show the American people that we can perform. 
And he said, We are going to do it. He has made that clear for 
us. We have no choice; we are going to do it.
    Mr. Visclosky. Okay. And I would simply emphasize my 
appreciation for people having defined benefit plans relative 
to the issue of pensions.
    So, Mr. Fattah, you have been very patient.
    Mr. Fattah. Mr. Chairman, I will be glad to yield any more 
time you need.

             NAPA RECOMMENDATION ON LOAN GUARANTEE PROGRAM

    But I did want to ask a question, Mr. Breul. You in your 
testimony said that one of the concerns of the Academy was the 
loan guarantee program officer being in the chief financial 
office versus over on the program side. This is the loan 
guarantee officer responsible for moving loan guarantees 
related to renewable energy and nuclear; is that accurate?
    Mr. Breul. No, this is the automobile program, I believe.
    Mr. Fattah. This is the automobile program?
    Mr. Breul. Correct.
    Mr. Fattah. Okay. And your view was that this person or 
this function should be where? Over in EM?
    Mr. Breul. Well, first of all, our sense, is that the 
function of the chief financial officer is an important one. It 
has a large set of responsibilities that deal with financial 
management, accounting, and budget. As I mentioned earlier, it 
needs some further strength in terms of long-term planning.
    But the loan program is essentially an operating kind of 
program; and seating that in a function and area that is 
primarily an oversight function for the Department as a whole 
could be a distraction, could be a misplacement, and that it 
might belong better in another location under an operating----
    Mr. Fattah. Where are the other loan guarantee programs 
housed?
    Mr. Breul. I am not sure. There is only one office so far.
    Mr. Fattah. There is a loan guarantee program for renewable 
energy we authorized in 2005.
    Voice. They are both in the same office.
    Ms. Kolb. It is in the CFO's office.
    Mr. Breul. In the CFO's office.
    Mr. Fattah. Okay. Is there functionally one person or one 
group of people?
    Mr. Breul. There are 15 or 17 people, I think.
    Ms. Kolb. There are about 20 people who work in the loan 
guarantee office. And the number of people who are in that 
organization is going to be expanding dramatically.
    And then there is a smaller team that is focusing on the 
auto loans.
    Mr. Fattah. Okay. Well, my question is really related to--
the Department has had a challenge in getting production on 
this side. And so I was just wondering whether you felt that 
was a function of where it was placed, you know.
    Mr. Breul. I think it is understandable it might have 
started there because you have got staff with financial 
management acumen, and loans are financial in their nature. But 
our sense was the Under Secretary for Energy might be a more 
appropriate place for it and get it out from that CFO.
    Mr. Fattah. For instance, we authorized in 2005 a loan 
guarantee program to be run by the Department in terms of 
renewable energy. We appropriated dollars in 2006 and 
throughout the next couple of years. No loans have gone out the 
door.
    This question of renewable energy is obviously an important 
one, and Secretary Chu--that I have a great deal of faith in--
has said that it is critical. The projection of this 
administration, new administration, is to, you know, double our 
capacity in terms of the generation of renewable energy.
    On the nuclear loan guarantee program, I raised a number of 
questions at our last hearing last year about the dearth of 
progress there. So I was just trying to figure out whether your 
judgment was that, in part, the challenge is, it is just 
improperly placed in the Department in terms of an impetus to 
move forward or whether there are other reasons why we are 
appropriating money and authorizing programs, but there is no 
action.
    Mr. Breul. The reason we encountered that question is that 
we were asked to look at the function of the CFO and the CFO 
organization. And this seemed a bit of an anomalous function in 
the midst of a CFO office. That is an uncommon kind of 
arrangement, and that was the reason that led us to suggest it 
might go elsewhere. We do not have that as one of the most 
serious problems that we have identified. It was a suggestion, 
though. We thought there would be a more appropriate location.
    Mr. Fattah. Any other views on why these loan guarantee 
programs are having such a difficult process of getting going?
    Ms. Kolb. I think part of it is because, during the 
previous administration, there was some concern about making 
sure that the loan guarantee program was structured properly, 
that it was stood up properly.
    There was a very methodical approach that was taken because 
there was an instance, I believe some time ago, where the 
Department of Energy, there was a loan guarantee program 
established--this is almost decades ago--and people still 
remember that it did not go well; and it was because it was 
fast tracked, so it did not go well.
    Mr. Fattah. This is definitely not on a fast track.
    Ms. Kolb. Yes. Yes.
    Mr. Fattah. This committee has taken this very seriously. 
The chairman last year budgeted the full amount to cover the 
actuarial cost on the loans. We really wanted to see some 
action.
    Ms. Kolb. Well, I should say that now it is on a fast track 
because Secretary Chu has put it on a fast track. And I believe 
his plan is to begin offering loan guarantees as early as early 
summer. So it is much faster than it would have been done 
previously.
    Mr. Fattah. Well, you know, over in Agriculture, you know, 
it takes about 5 months. It has been the practice to get loans 
out the door. So it just seems to be an issue.
    Ms. Kolb. Yes. Secretary Chu personally followed up with 
individuals at the Department of Agriculture and other agencies 
with loan guarantee programs to find out how they processed the 
loan guarantees. And that is where he developed ideas on how we 
should be doing it, as well, which he is having implemented.
    And I do not think the organizational placement really has 
anything to do with the performance of that office. It was the 
approach the previous administration was taking.
    Mr. Fattah. Well, Mr. Chairman, let me thank you for the 
time.
    And if I could just ask that whatever the plans are on 
these loan guarantee programs, if the committee could be 
provided some update about how the Department plans to proceed. 
And we are talking about billions of dollars that would be 
available in our economy to help move important projects along 
in terms of our energy needs.
    I can concur that perhaps the last administration had a lot 
of passivity as it might relate to moving these, but we would 
like to know what the future plans are. We can't do anything 
about the past; and if the committee could be made abreast, we 
would appreciate it.
    Ms. Kolb. We will follow up with you.
    [The information follows:]

                       Plans for Loan Guarantees

    On February 19, 2009, Secretary Chu announced a sweeping 
reorganization of the Department of Energy's dispersal of direct loans, 
loan guarantees and funding contained in the new Recovery Act 
legislation. The goal of the restructuring is to expedite disbursement 
of money to begin investments in a new energy economy that will put 
Americans back to work and create millions of new jobs. These changes 
include streamlining the application and documentation process, and 
providing additional resources to process applications and working with 
industry to attract viable projects while helping them navigate the 
process. And, in fact, the Department offered its first loan guarantee 
on March 20, 2009 to Solyndra, Inc., a California company which will 
construct a commercial-scale manufacturing plant for its proprietary 
cylindrical solar photovoltaic panels.

    Mr. Fattah. Thank you.
    Thank you, Mr. Chairman.
    Mr. Visclosky. I thank the gentleman, and appreciate his 
frustration. He has long been an advocate as far as renewable 
energy, and he has talked to me more than once about this 
program.
    In fairness to the Department, I would simply observe that 
the committee was adamant with DOE; given the nature of the 
hearing we are having today, that because this is a new 
program, there is not specifically an expertise that has 
resided historically in the Department--do this exactly right.
    Ms. Kolb. Yes.
    Mr. Visclosky. And so I would certainly publicly 
acknowledge that there was pressure from this side to make sure 
every ``I'' was dotted and every ``T'' crossed.
    But I share the gentleman's concern that we have an energy 
crisis, and we ought to be about our business.

                POSSIBLE PLACEMENT OF HR FUNCTIONS IN EM

    Getting back to the $6 billion as far as EM, Mr. Breul, one 
of the questions I would have is, given the circumstances at 
EM, would it make more sense, given the additional infusion of 
money, let alone the annual appropriation, for them to have 
their own hiring and personnel function?
    Mr. Breul. I think the short answer on that is, No, I do 
not think that is necessary. There is authority already in EM 
for hiring staff at the grade 15 level and below. They have 
that in some of the field offices. The EM office in Richland 
and the consolidated business office in Ohio both provide 
comprehensive HR support that includes hiring.
    So our sense is that those things are not only present, but 
the feedback we are getting is that they actually work well, 
that the office is being supported where those kinds of 
authorities are actually working reasonably well and are 
getting good feedback.
    Where I think the problem is more severe is with the 
headquarters, in the headquarters human resources office. There 
is where there is more of a choke point. And, in fact, it might 
be sensible to move some of those activities into some of the 
field locations outside of Washington, DC, where they could get 
employees, retain the HR specialists more easily than you can 
in posting someone in the Forrestal Building or in the 
Washington area.
    Ms. Kolb. That is a suggestion that we are actively 
considering in the development of our action plan on hiring.
    Mr. Visclosky. On contractor performance--and I forget the 
exact interchange on the questions, and there was a question 
about how bonuses are determined and things--am I correct that 
the manager at the Hanford waste site got a significant bonus?
    Ms. Kolb. I don't have that information, sir.
    Mr. Visclosky. If you could report back to us on that.
    Ms. Kolb. Yes.
    [The information follows:]

                        Determination of Bonuses

    Senior Executive Service employee bonuses are determined based on 
performance. Specifically, the yearly performance closeout assesses 
Department of Energy executives in two critical elements: (1) Key 
Programmatic Accomplishment and (2) Key Leadership Attributes. Based on 
these ratings, each Secretarial officer is authorized to nominate his/
her exemplary performers for a performance bonus and/or pay adjustment 
based on their respective rating following Departmental policy on pay 
increases. For the Department of Energy, the bonus pool for Fiscal Year 
2008 was set at 9% of the total pay for all career SESs in each 
organization. An executive that merits an ``outstanding'' rating merits 
a mandatory bonus of 12-20% of pay. A ``Meets expectations'' rating 
merits a discretionary bonus of 5-9% of pay.
    Once ratings and award recommendations are made by DOE offices, DOE 
convenes the Performance Review Board (PRB) to review all 
recommendations to ensure consistency. Once this process is completed 
the final recommendations are sent to the Senior Review Board 
(consisting of the Deputy Secretary, the Under Secretaries, the General 
Counsel, the Chief Human Capital Officer and the Director of 
Management) that reviews the PRB results and makes a final 
determination.
    The manager of the Hanford Waste Site received performance awards 
over a three-year period. In 2005, the manager received $13,000; in 
2004 he received $20,000; and, 2003 he received $18,000.

    Mr. Visclosky. Because with an increase of $6 billion in 
cost, it sounds like a bank to me. I mean, really.
    Mr. Simpson. I am with you.
    Mr. Visclosky. With $6 billion more cost, we will give you 
a bonus.
    Mr. Aloise. Mr. Chairman, I can answer that. If you are 
talking about when we testified last time on the Hanford waste 
treatment plant, we addressed this, and the manager at the 
Office of River Protection at that time, who has since gone, 
from 2002 to 2004 got about $51,000 in bonuses. And this was 
the time period when we saw the large increases in the cost of 
the waste treatment plant.
    Mr. Visclosky. On contractor performance, my understanding 
is the Commerce Department maintains a list of nonperforming 
contractors. How does DOE institutionalize its knowledge of 
nonperforming contractors, and does it still apply for EM, 
Office of Science, what have you, or is it departmentwide so 
that at the outset here people have a red flag about individual 
firms or contractors?
    Ms. Kolb. It is departmentwide; however there is a 
governmentwide system that is used to provide information on 
poor performing contractors. Does the system work as well as it 
should? No, it doesn't. And that is one of the issues that we 
need to look at is how to better identify poor-performing 
contractors to ensure that--before we make decisions on hiring 
contractors, that we are aware of all the information about 
them.
    Mr. Visclosky. Who runs that for the government if it is 
governmentwide?
    Ms. Kolb. I believe it is HHS. I believe it is.
    Mr. Visclosky. What could the Department individually do, 
then, if it is governmentwide? Would you set up your own, or 
would you have an addendum or supplement to it?
    Ms. Kolb. I think setting up our own would be a good step 
forward.

                   NAPA RECOMMENDATION OF ALLOTMENTS

    Mr. Visclosky. Mr. Breul, DOE program assistant 
secretaries, I think to an extent we have touched on some of 
this, do not have the ultimate legal responsibility for 
controlling funds. Are there other Federal agencies that also 
follow that particular practice?
    Mr. Breul. Mr. Chairman, we have had both the panel and its 
experts, as well as the staff, scout around as thoroughly as we 
could. There is, with only one exception, no other Department 
or agency that we can think of or find where this is the 
pattern. The one exception is the National Science Foundation. 
It is a smaller research kind of organization, and it actually 
distributes money within the various research divisions and 
headquarters out to the CFO, people throughout the 
organization, and then the CFO further distributes it. But 
aside from NSF, we are not aware that any other organization 
has operated this way, and it seems rather anomalous to us. It 
violates the basic principles of associating responsibility and 
resources.
    Mr. Visclosky. And accountability.
    So one of your recommendations, if I am recalling, is that 
practice should be changed?
    Mr. Breul. Yes, sir.
    Mr. Visclosky. So that somebody is accountable and somebody 
is----
    Mr. Breul. And the accountable official, the one the--
Congress and the Secretary looks to for program delivery 
actually is--has the resources as well and is held accountable 
for both the results and the resources.
    Mr. Visclosky. Mr. Frelinghuysen.
    Mr. Frelinghuysen. When I visited Savannah, just on the 
issue of contractors, we had our oil and gas--somebody with oil 
and gas expertise involved in a facility. Was it the MOX 
facility?
    Mr. Aloise. The Salt Waste project.
    Mr. Frelinghuysen. The salt waste project.
    How did that come to pass?
    Mr. Aloise. I am not quite sure. The way we found out about 
this is we were looking at their cost-estimating procedures. We 
had our experts at the table, they had their experts at the 
table, and we are trying to get down to the basics of how are 
they developing their cost estimates at that plant.
    Mr. Frelinghuysen. I am not forgetting what Mr. Simpson 
said that, you know, these are obviously complex projects. It 
seemed to me as a layperson that if you had, you know, a small 
circle of people who have this sort of core competency, you 
probably wouldn't look towards a company that hadn't had 
previous experience with such a project.
    Mr. Aloise. Or at a minimum you would provide the guidance 
they need to do competent, credible cost estimating. That is 
not happening right now with DOE at that plant. So we have 
concerns about that. But we are just getting into that cost 
estimating review right now.
    Mr. Frelinghuysen. You are?
    Mr. Aloise. Yeah.

                        BENCHMARKING EM STAFFING

    Mr. Frelinghuysen. For Mr. Breul, and I know I say this on 
behalf of the Chairman, we want to thank you and the Academy 
for all the work you have done----
    Mr. Breul. I appreciate it.
    Mr. Frelinghuysen [continuing]. For, I guess, many years 
relative to DOE. As you noted in your testimony, and correct me 
if I am wrong, about 14,200 DOE civil servants rely on 
approximately 90,000 contractor employees to execute their 
programs. In the EM study, the Academy benchmarked workload 
planning across the NRC, Nuclear Regulatory Commission, the 
Naval Facilities Engineering Command and the Army Corps of 
Engineers. Can you provide us with some detail how the EM 
stacked up in the Federal oversight--in Federal oversight over 
contractors with these three agencies?
    Mr. Breul. I think I can give you a pretty close answer. 
The details of what we did are laid out in our report. The 
effort involved using a notional $25 million contract as a way 
of comparing among the organizations, and we looked at their 
workload-forecasting techniques and how they would produce 
staffing levels. And we found, after converting to EM project 
sizes, that there were anywhere from two to six times the 
number of EM staff needed to be on the ground at any one time 
to be equivalent to what those other organizations were putting 
in place for similar kinds of projects.
    The difficulty with your question, I think, is that you 
were talking about supervision of contractors, which is one 
element of what the EM staff would do. But we believe it is 
reasonable to assume that there is still a significant 
difference in the staffing level that EM was applying in a 
particular case to what these other organizations. And again, 
orders of magnitude of two to six times as many are a 
significant deficiency, and we thought that was a serious 
problem.
    Mr. Frelinghuysen. So run that by me again.
    Mr. Breul. In the same kind of situation, those other 
organizations, which were the Nuclear Regulatory Commission and 
NAVFAC, and the Army Corps, they would have produced staffing 
levels from two to six times the number that EM actually had on 
the ground at the same time.
    Mr. Frelinghuysen. So EM was under----
    Mr. Breul. Undermanned.
    Mr. Frelinghuysen. Undermanned, understaffed?
    Mr. Breul. Yes.

               NEED FOR AN UNDERSECRETARY FOR MANAGEMENT

    Mr. Frelinghuysen. And we have discussed this. Your 
prepared testimony proposed significant changes in the 
Department's management structure to provide greater--what you 
have called greater mission-oriented focus.
    Mr. Breul. Yes, sir.
    Mr. Frelinghuysen. I like the terminology. For the benefit 
of those on this committee who have not yet seen your 
preliminary findings, can you further discuss those proposals?
    Mr. Breul. We have a number of recommendations.
    Mr. Frelinghuysen. One was the whole issue of having an 
under secretary for----
    Mr. Breul. That is one organizational change. Then you 
would have a single official----
    Mr. Frelinghuysen. What level of receptivity has there 
been--
    Mr. Breul. We are not there yet with the final 
recommendation. It would entail another organizational 
position, and that might not suit the Department. We have 
another organizational possibility, which is a business counsel 
which would, in effect, allow the major players to work 
collaboratively and together in a formal organization to 
provide that coordination. We also have a recommendation for an 
operations management council to allow for input from the 
program organizations to the headquarters function so that 
there would actually be an ongoing conversation, an 
interaction. In other words, there are both organizational 
changes as well as operating changes that could achieve this 
end. But we would prefer the under secretary, but we understand 
the reorganizations are often a costly and sometimes 
distracting matter to an organization. There may be other ways 
to achieve the same end.

                              PROCUREMENTS

    Mr. Frelinghuysen. The work of the Academy has already 
resulted in some useful changes in DOE's operation; for 
instance, increasing--and we talked about this a few minutes 
ago--increasing the contractor approval level for EM from 5 
million to 50 million.
    Mr. Breul. Correct.
    Mr. Frelinghuysen. That is correct?
    Mr. Breul. Yes, sir.
    Mr. Frelinghuysen. The EM program, again, with resources of 
over $6 billion, had to seek approval from headquarters 
Procurement Office contracts for over 5 million; is that right?
    Mr. Breul. Well, it is a little more nuanced than that. The 
threshold required EM to actually submit the projected actions 
to headquarters, and from those the Procurement Office chose 
which they wanted to subject to this business review. So there 
is a bit of selectivity in there. But the threshold was down to 
$5 million, correct.
    Mr. Frelinghuysen. What was the result of that? Is there 
some sort of sense of paralysis, or what happened?
    Mr. Breul. We didn't see paralysis. It obviously was a 
delay and slowed things down, because in some cases there were 
sequential reviews with counsel and the Procurement Office and 
others jumping in. And, of course, there is the uncertainty. 
And frankly, there is a shift in responsibility and 
accountability. The EM and the field offices don't have the 
full sense that they are fully in charge and accountable if 
they are subject to a review and chop on it by someone else 
elsewhere. So there are a number of consequences of that.
    We asked at the same time when they looked at that $50 
million threshold to do a reengineering of the process and try 
to streamline it and simplify it. We have not completed a 
review of that yet. We are in the midst of that.
    Mr. Frelinghuysen. What would hold the Department back from 
doing something on their own?
    Mr. Breul. Well, they have. Our review to see how effective 
that is isn't complete, but a preliminary review and 
information is that it is only making a very modest set of 
changes, maybe some reductions in a few days in terms of the 
processing. We were looking for a reduction in terms of months, 
that the process would have been significantly speeded up. So 
we are not sure whether----
    Mr. Frelinghuysen. Is there a broker in the process?
    Mr. Breul. No, sir. That is one of the recommendations, in 
fact, for all of this, that there be somebody to kind of talk 
through these kind of changes. But to be fair, the Procurement 
Office is very serious and intent on this. We have had long and 
serious discussions with them about it. It is not clear yet 
that that change is going to bring about the significant 
improvement that we had hoped for.
    Mr. Frelinghuysen. Mr. Aloise, do you have any comment on 
that?
    Mr. Aloise. No, only to say that as I am listening, I could 
see the interrelation between our work here with contract 
management problems and----
    Mr. Breul. And significantly their $100 million threshold 
is again the level we were suggesting would be a convenient and 
a useful one to keep the smaller projects, which are 
historically much more successful, out of this churn and focus 
the Department's attention when it does a review on the larger 
ones. We had some other recommendations to not even do the 
reviews, to do system reviews and to strengthen the field 
support so it could do a better job in the first place, and to 
focus the review on a systematic review as opposed to a 
transactional review. Those are yet to come.
    Mr. Frelinghuysen. I may be mixing apples and oranges, but 
you have been working with the Department for a number of 
years, and we credit you for that. Have you looked over their 
recommendations?
    Mr. Aloise. Their recommendations? Yes.
    Mr. Frelinghuysen. Very closely?
    Mr. Aloise. Yes.
    Mr. Frelinghuysen. So they are somewhat woven into your----
    Mr. Aloise. I think they complement.
    Mr. Breul. I think, sir, we have had a good working 
relationship with GAO. It has been productive on both sides, I 
believe.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Simpson.
    Mr. Simpson. Let me suggest one other organizational 
management change that I have heard surprisingly, and I am not 
suggesting this, but some have suggested that maybe it is time 
for EM to go over to the Army Corps of Engineers. Something to 
look at.
    I want you to know, Ms. Kolb, I am very comforted by the 
fact that you are going to spend this $6 billion efficiently. 
When we are just talking about $6 billion, the fact is that the 
Department of Energy is getting $38\1/2\ billion that they are 
going to be dealing with. Their annual budget is $26 billion. 
This is more than their annual budget.
    Ms. Kolb. Yes.
    Mr. Simpson. You are currently putting together a spending 
plan.
    Ms. Kolb. Yes.
    Mr. Simpson. Man, I wish I had that problem.
    Ms. Kolb. It has its challenges, however.
    Mr. Simpson. When will that spending plan be available, and 
will this committee or this staff of this committee have any 
input into that spending plan?
    Ms. Kolb. The spending plan will be available very soon. I 
can't say exactly when. And on your question about whether or 
not the committee would have input, I would need to get back to 
you on that.
    [The information follows:]

                        Recovery Act Spend Plan

    EM can meet with the Committee to discuss the $6 billion in 
additional funding received as a result of the Recovery Act. In order 
to meet the objectives of the Recovery Act, EM has selected projects 
from its existing portfolio that are ``shovel ready,'' will create jobs 
quickly, are compatible with existing projects at the cleanup sites and 
utilize existing contracts, with proven technologies that have an 
established regulatory framework already in place.

    Mr. Simpson. I would suggest there is some expertise, maybe 
not as much among the Members, but among the staff here that 
have been dealing with the Department of Energy for quite some 
time, and I would recommend that you take advantage of their 
expertise in this area, and it might ease the hearings that 
come in the future. I don't know of another way to say that.
    We talked about loan guarantees for renewables. The 
Department has about 2 billion available for loan guarantees in 
nuclear energy. If there are competing interests for that loan 
guarantee, how is the Department going to award those loan 
guarantees?
    Ms. Kolb. I can't answer that question, sir. I will get 
that information for you.
    [The information follows:]

                   Loan Guarantees for Nuclear Energy

    In 2008, the Department issued two loan guarantee solicitations for 
nuclear energy technologies, including up to $18.5 billion for nuclear 
power facilities and up to $2 billion for nuclear facilities for the 
``front-end'' of the nuclear fuel cycle. During the application review 
process and subsequent due diligence process, DOE staff perform 
detailed financial, legal and technical analysis to determine which 
project or projects best accomplish the objectives of the Title XVII 
legislation while protecting the interests of the American taxpayer.

    Mr. Simpson. I would hope it would be on the merit of the 
recommended projects.
    Ms. Kolb. Absolutely.
    Mr. Simpson. That is good. I would hold you to that. That 
is what I would hope for anyway, and politics kind of stays out 
of the picture.
    Ms. Kolb. Absolutely, sir.
    Mr. Simpson. Of the 59 recommendations that DOE generally 
agrees with that have been made by GAO, if we held a hearing in 
6 months, 57 of them are still open. Field hearing in 6 months, 
how many would still be open then; and in a year, how many 
would still be open? What can I look forward to at the next 
hearing so I can measure the performance of the Department is 
what I am saying?
    Ms. Kolb. What I would recommend that you hold us 
accountable for is implementation of our corrective action plan 
and the performance metrics that are included in it. The 
corrective action plan includes many of the issues that Mr. 
Aloise has touched upon, for example, the technology readiness 
review, the fact that we need to perform those; some of the 
issues that Jonathan Breul talked about, the staffing issues. 
One of the items in our plan is to develop a staffing model 
based on the model that is used by the Naval Facilities Command 
as well as by the Army Corps of Engineers to ensure that we 
have appropriate staffing. Those are the kind of issues that I 
think you ought to be holding us accountable for.
    And just one of the things, not to take us down a side 
path, but on the issue of staffing, if you look at the Office 
of Science, and you talk with the project management leaders in 
that organization, they will tell you you don't need a lot of 
people; what you need are a few good people who know what they 
are doing.
    Mr. Simpson. How difficult is that to find in today's 
environment, a few good people?
    Ms. Kolb. Very, hard. Very hard. Because a lot of the items 
that are in our corrective action plan, they are really just 
good management. Doing upfront designs and completing designs 
to a point where you can start with construction with 
confidence, that you are not going to have to completely change 
the design, those are just good management techniques.
    So these are the kinds of things that I think you ought to 
be holding us accountable for. I know that the committee staff 
has a copy of our corrective action plan. We will make sure we 
have copies of it for all of you so that you can see the kind 
of things we are implementing and the timetable we are using.
    Mr. Simpson. We have been concerned as a committee for 
quite some time that we are losing our expertise, in particular 
the nuclear area, because we haven't built a reactor for how 
many ever years, all that kind of stuff. High school kids 
aren't going into nuclear engineering, et cetera, et cetera, et 
cetera, that we are going to lose that core capability. Is that 
affecting your ability to hire people to oversee these 
programs?
    Ms. Kolb. That is definitely a challenge, definitely a 
challenge.
    Mr. Simpson. Let me say I know we sounded critical and, you 
know, that is our job to be critical, quite frankly, but I 
appreciate the work that the Department does. I know it is a 
tough job, and you are dealing, as I said earlier in the very 
first comments, sometimes in areas that we have never dealt 
with before. And I know there are good people trying to do a 
good job, and I hope that the oversight hearings--and I am sure 
this Chairman and our former Chairman will continue--are used 
by the Department not as a view that we are trying to beat the 
crap out of you, but that we want to help you be successful. So 
I appreciate you all being here today, and I appreciate the 
work that all of you have done on this.
    Mr. Visclosky. I have a couple more questions, but I just 
would follow up on Mr. Simpson's last point. When I did meet 
with the Secretary, I told him I am an appropriator, and I 
deeply care about policy, but on some level the overarching 
energy policy of this country is going to be felt by somebody 
else. But I did suggest that if the management problems--if the 
Secretary doesn't get control of the Department and make it run 
as efficiently as possible, you could have the best policy in 
the world, and we will not succeed. And we want to succeed. We 
have got a problem we have got to solve here, and over and 
above energy we have got problems to solve.

                              MOX FACILITY

    Mr. Hobson has retired, but MOX goes on. Mr. Aloise, MOX in 
many ways is unique, but there are other MOX facilities 
worldwide; am I correct?
    Mr. Aloise. Uh-huh.
    Mr. Visclosky. What have you found regarding the management 
of the MOX facility and its construction?
    Mr. Aloise. Well, as I mentioned earlier, our initial work 
has found that the underlying basis of their EVM data, the 
schedule is not reliable, in our view, and they need to--DOE 
needs to fix that as soon as possible, because here we are 
starting again where we have identified problems, you know, 
somewhat early on that could lead to cost overruns and budget 
increases and schedule delays in the future. So we are working 
with DOE to fix that schedule.
    Mr. Visclosky. And I think the word ``chunks'' was 
mentioned earlier during the hearing, and in many ways MOX is a 
chunk project because there is really not a facility, there are 
three major facilities. The estimate for the fuel fabrication 
plant is 4.8 billion, if I understand that. Do you know what 
the estimates are for the other two facilities for waste 
solidification and pit disassembly?
    Mr. Aloise. Waste solidification, I believe, is $340 
million, and pit disassembly is over $3 billion.
    Mr. Visclosky. And on the waste solidification facility and 
this is a gross oversimplification, would be the back end, you 
know, in a fashion of speaking. Construction is anticipated to 
start this year, as I understand it. Are there any outstanding 
issues with the design?
    Mr. Aloise. I believe it started in December 2008 on the 
waste--
    Mr. Visclosky. It has started? Okay. Okay.
    Mr. Aloise. We are looking at that overall strategy. But 
there is a question whether the pit disassembly facility will 
actually be built at Savannah River is still under review. So 
until they have the requirements, we are looking at how does 
DOE know how to size that building, because if the pit 
disassembly facility is not built there, then they are going to 
have different requirements. So that is something we need to 
look at.
    Mr. Visclosky. But they have started construction?
    Mr. Aloise. Yeah.
    Mr. Visclosky. Despite the fact there is not a final 
determination on pit disassembly?
    Mr. Aloise. That is correct.
    Mr. Visclosky. Ms. Kolb or any--do you know when a decision 
is going to be made, so we don't do too much construction?
    Ms. Kolb. I will have to get back to you on that, sir.
    [The information follows:]

                Pit Disassembly and Conversion Facility

    Over 25 metric tons of the surplus weapon-grade plutonium that will 
be processed at the MOX facility is in the form of nuclear weapon pits. 
Before the plutonium can be processed at the MOX facility, the pits 
must be disassembled and the plutonium metal must be converted to an 
oxide. In a January 2000 record of decision, the Department decided to 
construct the Pit Disassembly and Conversion Facility (PDCF) in which 
to disassemble the pits and convert the plutonium into an oxide at the 
Savannah River Site (SRS). However, DOE/NNSA is currently evaluating 
whether any efficiencies would result from combining the planned PDCF 
with other plutonium-related projects under construction by the 
Environmental Management (EM) office to be located within the K Area 
Material Storage facility at SRS. DOE/EM and the NNSA expect to 
complete detailed analyses of combining these projects and provide a 
preferred option by summer 2009. Related to the provision of feedstock 
for the MOX facility is the fact that some portion of the feedstock 
will need to come from the Advanced Recovery and Integrated Extraction 
System (ARIES) line at Los Alamos National Laboratory due to the gap in 
time between when the MOX facility is scheduled to become operational 
and when the PDCF project comes online in South Carolina.

    Mr. Aloise. It is an integrated strategy.
    Mr. Visclosky. Is it premature to start construction of the 
waste solidification until you know exactly what you are going 
to do with step one?
    Mr. Aloise. Let me say intuitively you would say yes. I 
will give DOE the benefit of the doubt until we look at their 
strategy and see what exactly it is they are doing, because 
that other--it is a very large facility at the pit disassembly. 
It is a key thing. Waste is going to go into the Waste 
Solidification Building from there and from the MOX facility, 
so they have to know how to size it correctly.
    Mr. Visclosky. If there is a need to take waste from the 
fuel fabrication plant, because it will be done in the near 
future, as I understand; not near future like in a couple of 
months, but----
    Mr. Aloise. Twenty-six----
    Mr. Visclosky [continuing]. But sooner than the waste 
solidification facility. Can the waste be accommodated 
elsewhere on the site?
    Mr. Aloise. We will have to take a look at that. It is 
possible, I suppose. There is a possibility for some waste to 
be on the site. But we will have to take a look at that when we 
look at the total strategy.
    Mr. Visclosky. You mentioned your intuition. What is your 
take on the systems planning for these three facilities in the 
order of their construction and the fact that you are doing 
waste before you have a final determination on it?
    Mr. Aloise. We looked at it, and our reaction was--well, we 
were actually mandated to look at it, But had we not been 
mandated to look at it, it raised enough questions in our mind 
based on our experience with all of the work that we have laid 
out here that we need to take a look at that strategy and see 
if that makes sense. As you know, Mr. Chairman, once you break 
ground for these projects, it is hard to stop the money.
    Mr. Visclosky. It is over. Although there are 31 projects 
you have mentioned that have----
    Mr. Aloise. Before completion at the cost of $10 billion. 
That is what we are hoping to avoid.
    Mr. Visclosky. Right, right.

                              MOX FACILITY

    Still talking about MOX, you have an EM program, but you 
have NNSA involved here. How are the two working together?
    Mr. Aloise. Well, again, we will be taking a look at the 
strategy of--one of the interesting things to us when we take a 
look at this is that you have different regulators. You have 
three facilities, but you have NRC regulating the MOX facility. 
The DOE will be regulating the two other facilities. So we need 
to look at that to see what kind of overlaps or duplications, 
or is something falling through the cracks there. Is one 
facility going to be regulated to a higher level than other 
facilities given that they are different facilities? But that 
makes that unique.
    Mr. Frelinghuysen. You are asking those questions?
    Mr. Aloise. Yes.
    Mr. Frelinghuysen. But what sort of responses----
    Mr. Aloise. We will be asking those questions.
    Mr. Frelinghuysen. Those are questions that are out there. 
But what about the Department? What is your take?
    Ms. Kolb. Well, first of all, on the MOX project, we do 
believe the project is on cost and on schedule, and we are 
aware of GAO's concerns about the EVMS data. We feel that the 
EVMS data is sound and reliable, and we are in ongoing 
discussions with GAO on the changes that they believe that we 
need to make in order to verify that they--the information is 
reliable.
    We are looking at the issue of the disassembly plant. I am 
not prepared to date to discuss that in any great detail, but 
we will provide information back to the committee on----
    Mr. Frelinghuysen. The sequencing issue is pretty damn 
important.
    Ms. Kolb. It is, sir.
    Mr. Frelinghuysen. Even with my tour, I am not sure I fully 
understand it. But as a layperson, it seems to me there seems 
to be some confusion down there as to how they are going to 
proceed. Mr. Breul, specific choke points that relate to 
headquarters that might contribute delays in EM cleanup 
programs, can you talk about that issue?
    Mr. Breul. Well, certainly the business process review on 
contracts qualifies. We would really like to see that move 
along more quickly and are still of the mind that a $100 
million threshold would be an important move to do that; also 
changing the way procurement operates to help strengthen the 
capability in the EM operations to prepare good statements of 
work and sound procurements, to shift towards more of a systems 
review.
    Mr. Frelinghuysen. How about the Office of General Counsel, 
is that one of those?
    Mr. Breul. They are part of that business process review. 
They have been the subject of some complaints that we have been 
hearing. We have not looked at them directly because that 
wasn't part of our charge.
    Mr. Frelinghuysen. You have heard those?
    Mr. Breul. We have heard those.
    Mr. Frelinghuysen. Has GAO heard some of that?
    Mr. Aloise. We have heard that, yes, as well.
    Mr. Frelinghuysen. But you haven't substantiated it?
    Mr. Aloise. No.
    Thank you, Mr. Chairman.
    Mr. Wamp. I want to thank the Chairman and apologize to the 
witnesses. I have a bill that I had to speak on the floor about 
from the time we voted until now, and I will try not to extend 
this, but I wanted to get back as quick as I could. First I 
thank the Chairman for this focus because I think it is 
incredibly important.
    Mr. Frelinghuysen and I have been here together, this is 
our 15th year on the Appropriations Committee, for a long 
period of time. I was thinking as you all came today, and I 
heard you comment on Secretary Chu's commitment to procurement 
and efficient management and kind of a new shift in paradigm 
and his experience coming from a lab, about the half a dozen 
secretaries that I have seen in 2 administrations come and go, 
and then a couple of acting secretaries and so many other 
witnesses, and frankly how this is a bipartisan, shared problem 
that neither party has much to brag about. Even though the 
Department of Energy has done a lot of things right, I don't 
want to focus on the negative any more than a hearing like this 
is designed to focus on the negative.
    And I wanted to kind of direct my line of questioning at 
Ms. Kolb, because, for instance, Spallation Neutron Source, 
when you mentioned earlier that certain projects that DOE has 
actually carried out, and I want to be parochial, it happens to 
be in Oak Ridge, but it was a multilab consortium. Basically 
every lab that had a dog in the hunt or a piece of the action 
to offer was a partner. It happened to be sited in one 
location, but literally every lab in that arena contributed 
mightily to it, and it was done on time and on budget, and it 
was a $1.4 billion project. And that almost defied logic across 
the country that we could keep a 7-year construction project at 
DOE.
    So the first thing I would throw out there is what kind of 
lessons do you learn from one that goes like that? There are 
not many $1.4 billion projects that the Federal Government has 
carried out by any of the agencies that is on time and on 
budget. It certainly doesn't happen on anything in this city. 
It has to be out there somewhere. And you have to scrub it 
down.
    I can remember Chairman Sensenbrenner driving us crazy as 
the Chairman of the Science Committee basically trying to hold 
the whole process accountable, exerting some oversight, and 
there is not enough oversight. Congress is guilty--that is why 
this hearing is so important. It may seem monotonous, but I 
want to point that out as I get more into the weapons piece, 
because that is one concern I have about the new 
administration.
    There are a host of things that happen at the Forrestal 
Building that I could complain about over the last 15 years. I 
represent Oak Ridge. It is a multipurpose site, for anyone here 
that doesn't know. So I get all of the missions basically, the 
weapons piece, the science piece, the EM piece, all the 
efficiencies and inefficiencies, and see the big picture of the 
reforms that are necessary. But the Forrestal Building is 
basically the source of most of the problems. I hate to say 
that. I mean, your field people do a really good job, and the 
more you can get the decisionmaking out into the field, the 
better off we are going to be.
    Talking about a bureaucracy, that is the problem with DOE, 
from my 15 years, as Mr. Frelinghuysen says, layman 
perspective, is that everything that goes wrong happens up 
here. It doesn't necessarily happen in the field, but the 
decisions are here. But I am most worried about weapons right 
now because of the new paradigm of this administration. And I 
want to know what are the efficient projects in the weapons 
system, and what are the inefficient projects, because I think 
some of the very important investments that are on the horizon 
are jeopardized by the inefficiencies of others. We saw it in 
our initial hearing on the Corps of Engineers last week on the 
water side of this subcommittee where a couple of projects that 
have gone amok really threaten the ones that are on time and on 
budget because all the money goes there.
    We talked about Hanford earlier in this hearing before I 
left. Hanford is like Pacman; it is gobbling up all the rest of 
the players on the board. We know. And look at the board over 
there, and you see that Hanford is the one with the delays 
longer than I will be alive.
    So what about weapons? Because that is to me the most 
threatened aspect of DOE's portfolio until certain changes are 
made. I know there is some talk of DOD instead of DOE. But at 
present, on these major investments, what is out of bounds, or 
what is out of control, and which ones are in good shape?
    Ms. Kolb. Sir, on weapons systems, I cannot address those. 
Those are not covered by 413, the order that my office is 
responsible for administering. So what I can do is go back to 
the Department and have officials from NNSA provide you with 
that information.
    Mr. Wamp. Okay.
    [The information follows:]

                       Nuclear Complex Efficiency

    There is no comparable industry to gauge the efficiency of the 
Nuclear Security Enterprise. Thus it is difficult to define precisely 
what efficiency means in this context. However, we agree that cost and 
efficiency challenges exist, in many cases driven by the highly 
technical nature of the endeavors, the ``first of a kind'' equipment 
and facilities in which this work is performed, and the unique and 
highly stringent security environment.
    One measure of efficiency could be programs and projects that have 
executed successfully ahead of schedule. The Facilities and 
Infrastructure Recapitalization Program met it goal to eliminate 
3,000,000 gross square feet of excess facilities one year early, in 
2008. We have also completed some construction projects ahead of 
schedule and under budget, including the Microsystems and Engineering 
Sciences Applications facility at Sandia National Laboratories.
    Because of the complexity of many of our construction projects, 
there are also examples of inefficient project execution, and as such 
we have undertaken a major effort to improve our project management 
practices in view of this reality.

    Ms. Kolb. I apologize.
    Mr. Wamp. No problem.
    That is all I have, Mr. Chairman.
    Mr. Simpson. I have said too much.
    Mr. Visclosky. I ask that comment be stricken from the 
record.
    I would just follow up because my thought, if you would, is 
a difference in perception, and that is, Ms. Kolb, you have 
indicated as far as MOX--and I am talking about MOX now--that 
the Department feels they are on schedule.
    With the report we have from the GAO when--and I am just 
looking at one of a number of items on a number of pages--
assigning resources to key activity are--is the agency, GAO, 
satisfied, and the statement is partially. The schedule 
reflects $25.9 million in resource costs out of a total project 
cost of 4.8 billion. As a result, the schedule does not reflect 
the vast majority of resources needed to perform construction 
activities. And I, for one, am happy that we have engaged these 
agencies with DOE early in the process so that to the extent we 
have an honest disagreement here, we can get to the root of it 
and make sure that schedule is as sound as possible.
    Ms. Kolb. Yes. Absolutely. We are working with GAO on the 
ground, and there have been numerous discussions about the 
schedule and what needs to be done to make sure that GAO is 
satisfied that this is a valid schedule. There is a risk 
management assessment that needs to be conducted. We have 
committed to conducting that review this summer, and I know 
that is one of the sources of concern for GAO. So we will 
follow up. We need to do that.
    Mr. Frelinghuysen. I do have one additional question. You 
said, Ms. Kolb, that you are working on fixing--the hiring 
process needs to be fixed and will be fixed in 30 days.
    Ms. Kolb. I said that we will have an action plan----
    Mr. Frelinghuysen. Action plan ready for----
    Ms. Kolb. Yes. It is due March 16th.
    Mr. Frelinghuysen. Yeah. And when people are hired at the 
Department of Energy, do you use a contractor to hire them, or 
do you have personnel to do the interviews?
    Ms. Kolb. Federal personnel conduct interviews. We 
primarily use--I am talking about headquarters. We primarily 
use Federal employees. We do use----
    Mr. Frelinghuysen. It is interesting, because with all the 
song and dance about contractors, and obviously you have--the 
Department has a lot of contractors, contract employees, it is 
amazing that the Department of Defense uses outside contractors 
in any case to hire up civilian--qualified civilian personnel. 
I just wonder whether you use a similar system.
    Ms. Kolb. We do not use a similar system. We do have a few 
individuals who are contractors who will perform tasks, like 
classifying position descriptions. But we do not employ a 
company, for example, to conduct our hiring.
    Mr. Frelinghuysen. Okay. But it is true that there--I would 
assume a relatively small pool of people?
    Ms. Kolb. It is.
    Mr. Frelinghuysen. But you are going to have to gear up, as 
the Washington Post--you know, many hires needed for budget 
goals. You are going to need to set up a pretty sophisticated 
system here.
    Ms. Kolb. Yes. We are going to need to hire quite a few 
individuals, and our strategy there--first of all, this is 
something else that I am working on in my spare time--is we 
have identified individuals that need to be brought on 
immediately, and we have triaged those positions. We have 
identified those that are fairly common positions; for example, 
budget analysts, program analysts, where not a lot of work 
needs to be done up front in order to recruit. So we have 
standard packages. We are using everything as a standard 
process, standard packages, standard vacancy announcements, so 
that we can then start to recruit people very quickly. We have 
already posted a number of jobs, and you are going to see even 
more postings over the next several days and weeks.
    Mr. Frelinghuysen. You are going to be hiring basically a 
lot of people who are going to be grants managers, as opposed 
to the wake-up call is when you take over the leadership of the 
Department and find out that the focus is--90 percent of it is 
for nuclear stockpile, and then you find--now we are having 
green energy and renewables. You are going to have to set up a 
pretty vigorous system here.

                        HIRING DONE IN THE FIELD

    Ms. Kolb. Yes. And a lot of the hiring is being done in the 
field.
    Mr. Frelinghuysen. What does that mean?
    Ms. Kolb. It means there are different hiring organizations 
that are processing the vacancy announcements. For example, 
Golden, Colorado, EERE, that is where they are doing a lot of 
hiring, and they have a more efficient organization at Golden, 
Colorado, to do hiring. Headquarters--I think when Mr. Breul 
was talking----
    Mr. Frelinghuysen. Mr. Breul has been in here. Do you want 
to put your oar in the water here?
    Mr. Breul. I think that is exactly right. There are 
processing centers in Golden, Colorado and in Cincinnati.
    Mr. Frelinghuysen. What is your knowledge of the existing 
centers?
    Mr. Breul. They are performing well. They have capacity, 
and they are willing to take on more work to see that it gets 
done.
    Ms. Kolb. And they will get that additional work. I think 
where Mr. Breul was saying that there were concerns is at 
headquarters hiring.
    Mr. Frelinghuysen. That is a whole other bag of worms.
    Ms. Kolb. Yes, it is.
    Mr. Frelinghuysen. All right. Thank you, Mr. Chairman.
    Mr. Wamp. Sorry. The GAO didn't volunteer to answer my 
question, so I am just going to have to ask you if you can 
comment on the question about weapons.
    But I want to say first, I don't know, if we think DOE has 
problems now, what is going to happen when you are trying to 
administer the stimulus and weatherization in some of these 
programs that is just like--how in the world do you ramp up by 
a factor of 31 times what we normally spend on weatherization? 
We are all for it, but, I mean, that is like asking the 
impossible, and we did it. So we have asked it. So I am sure 
you are going to be drug back in here and asked why you didn't 
do that in an efficient way, but the Congress is actually 
giving you a task that I don't know that it is humanly possible 
when you ramp up a program 31 times when you formally spend on 
it.
    Back to weapons. Can you answer my question, please?
    Mr. Aloise. Let me just say this: One of the major concerns 
we have is the transformation of the weapons complex and will 
DOE have the things in place that we need, they need, to do 
that effectively, which is, you know, committed leadership, the 
right people involved? And so we are looking at that. That is 
going to be tens of billions of dollars to reduce the footprint 
and make the right decisions on which facilities to build and 
which facilities not to build. We are already looking at the 
facilities in Los Alamos they are talking about building. They 
are talking about the UPF facility at Y-12. So we are looking 
at that.
    I also wanted to comment on your statement about people in 
the field know what they are doing, and headquarters. We 
basically have found that in our work. I mean, when we need 
answers to the questions we are asking, we have to go to the 
field, and we have to drill down to the site offices or--
because we can't get those answers in headquarters. Now, I 
realize they may not know all the detail, but they should know 
the basics of what is going on, and a lot of times that is 
lacking here at headquarters. So I agree with you on that 
point.
    And yesterday we issued a report on the Life Extension 
Program, and we found the same kinds of problems in that 
program, and we made recommendations for improvement in that 
program at NNSA. We found, you know, some inadequate 
information being exchanged between the players. We found 
baseline changes that were incorrect. We found poor 
communication. So we found the same kind of things on the Life 
Extension Program. I don't know if that answers your question.
    Mr. Wamp. Mr. Chairman, I was on the Homeland Security 
Appropriations Subcommittee a few years ago, and Chairman 
Rogers at that time couldn't get the DHS leadership in their 
headquarters to cooperate. So he just held back all their 
administrative funds until which time he got the answers. That 
might be one way to get the Forrestal Building to clean up 
their bureaucracy real fast so that people in the field can do 
their job, and we can become more efficient.
    Not to make that as a recommendation, but just tell you 
that that actually worked when we created DHS, although other 
things didn't work too well at DHS. But you can't tell me where 
the cannibals are in the weapons complex and where the--like 
the Hanford of EM--the problems that might cause the rest of 
the complex to feel a squeeze on some of these investments 
based on Mr. D'Agostino's stated commitments to some of these 
things on transformation. You can't just snap your fingers and 
have it all go away even if you are against--I mean, 
nonproliferation rightfully takes center stage here, but even 
if you are against transformation or these investments, you 
can't just make this stuff disappear.
    We have this incredibly important deterrent, and the 
stewardship of this stockpile and the maintenance of this 
legacy asset here is real critical. And the States all have a 
dog in this hunt because you can't start moving stuff around. 
They really carefully protect it, the States do. And that is 
another one of these push-pulls with the Federal Government 
making these investments in these areas. But are there any 
noticeable cannibals in the weapons complex?
    Mr. Aloise. Our work so far as been limited to looking at 
some of the main projects they are talking about building for 
the weapons transformation, and we have raised questions about 
some of the estimates that have ranged from $2- to $3 billion. 
So we are only looking at certain projects at certain 
locations. That is all I can respond to on that.
    Mr. Wamp. We will follow up when we have the hearings, 
because I know our hearings our going to be limited because we 
have got to move a bill. We are late in the year. But I do 
think this is one of the big questions here as Secretary Chu 
comes over is what happens to the NNSA piece, and what are 
DOE's big plans here, because that is the most noticeable 
adaptation in 2010 budget request. And, Mr. Chairman, I 
appreciate your leadership.
    Mr. Frelinghuysen, I yield back.
    Mr. Visclosky. If there is no other questions, gentlemen, I 
would again thank you and your colleagues for all of your work 
and for your appearance; and, Ms. Kolb, yourself, as far as 
your service with the government and for your attendance and 
work to be prepared today. And I think the message is clear, so 
I don't have to belabor the point, but I just truly believe 
this is an incredible opportunity, as you have mentioned at 
least on one occasion, to put the best foot forward and to 
prove in tangible, measurable, visual form that things are 
fundamentally changing, not that there is an action plan, not 
that we are thinking about it, that something has changed. So I 
certainly would ask that you take that back. But also, again, 
thank you for being here today, and we are adjourned.
                                           Tuesday, March 17, 2009.

                        NUCLEAR WEAPONS COMPLEX

                               WITNESSES

THOMAS D'AGOSTINO, ADMINISTRATOR, NATIONAL NUCLEAR SECURITY 
    ADMINISTRATION
A.G. EGGENBERGER, CHAIRMAN, DEFENSE NUCLEAR FACILITIES SAFETY BOARD
PHILIP COYLE, FORMER ASSOCIATE DIRECTOR, LAWRENCE LIVERMORE LABORATORY
EVERET BECKNER, FORMER DEPUTY ADMINISTRATOR, DEFENSE PROGRAMS, NATIONAL 
    NUCLEAR SECURITY ADMINISTRATION
RICHARD GARWIN, IBM LABS, FORMER CHAIRMAN, STATE DEPARTMENT ARMS 
    CONTROL AND NONPROLIFERATION ADVISORY BOARD
  DNM
    Mr. Visclosky. Good afternoon. Today we are going to 
examine how best to maximize the efficiency and minimize the 
cost of the nuclear weapons complex. We have a panel of 
distinguished witnesses representing a wide spectrum of views. 
First of all, Tom D'Agostino is Administrator of the National 
Nuclear Security Administration. Mr. D'Agostino's prior 
positions include Deputy Administrator for Defense Programs at 
NNSA. He was a captain in the Naval Reserve and served for 8 
years as a submarine officer.
    And, Tom, I just would say that I have dealt with a number 
of Administrators at NNSA, and all have served very ably and 
have been very competent people. You are the best. I appreciate 
all of your service.
    Mr. D'Agostino. Thank you.
    Mr. Visclosky. Our next witness is Everet Beckner. Dr. 
Beckner has served as Deputy Administrator for Defense Programs 
of NNSA and is vice president and deputy managing director of 
the United Kingdom's Atomic Weapons Establishment.
    Richard Garwin has an extensive background with IBM Labs, 
the Council on Foreign Relations, although today he will be 
here to present his personal views. Dr. Garwin is a nuclear 
physicist who has published numerous books and articles on 
scientific and national security subjects.
    Philip Coyle is a laboratory associate director emeritus of 
the University of California, although, like Dr. Garwin, today 
he will present his personal views. He has served as Director 
of Operational Test and Evaluation in the Department of Defense 
and as Principal Deputy Assistant Secretary for Defense 
Programs in the Department of Energy.
    Our final witness is A.J. Eggenberger, Chairman of the 
Defense Nuclear Facilities Safety Board. Dr. Eggenberger is an 
expert in nuclear safety and earthquake engineering, and 
previously served as program director and leader of the 
Earthquake Hazard Mitigation Program at the National Science 
Foundation. Dr. Eggenberger will discuss the Board's view of 
safety issues within the complex.
    Each year the American taxpayers are asked to pay in excess 
of $6 billion for the nuclear weapons complex. This does not 
include the expenses of the Navy and the Air Force to operate, 
transport and store the active weapons. How much of this 
funding is essential? Stockpile Stewardship now gives us 
without nuclear testing a better understanding of the nuclear 
warhead phenomenon than we ever got from testing--nuclear 
testing.
    Spending to keep our nuclear weapons safe and secure is 
also essential; nevertheless we need to continually reevaluate 
our costs. Our consideration of this question today is 
circumscribed by the fact that the administration is in 
transition. We can say with confidence that President Obama's 
stockpile plan will be different from that which we see today.
    Additionally it appears probable that technical changes as 
well as international arms control agreement will be among the 
factors that drive this evolution. Therefore, we are not here 
today to hear advocacy for or against a given weapon or 
stockpile. Instead we ask the witness for his thoughts on how 
to improve the cost-effectiveness of the complex, at whatever 
stockpile numbers and qualitative compositions he finds worthy 
of consideration.
    The relationship between the size of the stockpile and the 
complex needs further study. On the one hand the one school of 
thought holds that the cost of the complex is fixed. Another 
school of thought holds that the cost of the complex is highly 
variable. In most cases the answer to a question like this lies 
at a point in between, a question we would ask today.
    Additionally there are qualitative factors, including pit 
reuse and other technologies that could reduce costs. We look 
forward to the witnesses' views on these and related issues.
    [The information follows:]

          

    Mr. Visclosky. With that, I would now yield to our Ranking 
Member Mr. Frelinghuysen for his opening comments.
    Mr. Frelinghuysen. I thank you, Mr. Chairman.
    I would like to welcome Administrator D'Agostino and other 
distinguished witnesses. Thank you for being here today.
    The issue before us, the nuclear weapons complex, it is 
usually complicated, and I can only hope that we will have an 
opportunity to examine its many components.
    We are all aware of the overall mission of the Department 
of Energy to advance our national economic and energy security. 
Today climate change, renewable energy, and green technologies 
and jobs are hot topics at the forefront of our national 
discussion and rightly so, but we should not let these issues 
overshadow the DOE's nuclear weapons mission and 
responsibility. This is the core mandate of the Department. We 
must ensure that our nuclear stockpile remains safe, reliable, 
secure and reliable, and, yes, smaller.
    This year the subcommittee will take into account the 
Congressional Commission on the Strategic Nuclear Posture, of 
the United States; the new administration's Nuclear Posture 
Review; and other information in order to assess our options 
and understand the risks and trade-offs associated with 
different approaches. Any policy decisions will be sure to spur 
a national conversation on our nuclear posture, and that is 
important to our country.
    The Administrator, who I greatly respect, signed a Record 
of Decision last December that laid out some very significant 
decisions regarding the future of the complex. I am looking 
forward to hearing the status of these decisions under the new 
administration. But decisions we make over the next few years 
may well reverberate for decades. We must be planning for our 
national security, that which protects us over a longer time 
horizon.
    We must have a complex, while smaller, that is responsive 
to today's threats and adaptable to meet tomorrow's. A complex 
which meets only one of these two objectives, that is today's 
threats instead of tomorrow's, cannot, in my mind, responsibly 
protect our national security and the American people.
    With that said, we can't wait forever. Our stockpile is not 
getting any younger, and neither is the workforce dedicated to 
our national security that manages it. Today's DOE scientists 
are some of the best and brightest in the world. We must 
continue our support for these talented men and women, while 
ensuring that a younger generation is willing to follow them.
    We have a broad panel today, and each of you bring a 
different perspective to the nuclear complex. I am coming into 
this hearing with an open mind and ready to learn.
    Thank you, Mr. Chairman, for holding this hearing, and I 
would like to thank all the panelists for their service they 
have made and are making to our country, and I am looking 
forward to hearing their testimony. Thank you very much.
    Mr. Visclosky. Thank you.
    Gentlemen, if we could proceed in order of introduction, 
and all of your statements will be entered in their entirety 
into the record. Thank you.
    Mr. D'Agostino. Chairman Visclosky, Ranking Member 
Frelinghuysen, members of the subcommittee, thank you for the 
opportunity to discuss today U.S. nuclear weapons policies and 
programs. I am pleased to appear before you today to address 
our vision for a smaller, safer, more secure and less expensive 
enterprise that leverages our scientific capabilities of our 
workforce to meet our national security needs. I appreciate the 
interest by the subcommittee in efforts to transform, and I am 
pleased to be before you today, particularly before this 
distinguished group of witnesses.
    By way of background, I have served as the Director of the 
Program Integration Office in Defense Programs as the Deputy 
Administrator for Defense Programs, and for the last few years 
as the Administrator for the National Nuclear Security 
Administration. Based on my background, I feel that I am 
qualified, and potentially uniquely to do so, to fully grasp 
and carry out what needs to be done to ensure that we bring the 
required number of facilities and capabilities in line with our 
reduced stockpile and as well as with our increasing, in my 
view--our increasing national security needs. However, in order 
to be successful, we need your support Mr. Chairman and members 
of the subcommittee.
    The vision of a smaller, safer, but modern nuclear security 
enterprise is well thought out and is first and foremost based 
on our Nation's nuclear security needs and requirements. 
Secondly, it is based on our need to retain the human capital 
that is unique and world-class in performing their mission. And 
finally, there is an urgent need to act now to sustain key 
capabilities necessary to maintain essential national nuclear 
security requirements not just now, but well into the future.
    As you know, we have made tremendous progress over the past 
few years in reducing the size of our nuclear weapons 
stockpile. U.S. Stockpile will be less than one-quarter of what 
it was at the end of the Cold War, the smallest stockpile in 50 
years. The size of the U.S. Stockpile sends the right message 
to the rest of the world that the United States continues to 
lead in its commitment on the article 6 of the Nuclear 
Nonproliferation Treaty and will, I believe, help create 
positive momentum heading into the 2010 Nonproliferation Treaty 
review conference.
    I look forward to the final results of the upcoming and 
ongoing nuclear strategy reviews, the bipartisan Congressional 
Commission on the U.S. Nuclear Posture, as well as the larger 
administration's Nuclear Posture Review, knowing they will help 
inform Congress and the administration on a path forward that 
clearly defines our future direction.
    The work of the Commission will likely have a large impact 
on the subsequent Nuclear Posture Review that will provide an 
important opportunity to establish consensus between the 
administration and Congress on U.S. nuclear security policy and 
then the programs that support that policy.
    Over the past 3 years, we have been aggressive in our 
efforts to analyze, describe, perform environmental studies 
associated with the type of nuclear-securing enterprise needed 
for our Nation. As you can see by the stacks of paper here in 
front of me on the table, this is not an approach we have taken 
lightly. And we have considered every possible option and 
considered all reasonable approaches to that effort, and we 
recognize, of course, that those approaches may change as the 
Nuclear Posture Review changes. So we have designed flexibility 
into our decisionmaking.
    To inform decisions on changing the face of the enterprise, 
we completed a public hearing process to help us reevaluate 
structuring of the enterprise, and this process ultimately 
included the development of the Programmatic Environmental 
Impact Statement and thousands of pages of business case 
analyses openly shared with the public to move this forward.
    In the development of this path forward, one of our primary 
objectives was to restructure the facilities containing large 
amounts of special nuclear material that are very costly to 
secure. Restructuring of the major R&D facilities was also an 
objective in order to eliminate unnecessary and costly 
redundancies across the enterprise. Over 2,000 people 
participated in more than 84 hours of public hearings, 
thousands of pages of analysis, independent assessments. All 
came together to form this Record of Decision that was 
mentioned earlier.
    Regarding the physical transformation of our essential 
plutonium and highly enriched uranium capabilities, we need to 
make decisions and investments to most effectively sustain our 
nuclear security enterprise for the future. Key projects, such 
as the uranium processing facility at Y-12 and the chemistry 
metallurgy and research replacement project at Los Alamos, are 
critical uranium and plutonium capabilities necessary not just 
to support our Nation's stockpile--of course they do that--but 
more importantly, in my view, lay the path forward on nuclear 
security broadly that the Nation, I think, will need out into 
the future. In many cases it will support any stockpile 
configuration, certainly the one we have now on down, and any 
most likely potential future scenarios.
    So with respect to the relationship between new facilities 
and the size of the stockpile, our investments in these 
projects are both sound and based on analysis. It is extremely 
important to recognize and take into account that neither our 
workforce numbers nor the square footage of our facilities 
scale linearly with the size of the stockpile. Establishing a 
minimum capability to support a greatly reduced stockpile 
enables by its very existence in a modern facility a sufficient 
minimum capacity to support the likely range of future 
stockpile scenarios.
    I would like to focus on plutonium just for a moment. The 
ability to perform research and development, surveillance and 
production with plutonium is essential to being able to perform 
the nuclear security work our Nation needs. Our research, 
surveillance, and manufacturing capabilities currently are 
carried out in facilities that are 50 to 60 years old and well 
beyond their economic lifetime.
    What will happen if we just maintain the status quo? The 
short answer is we will reach a point where we will be unable 
to perform our nonproliferation, nuclear counterterrorism, 
nuclear forensics, nuclear incident response and nuclear 
deterrent missions. I encapsulate those together as nuclear 
security more broadly.
    Every year the cost to maintain, operate and secure this 
physical infrastructure, this Cold War physical infrastructure, 
continues to rise. An independent group of scientists that 
advises the Federal Government, the JASONs, and the Defense 
Nuclear Facility Safety Board have all issued reports or 
findings over the past several years highlighting the need for 
NNSA infrastructure improvements and modernization.
    As Administrator, I am responsible for sustaining our 
nuclear capabilities to support the Nation's needs. I took a 
long, hard look at the enterprise and where we need to be. The 
need for change is urgent. We must act now to adapt for the 
future and stop pouring money into an old Cold War weapons 
complex that is too big and expensive.
    While much of the focus is on our physical infrastructure, 
I want to emphasize that people are our most important 
resource. I would like to urge that we direct significant 
attention to the need to retain those with nuclear security 
experience and the need to develop the next generation of 
scientists, engineers and technicians needed to perform this 
essential nuclear security work.
    We currently have 21 individuals within our workforce that 
have nuclear weapons design and underground testing experience. 
Our dedicated workforce is the key to our future and success. 
Their expertise constitutes a key element of our Nation's 
security, and we must work to provide them the tools and 
facilities to perform their mission.
    Our people support many more U.S. National security 
requirements than just the direct needs for the nuclear weapons 
program. For example, they provide critical support to nuclear 
counterterrorism and incident response activities. NSA is 
continually tasked with an increasing number of requests both 
nationally and internationally; nationally from the Departments 
of Homeland Security, the FBI, and other Federal, State law 
enforcement agencies. So I believe, enabled by our core 
weapons-related programs, these same individuals can and are 
using their skills in other broad areas of national security 
importance. Simply put, it is the understanding of nuclear 
weapons, nuclear effects, special nuclear material and the 
related properties that allow us to support this other work.
    Mr. Chairman and members of the subcommittee, in the end it 
all comes down to people and their unsurpassed technical 
capabilities and their ability to get the job done for our 
country. I sincerely appreciate the opportunity to discuss 
these important issues with you and look forward to your 
questions. Thank you.
    [The information follows:]

          

    Mr. Visclosky. Dr. Beckner.
    Mr. Beckner. Thank you, Mr. Chairman. I am Everet Beckner. 
I have been a part of NNSA, I have been part of the Department 
of Energy, I have been part of the U.K. Nuclear weapons 
program. These days I am a private citizen and happy to be here 
this afternoon.
    I am going to take a somewhat different approach in my 
testimony. I provided the written testimony, which has details 
of most of what I will talk about this afternoon, but I was 
asked to think about ways that came to my mind on the basis of 
30-plus years' experience in the business that might be 
approachable in terms of better ways to operate the complex, 
provide the national security that is required with less money, 
because it seems to be a trend in play right now which is very 
hard to deny, and that is the budget is getting smaller and has 
been getting smaller for about the last 5 years.
    There is every indication that we don't yet know what size 
the nuclear weapon stockpile is going to be in the future, so 
it is hard to argue that there is a place where you simply have 
to stop and put a floor under this budget, but for the time 
being, let us look--or at least what I have tried to do is to 
look for areas where it might be possible to make some changes. 
And in particular, I think you have to start with some changes 
in the way you think about the complex.
    Historically we have felt that the nuclear weapon complex 
had to be able to respond to any contingency that could come 
upon the scene. And so we funded it, and we expected that to be 
there with all the capabilities that might be required for 
whoever the enemy might be. For many years it was clear who the 
enemy was. These years it is not nearly so clear.
    So I think it has become obvious to all of us that the 
complex is too large for the world that we live in today, but 
the question is what can you do to protect the country so that 
you can assure the President that you have a nuclear weapons 
capability second to none and that can be responsive; that is 
safe, secure and reliable? And yet you say you want do it with 
less money or with a smaller budget.
    I believe where you have to look is to the question of full 
capability to confront any situation that might arise, because 
you can't have it both ways. You can't have capability that 
covers all contingencies and at the same time argue that the 
budget must continue to go down. So I don't think this has to 
be cataclysmic; I think it is something you have to think 
through carefully and say, can we get by with a little bit of 
this, a little bit less of this, or a little bit less of this 
and still provide a safe, secure, reliable stockpile that meets 
the President's requirements? That is really the confrontation 
we are having here.
    So let me give you a few ideas. Clearly you are going to 
have to find ways to reduce the complex. The committee has 
indicated it doesn't want to buy into all of the 
transformational ideas until it knows more about the Nuclear 
Posture Review, and that then would lead to the size of the 
stockpile. Well, those answers aren't going to be in hand for 
another 6 months or so. So you are here today having to make 
decisions about a stockpile that is going to be different, I 
think, in 6 to 12 months, or at least the stockpile requirement 
that is likely to be different in 6 to 12 months.
    I am left then with the proposition that you examine the 
major facilities that are presently contemplated at all of the 
sites and look for ways to take out what I would call excessive 
contingency planning, because I think NNSA really has scrubbed 
their projects to get them as small as they reasonably can be 
to cover all of the things that seem to be in front of the 
Nation, but you can't have it both ways. You cannot continue to 
shrink the complex and expect everything to be the way it was 
when you were spending an additional billion dollars about the 
time I left, 4 years ago.
    To be a little more specific, you have three major 
projects, major nuclear projects, on the books right now, PDCF, 
the Plutonium Disposition and Conversion Facility; you have UPF 
at the Y-12 facility, which is a uranium facility; and you have 
the plutonium facility at Los Alamos, major facilities that 
will cost 2 billion and up each. Those, I think, have to be 
scrutinized further to see if there is any way to take 
additional money out of them, because the budget cannot swallow 
those three projects as presently aligned.
    You go beyond that to all of the production requirements, 
you are going to have to look ahead to the stockpile that will 
be in hand a few years from now and ask can you get by with 
less total capability in the production complex? That then will 
lead you to the question of do you have more tritium capability 
than required? Because a smaller stockpile doesn't require as 
much tritium. So you can twist this many ways, but you are 
going to have to recognize all along that you are giving up 
something when you do that.
    Now let's talk about two or three things that are not so 
obvious in these discussions. I will bring up one that I am 
sure I will be challenged upon, and that is the security 
requirements. I believe they, too, need to be looked at again, 
because in the past 8 years the security budget in NNSA has 
tripled. It has gone from $300 million to $900 million since 9/
11. I think everybody believes, well, you can't have too much 
security. But pretty soon you can't afford all of this. So I 
would argue that you go back and look at it again, and at the 
very least compare it with the way that DOD does security. They 
have nuclear weapons in their custody. NNSA has nuclear weapons 
in their custody. We should make those two requirement sets, if 
not the same, pretty close to it, and at present I think NNSA 
is spending a lot more money than the DOD is.
    Other possibilities. I see two areas where I think NNSA 
could get some help with its programs, meaning some other ways 
of paying for work that it is presently paying for out of its 
own budget. In particular the President has brought forward the 
proposition that the DOE needs to conduct a more vigorous 
fusion research program. Well, it just so happens that NNSA is 
about to bring into operation the world's biggest and, I think, 
finest inertial confinement fusion facility at Lawrence 
Livermore. It would seem to me that this new fusion initiative 
in DOE should be in a position to pay part of the bill, because 
the fusion activities at NIF are going to be very relevant to 
fusion questions the world over. So maybe that program, the 
civilian side, could pick up part of the bill of the Inertial 
Confinement Fusion Program.
    Similarly, but a little different, it turns out the Naval 
Reactor Program and the Nuclear Nonproliferation Programs both 
get work done at the Y-12 plant, which is funded by NNSA 
defense programs. So in the spirit of, you know, paying the 
bill, the person paying the bill who gets the benefit, I think 
that would perhaps save you a little money as well.
    I think I have to raise the question of whether the whole 
concept upon which NNSA was founded, namely semiautonomy, needs 
to be reopened. I think it was a compromise at the time. I 
think you have ended up with too much duplication and 
capability between DOE and NNSA, and it is costing money. You 
have two general counsel's offices. You have got a lot of 
administrative functions that are duplicative. You have got a 
lot of oversight that is duplicative between DOE and NNSA. I 
would argue it is time it look at what NNSA was intended to be 
able to do and what, in fact, it is now organized to do.
    Finally, I think I would echo some of what Administrator 
D'Agostino said about the transformation program. The committee 
has been reluctant to move vigorously on this. NNSA has worked 
very hard to find a way to bring forward a plan to shrink the 
complex. It takes money up front to save money later, and I 
think if you merely look at those front-running programs that 
could be brought forward which would pay back the expenditure, 
I would argue, in the next 5 to 10 years, that is money well 
spent. And I would just urge that you take a hard look at what 
has been brought forward in that program and see if you can't 
find a way to fund it so that you can get on with changing the 
complex.
    That covers most of what I had to say today. The remainder 
is in my written testimony, and, of course, I am available for 
questions.
    Mr. Visclosky. I appreciate it very much.
    [The information follows:]

          

    Mr. Visclosky. Dr. Garwin.
    Mr. Garwin. Thank you, Mr. Chairman, Mr. Ranking Member. I 
welcome the opportunity to present my views on reducing the 
cost of the nuclear weapons complex. I submitted my written 
testimony for the record and draw on that for the spoken 
remarks.
    First we need most for an effective, affordable nuclear 
weapons complex policy decisions on the size and nature of our 
nuclear weapons stockpile. This is an urgent responsibility of 
the National Security Council and has far-reaching impact not 
only on the weapon delivery systems of the Department of 
Defense and military forces, but on the National Nuclear 
Security Administration activities and facilities in creating, 
maintaining and disposing of those nuclear warheads and bombs.
    The Security Council decision should take into account the 
report of the Congressional Commission on U.S. Strategic 
Posture expected April 1st, and should guide and also draw on 
the Nuclear Posture Review to be conducted by the Department of 
Defense.
    As indicated in my written testimony, not only is the 
burden of maintenance reduced with much diminished numbers of 
nuclear weapons in the stockpile, but the nature of the 
stockpile depends on such decisions. For instance, if major 
modifications were to be made to the existing nuclear stockpile 
involving a new plutonium-containing nuclear pit, a production 
rate of 50 per year at the Los Alamos TA-55 plutonium facility 
would require 50 years of operation to modify half of a nuclear 
weapon force of 5,000 nuclear weapons.
    It is essential to maintain surety of the nuclear weapons 
and the nuclear weapon materials against theft and misuse, but 
even if such modifications provided perfect surety for the 
modified or replaced nuclear weapons, they would have very 
little impact on the security of the Nation and the world 
because terrorists or thieves would concentrate on the weapons 
not yet modified or replaced. In contrast, if the total 
stockpile were 500 warheads and bombs, a production rate of 50 
per year would replace the entire stockpile in 10 years.
    And a third example. If the existing weapons could well be 
maintained and fully modernized by thoroughly tested 
modifications outside the nuclear explosive package, retaining 
the existing plutonium pits with only test production of new 
pits, so in warm standby mode that would permit the elimination 
of entire portions of the projected nuclear weapons complex.
    My second point is that we must maintain and invest in 
people for the future, even if the nuclear stockpile is 
diminished in numbers. It is only by the contributions of 
vigorous, responsible scientists and engineers in the nuclear 
weapon laboratories that we can plan on keeping our nuclear 
weapons safe, secure and reliable.
    These nuclear weapons experts will be doing a job of 
critical importance, and while they don't need luxury, they do 
need supporting tools of simulation and of experimental 
facilities both large and small. The ability to conduct nuclear 
explosion testing of our nuclear weapons would add little to 
our confidence in safety, security and reliability. So, as we 
have heard, we should not sacrifice brains for buildings, and I 
add we should not sacrifice brains for fee.
    My third point is one of disagreement with the oft-heard 
statement that inevitably, with the passage of time since the 
last nuclear explosion test in 1992, our confidence in the 
safety and reliability of existing nuclear weapons is bound to 
decrease. Quite the contrary. In my opinion, our confidence is 
likely to increase with time because of the increased knowledge 
obtained from our advanced tools of simulation that experiment 
and the deeper understanding that the tools provide to our 
experts. This modernization of our understanding is accompanied 
by modernization of the existing weapons by replacement and 
enhancement of the non-nuclear components outside the nuclear 
explosive package. That includes the primary and the secondary 
of the nuclear weapon.
    One example is the announcement by NNSA in late 2006--I got 
it wrong in my testimony, I said 2007--that the nuclear weapon 
laboratories had established that the plutonium pit at the 
heart of each of our nuclear weapons would last at least 85 
years as contrasted with the number previously believed to be 
about 45 years. Likewise, the science-based Stockpile 
Stewardship Program has enabled the production at Los Alamos of 
new nuclear pits for the W88 missile warhead.
    Fourth, as I indicated in the previous discussion of 
overall nuclear weapons surety as contrasted with the surety of 
individual weapons, the consideration of the replacement 
warhead program lacks a quantitative assessment of the benefit, 
the risk and the cost streams as new warheads are assumed to 
enter the force. There is lacking also a comparison with the 
overall impact of improved performance surety, for instance, 
that could be obtained sooner with existing weapons by 
improving the transport containers that protect the weapons 
during their most vulnerable time. Such bounding analyses can 
be carried out without detailed knowledge of possible 
replacement warheads.
    Fifth, smaller nuclear weapons stockpiles will reduce the 
cost of the nuclear weapon complex only if that is a major goal 
of the NNSA and the Congress. Cost reductions can be achieved 
by increased collocation of production and design activities 
and by modular approaches to the task so that capabilities 
could be expanded by replication of bays, tools and staff, 
rather than by oversized new facilities for large-scale 
operations.
    In the absence of guidance as to nuclear weapon numbers and 
types that I expect from the National Security Council, there 
is little rationale for an efficient program to modernize the 
nuclear weapons complex, and as a result we see competent 
officials and their support contractors recommending routine 
replacement and upgrading the facilities.
    Large up-front expenditures that could accommodate massive 
programs that are unlikely to be realized are not in the 
national interest. More generally, the overall advance of U.S. 
national security and the U.S. National economy depends upon 
our countering the forces of industrial and local political 
support for expenditures in contrast with the normally diffuse, 
but more important interest in saving on each individual 
program.
    Responsible and imaginative frugality is important both to 
our security and to our economy. In this regard I note that the 
recent withdrawal of Duke Energy in a February 27th, 2009, 
Securities and Exchange Commission filing, from the program to 
fuel commercial power reactors with mixed oxide fuels, MOX, 
derived from excess weapon plutonium. I judge that all such 
work within DOE should cease. Considerations of plutonium fuel 
should be limited to its possible use in future breeder 
reactors if and when such can become competitive with existing 
light-water reactors in cost and safety. Security aspects of 
plutonium materials should be addressed primarily by 
consolidation rather than by disposition, either by use as MOX 
or by vitrification, and a commitment to a mined geological 
repository such as Yucca Mountain.
    Thank you for your attention. Obviously I would be glad to 
answer questions and hear comments.
    Mr. Visclosky. Thank you for the information on Duke Power.
    [The information follows:]

          

    Mr. Visclosky. Mr. Coyle.
    Mr. Coyle. Chairman Visclosky, Ranking Member 
Frelinghuysen, I very much appreciate the opportunity to appear 
before you today.
    Mr. Frelinghuysen. Is your mike on?
    There we are.
    Mr. Coyle. Just 3 weeks ago the Obama administration 
released its overall top-line budget request for fiscal year 
2010 stating, ``Development on the Reliable Replacement Warhead 
will cease, while continued work to improve the nuclear 
stockpile safety, security and reliability is enhanced with 
more expansive life-extension programs.''
    This policy change will impact significantly the planning 
for NNSA's complex transformation effort and will also reduce 
the overall cost since future production capability can be 
reduced. This is particularly true for future plutonium pit 
production that NNSA has been planning at higher-than-required 
levels.
    As such, today your witnesses are in the position of 
commenting on a plan for Complex Transformation that has been 
overtaken by events. Assumptions made about how many nuclear 
weapons might be produced in the future are key to sizing the 
NNSA production complex for the future. Now that the Obama 
administration has made a decision to halt the RRW, the 
production workload for Complex Transformation can be cut 
essentially in half.
    In testimony last July before the House Armed Services 
Committee, the GAO reported, ``NNSA and DOD have not 
established clear, long-term requirements for the nuclear 
weapons stockpile. It is GAO's view that NNSA will not be able 
to develop accurate cost estimates or plans for complex 
transformation until stockpile requirements are known.''
    The next Nuclear Posture Review (NPR) will be conducted by 
the Obama administration in 2009 or later, perhaps early 2010, 
and will be influenced by the administration's efforts to 
obtain lower stockpile levels in negotiations with Russia. This 
document will form the basis for planning complex 
transformations, and it will be futile for NNSA to try to 
proceed with complex transformation without it. In particular, 
the Chemistry and Metallurgy Research Replacement Nuclear 
Facility at Los Alamos and the uranium-processing facility at 
Y-12, proposed under complex transformation should not be sized 
or funded by this subcommittee based on outmoded assumptions.
    The Complex Transformation effort has been assuming a large 
U.S. nuclear arsenal of roughly 6,000 warheads, including 
reserves, for the foreseeable future; that is, for 50 years or 
so. However, the total U.S. stockpile is already much smaller 
than this. According to an official estimate by the U.S. State 
Department, ``The number of U.S. operationally deployed 
strategic nuclear weapons was 2,871 as of December 31st, 
2007.''
    Further reductions have occurred since. As reported by the 
Washington Post and the Bulletin of Atomic Scientists last 
month, the United States has successfully reduced its 
operationally deployed nuclear weapons stockpile, reaching in 
early February or early last month the upper level of 2,200 
warheads required under the Moscow Treaty, and reaching that 
level 3\1/2\ years ahead of schedule.
    However, in recent years NNSA has proposed wide-ranging 
production rates that are not consistent with the current 
realities. For example, in the 2005 budget request, NNSA 
proposed a modern pit facility that could produce up to 450 
pits per year, much more than needed. In October 2006, after 
this subcommittee questioned the need for such a high level of 
production, NNSA proposed a consolidated plutonium facility 
with the capability to produce 125 pits per year. When this 
subcommittee questioned that proposal also, the current complex 
transformation Supplemental Programmatic EIS proposed instead 
the capability to manufacture up to 80 pits per year at Los 
Alamos.
    As the U.S. nuclear weapons stockpile is reduced, and it 
appears that it will be the policy of the Obama administration 
to reduce it, then by reusing and recycling pits, an expensive 
high-capacity plutonium pit production facility is not 
necessary. In fact, the Pantex plant is currently authorized to 
reuse up to 350 pits per year, which Pantex itself points out 
is far less expensive and environmentally damaging than the 
production of new plutonium pits. And Pantex currently stores 
more than 14,000 plutonium pits and has requested authority to 
increase its storage capacity to 20,000 pits. Thus, there is no 
shortage of pits for reuse or recycling, and, if needed, 
smaller numbers of pits can be made at Los Alamos. In general 
terms, an average production rate of only about 25 pits per 
year could sustain the U.S. Strategic Stockpile if it were 
reduced to about 1,000 weapons by the year 2050.
    In my view, this subcommittee should task NNSA to examine 
its complex transformation plans for inflection points; that 
is, workload assumptions that create significant benefits in 
the relative cost and schedule to achieve a particular 
capacity. Such a study could be conducted by an independent 
studies and analysis center, such as the Institute for Defense 
Analysis or RAND, to define a more optimum and adaptive 
production complex than one sized only for a maximum or peak 
production rate higher than expected to be required in the 
future.
    In addition to sizing what I would call an ``Adaptive 
Complex'' to sustain the stockpile projected in 2012 at less 
that 2,200 warheads, NNSA could also look at the 1,000 
strategic warhead level, about half that level, and, at 500 
warheads, about one-quarter of the 2012 level. The reason for 
choosing these two levels is the proposals for levels of 1,000 
and 500 have gained considerable constituency in this country. 
However, cost inflection points might be found at somewhat 
higher or lower values, and if so, that would be important to 
know.
    Then for the Adaptive Complex, NNSA would consider the type 
of production complex and laboratory structure it would need to 
sustain perhaps a strategic stockpile of just a few hundred 
weapons, maybe only 100. In the years ahead, if the U.S. and 
Russia could agree to reduce their stockpiles to the order of 
100 warheads, at that point the nuclear weapons capabilities of 
other countries, China, France, Great Britain and so forth, 
must be negotiated downward in concert with further reductions 
in U.S. and Russian stockpiles.
    I just want to add that from the point of view of an 
American president, tactical nuclear weapons have little 
deterrent value, and it is difficult to imagine the 
circumstances in which an American president would order their 
use. Because there are large numbers of tactical nuclear 
weapons in the U.S. arsenal, which we still retain, and the 
likelihood that an American president would not order their 
use, complex transformation does not need to plan appreciable 
capacity to replace those tactical nuclear weapons. Thus, 
Complex Transformation that supports operationally deployed 
strategic nuclear weapons supports the U.S. nuclear weapons 
deterrent overall.
    Mr. Chairman, this completes my opening summary, and I 
would be pleased to take any questions that you or the 
subcommittee might have.
    Mr. Visclosky. Thank you very much.
    [The information follows:]

          

    Mr. Visclosky. Dr. Eggenberger.
    Mr. Eggenberger. Thank you, Mr. Chairman and members of the 
subcommittee. I am A.J. Eggenberger, and I am the Chairman of 
the Defense Nuclear Facilities Safety Board, known as DNFSB, 
and our agency was established by Congress to provide nuclear 
safety oversight at DOE and, of course, now at NNSA. We provide 
this oversight by making recommendations and suggestions to the 
Secretary of Energy.
    I will be brief. Some of the general issues from a nuclear 
safety point of view that we are dealing with are the 
implementation of integrated safety management at NNSA, and, at 
the suggestion of this subcommittee, the integration of nuclear 
safety into early design projects. And we are dealing very much 
with the use of unsound facilities across the complex.
    NNSA should not be relying on outdated facilities, and (Oak 
Ridge) two examples that I give you are the 9212 complex at Y-
12 (Oak Ridge) and the CMR (Chemical and Metallurgical 
Research) facility at LANL (Los Alamos National Laboratory). It 
appears that the 9212 complex will need to serve in some 
fashion until about 2018, plus or minus. I am not quite sure on 
those dates, but they are close. And the CMR facility will 
probably need to serve until about that same time, at 2017 or 
2018. There are programs to enhance nuclear safety until those 
time periods at both the facilities.
    One other thing, and this was mentioned by other people at 
the table, was the importance both on the DOE's side and the 
contractor's side of technical management excellence within the 
complex. And I say both at the headquarters and at the field 
facilities.
    Let me talk a little bit about the CMRR; in other words, 
the replacement facility that is proposed for the CMR. Section 
3112 of the National Defense Authorization Act of 2009 put a 
funding limit on that project for NNSA. It is subject to a 
certification by the DNFSB and NNSA that safety issues are well 
understood and toward resolution by NNSA.
    This process of certification that the Board is conducting 
is well understood by NNSA. It consists of items that we need 
to have delivered to us so that we can make a certification. 
And it is based on DOE requirements, and it has to do mostly 
with identification of safety systems, the identification of 
safety controls, and the establishment of requirements and 
criteria.
    It appears to me that this certification, if things go as I 
understand them as of this week, we should be able to do that 
in the time frame of June through September, again depending 
upon the deliverables. There are specific nuclear safety items 
that the Board is interested in and looking at the particular 
NNSA sites.
    But, in summary, I would like to say nuclear safety is 
preserved basically by having very well trained and 
understanding people in the technical management area. 
Improving nuclear operations is a good bang for the buck, and 
working in safe facilities such as ones that have designed 
criteria that are current and protect both the workers and the 
public.
    That ends my oral statement. I am available for any 
questions, Mr. Chairman.
    [The information follows:]

          

    Mr. Visclosky. Gentlemen, I really appreciate your 
testimony and your preparation. I also want to thank all the 
Members for their attendance.
    I just have one short observation and one quick question 
for Dr. Beckner, and then I will turn it over to my Ranking 
Member.
    Doctor, you had mentioned in your statement that the 
committee has been working towards a smaller budget for NNSA. I 
wouldn't quibble over the semantics, but would state that my 
position would be that we want to spend what is appropriate. At 
some point if there is a discernible number of warheads that 
are defined by a strategy that then defines what the complex 
should be, that is what we should spend. It might be more than 
we are spending today or less, and would not argue at all that 
no matter what the transformation looks like, there will be 
some up-front costs. And it is worth it to the American 
taxpayers to make that investment up front to have a 
rationalized complex that potentially, in relative terms at 
least, costs them less.
    The one point you had made is that--you made a number of 
them, but the one I would ask you a question on is NNSA, you 
say they are prepared essentially for every contingency. Who 
defines the contingency? Is that NNSA, or are those 
contingencies that Mr. D'Agostino has to deal with driven by 
someone else, such as DOD and their requirements?
    Mr. Beckner. It is defined in a number of different ways by 
a number of different agencies. The DOD, I think, is the 
biggest hammer around in that sense, because they are the ones 
that the President expects to be utilizing nuclear weapons if 
that has to be done. And so the stockpile when it gets defined 
is heavily influenced by DOD requirements. And DOD requirements 
then get passed over to NNSA pretty much as something that NNSA 
has to respond to. For the past, what has it now been, almost 
10 years, the stockpile has been coming down, but every year 
you are working with something that is uncertain. What is it 
going to be this year, or what is it going to be 2 years from 
now? And the slope continues down.
    The DOD continues to believe it has to respond to emergency 
contingencies wherever in the world they may be, and NNSA is 
expected to support that. And it is there that I think the real 
problem arises. What does it really mean when you say NNSA has 
to support these broad range of contingencies, when, in fact, 
everybody looks at it and says, well, they are coming down, so 
why can't you come down faster? Having been a part of the 
system for a while, that is the hard part, and that is the part 
this committee has to deal with as well, is what is the right 
thing to do when you know that in all likelihood the stockpile 
will be smaller 5 years from now than it is today, but you 
can't bet on it? That is the problem. And so historically NNSA 
has tried to have a capability to respond to all of those 
uncertain requirements, and it means generally the complex is 
still larger than it has to be.
    Mr. Visclosky. I do think it is an important point, and, 
Mr. D'Agostino, I recognize you because this is driven by 
customers, if you would, that have a certain demand. And one of 
the things that we have been pushing collectively for a number 
of years is to make sure everyone is talking to each other. And 
I think more than one witness also pointed out that maybe there 
ought to be some sharing of costs.
    We were aghast within the last 18 months that a high-
ranking official at the Department of Defense acknowledged that 
he did not know who was paying for this and was under the 
misimpression that they were. Well, if they are not, then there 
is not as much pressure to be adroit and attentive to what the 
true requirements are. And, again, that is the point we have 
been trying to get at.
    Mr. D'Agostino.
    Mr. D'Agostino. Thank you, Mr. Chairman.
    Mr. Visclosky. None of us have ever figured those mikes 
out, so don't worry about it.
    Mr. D'Agostino. I would say Dr. Beckner and I have a 
similar experience. Mine has been more recent. On the Nuclear 
Weapons Council, on which the Administrator's position sits, I 
have been that focal point. And I can use plutonium as an 
example, the plutonium pit manufacturing capability.
    As we are going through in the last 2 years, it was because 
of the effort of the Department of Energy/NNSA's representation 
on that panel that got the Defense Department and us together 
to say, you know what, let us not build 450. Let us get away 
from there. Stay away from 125. Stay away from 50 to 80, 
because we know that there is going to be an election, there is 
going to be a Nuclear Posture Review; that the most important 
thing we do is maintain that capability, which ends up to 
coming down to having the right people, and working the right 
people. And so I decided, I signed the Record of Decision on 
plutonium production, that we would not exceed the minimum 
capacity, which was up to 20 pits per year, needed to maintain 
the capability, and we would hold off on the decision until the 
Nuclear Posture Review. We recognized that that could 
potentially drive some infrastructure changes.
    Quite frankly, there is a chart that we actually have up 
here, and I think you actually may have this on your desk in 
front of you, which shows that our endgame, quite frankly, is 
to significantly reduce the amount of plutonium space the 
country has and not have it in two geographic locations, but 
only have it in one; and not have it spread out over seven 
different sites across those two geographic locations, but only 
have it essentially in two locations within one site.
    What we end up doing is we drive the cost down dramatically 
to just maintain that minimum capability. It turns out that 
that minimum capability can take you from zero at the floor, or 
the desire to make maybe one pit per year, up to about 50 or 80 
maximum. And given the correct points that were brought up 
dealing with expected reductions in the size of the overall 
complex, we think that that production rate, that minimum 
capacity, would probably never need to go above that.
    But we don't want to presume what the NPR says, so we don't 
want to ask for more resources, for example, to take us beyond 
that point. But there is plenty of discussion at the Nuclear 
Weapons Council on plutonium and uranium capability. I am the 
break or the lid on the pressure cooker, if you will, to kind 
of bring people to reality, because I testified before your 
committee, sir, and others as well, to justify that. So I am 
quite aware of that tension back and forth. Thank you for the 
opportunity to respond.
    Mr. Visclosky. Thank you.
    Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Both the Chairman and I serve on the Defense Subcommittee 
on Appropriations and obviously on this committee. I don't 
think there is anything more important to me than our national 
security. Just across the wire service earlier today from BBC, 
the Russian President--and I somewhat quote from the BBC 
announcement--has said Moscow will begin a comprehensive 
military rearmament from 2011. The President said the primary 
task would be to increase the combat readiness of Russia's 
forces; first of all, our strategic nuclear forces.
    Now, I am not here to promote a nuclear arms race. That is 
something we don't need. I am all for reducing our nuclear 
weapons stockpile, but we are making some substantial 
investments here, and I would like to make sure that we are 
erring on the side of our national interest. I don't want to 
invest in facilities that are providing too much. On the other 
hand, I don't want to invest in, shall we say, facilities that 
are providing too little. And we may not be able to talk about 
it in here, but we can certainly reference it. Who knows what 
our adversaries are up to. They may have signed treaties, and I 
am pointing perhaps to the People's Republic and to Russia, and 
my view is trust and verify. Where are we going?
    Administrator.
    Mr. D'Agostino. Thank you, sir. Make sure I have this 
right. There was a lot of details that, of course, we can't 
talk about here, but what we can say is the Russians have a 
different philosophy in their approach to maintaining their 
arsenal. Their philosophy is a fairly aggressive production, 
kind of build and replace, depending on what their arsenal is. 
We think we know what it is, but I won't say it here, but it is 
a build and replace. It is to constantly exercise their 
production and research and design infrastructure. Scientists 
and engineers do their best work when they are actually doing 
work. You can learn a lot about your problems that you are 
addressing if you are actively trying to engage in those 
problems. That is the philosophy, the approach, that the 
Russians have done.
    Ours has been different: to invest in the science and 
technology to understand. Dr. Garwin is absolutely correct. We 
have learned a lot about our stockpile as a result of the 
investments over the past 15 years.
    Mr. Frelinghuysen. So in some ways you don't disagree with 
some of his contentions?
    Mr. D'Agostino. Some of it I don't. I would probably like 
to have a discussion later on others later. But the reality is 
we have learned a lot about our stockpile. We are very 
confident in some areas; we are actually less confident in 
other parts of our stockpile, but it is two different 
philosophies. We took the approach starting in the 1990s to 
reduce the investments in our production infrastructure, and 
for over a decade, quite frankly, we have underfunded that 
capability. This is not what the Russians would have done. And, 
in fact, we were having some impact on the science and 
technology. What we are trying to do right now is make sure 
that we maintain a capability. I am not saying a large 
capability.
    Mr. Frelinghuysen. So can you say for the lay person, 
capability is one thing----
    Mr. D'Agostino. Yeah.
    Mr. Frelinghuysen [continuing]. But does that translate 
into flexibility?
    Mr. D'Agostino. Absolutely. I think what we want to do, 
because I believe--and you don't have to trust me, we have 
independent business case groups, the Cost Analysis Improvement 
Group. We have actually taken Mr. Coyle's thoughts and have had 
independent groups of people look at it, and they have said 
this is that minimum capability that you need to maintain, and 
what that allows you to do is if the country has a need to ramp 
up. Now, hopefully we won't get ourselves into a global 
security situation where we might need that, but if the country 
has to ramp up, we could add----
    Mr. Frelinghuysen. You are assuring us to some degree----
    Mr. D'Agostino. That is right.
    Mr. Frelinghuysen [continuing]. That what we are moving 
into, we made some substantial investments the cost of which, 
the construction of which, seems to escalate.
    Mr. D'Agostino. Right.
    Mr. Frelinghuysen. That we are not building into some 
degree of obsolescence?
    Mr. D'Agostino. Yes, sir. There is a range between building 
one unit a year and 100 units a year. Just being able to build 
one allows you to build 100. That doesn't mean that you will 
build 100 or add the extra shift work, but you can go up to 100 
a year.
    But given where this administration has said it is going, 
we think we will probably end up somewhere in that range. And 
so I want to have one good uranium capability for the United 
States of America, one good plutonium capability for the United 
States of America, and one good high explosives capability for 
the United States, and not do more than that and provide that 
flexibility into that system.
    Mr. Frelinghuysen. So that gives you a degree of comfort 
that we would have the potential to ramp up if we found 
ourselves in a somewhat more adversarial--we have our own 
posture. Others have their posture.
    Mr. D'Agostino. Right. Heaven forbid we would get into that 
situation, but if we had to, we would build flexibility into 
some of the initial design work on this plutonium capability, 
the CMR replacement facility that you heard about, to add more 
space to. That is not in our current plans. We are not planning 
to do it right now. It is not in our baseline. But that 
capability exists.
    Similarly, with uranium, adding more lathes and more 
workers could provide a ramp-up. But what we are not trying to 
do, we are not going there now. We want to make sure that we 
provide that one basic capability.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Edwards.
    Mr. Edwards. Mr. D'Agostino, can you tell us regarding our 
nuclear complex--you touched on this, but I want to be clear--
what decisions should we make now versus what decisions should 
we delay until after the Obama administration has reviewed our 
nuclear posture and made decisions on the size of our nuclear 
forces?
    Mr. D'Agostino. I think my approach would be to continue on 
with the design work because, in the end, a decision to move 
forward on a project is a decision. Especially when you start 
turning ground over--if you will, pouring concrete--it is hard 
to back off from that; and in our projects, the nuclear 
facility and the uranium processing facility have some more 
design work that has to get done.
    Dr. Eggenberger referenced the need to get a certification 
on integrating safety into design.
    We have learned in the past that we have problems with our 
projects when we don't fully understand what we are doing 
before we lock down a cost, schedule, and scope. We are 
learning from the past. We are not going to do that. We will do 
as much of the design work as possible before we actually start 
breaking ground.
    So when the nuclear posture review process is completed--we 
understand it is supposed to be by December, and as you know, 
the Under Secretary for Policy Michele Flournoy has come on 
board recently, so we will be starting that process--the 
Congress, the administration, the committee will have, in all 
likelihood, some indication before that point of how things are 
going.
    I don't think we are going to be overcommitting ourselves 
this year. I think this is a real issue for the 2011 budget on 
how we commit large amounts of resources in certain areas. I 
think we have enough flexibility right now, sir.
    Mr. Edwards. Thank you.
    Dr. Eggenberger, you referenced unsound facilities across 
the nuclear complex. What do you mean by ``unsound''? And is 
the public at risk? Are employees at the complexes at risk? 
Would you elaborate on that?
    Mr. Eggenberger. I knew you would ask that question.
    When I talk about ``unsound,'' basically I mean they do not 
meet current codes and standards. And let's look at the two 
facilities that I talked about, the 9212 complex at Y-12 and 
the CMR complex at LANL; and your question was, are they safe 
or is the public at risk? And what we have been able to do is 
to convince NNSA to put in a life extension program at both of 
these facilities to be able to reduce the consequences of an 
accident over a reasonable period of time.
    For example, at the 9212 complex at Y-12, they have put in 
a program where they monitor certain systems and have certain 
tasks that they do on upgrades on a yearly basis; and then they 
report back to us yearly on what the state of the facility is, 
so, if we need to change, we are able to do that. So the Board 
is comfortable if that process continues up to a date of about 
2017 or 2018.
    Now--so that is the 9212 complex at Y-12.
    Now, if you go to the CMR facility at Los Alamos, the 
Department, NNSA, is in the process of coming up with a process 
for getting out of the CMR facility. That was briefed to me 
last week. I don't have a complete understanding of it myself 
as of yet, but the NNSA has undertaken a process to remove 
certain activities from the CMR facility and also to reduce the 
amount of nuclear materials in that facility. That will enhance 
safety should an accident occur. And the time line, again, is 
about the same as the 9212, 2017 or 2018, but we believe--the 
Board believes that getting out of that facility is fairly 
important.
    Mr. Edwards. Thank you for that. I wish we, for more 
specificity, were in a classified briefing; but given we are in 
an unclassified briefing, I think that is as good an answer as 
one could give in this setting. Thank you.
    Mr. Visclosky. Mr. Wamp.
    Mr. Wamp. Thank you, Mr. Chairman.
    The first question is for the administrator, following up 
on what we have already heard, the President's Nuclear Posture 
Review. Don't you think the committee should assume that the 
NPR will require that we maintain our stockpile's reliability?
    Mr. D'Agostino. Yes, sir, absolutely.
    Mr. Wamp. And don't you think we should assume that it will 
require certification?
    Mr. D'Agostino. No question about it.
    Mr. Wamp. And that it will continue to provide fuel for our 
Navy?
    Mr. D'Agostino. Yes, sir.
    Mr. Wamp. All right. So we say that we have to wait for it, 
but under those basic assumptions, do you see any scenario 
where there would not be a need for the capability that the 
UPF--and I apologize for seeming parochial, but this is one of 
these three major projects that Dr. Beckner referred to that I 
live with every day. I have been to Los Alamos and I know the 
others, but this is the one that I live with. It is not really 
parochial; it is just my piece of this action.
    So on UPF is there any scenario where the capability that 
UPF provides would not be needed?
    Mr. D'Agostino. The capability is going to be needed 
whether we have a stockpile of zero weapons or a stockpile of 
thousands of weapons.
    Mr. Wamp. Right. So even if there are no new weapons--no 
new weapons, no life extension, you still have to have UPF?
    Mr. D'Agostino. Absolutely.
    I think, if I could add to in answer to the question, one 
of the shifts that I want to push very strongly is to shift 
away from a nuclear weapons complex view, which I believe is a 
Cold War view, and shift to a nuclear security enterprise view, 
which is--nuclear security means nonproliferation, it means 
being able to do nuclear forensics and attribution of a device, 
an improvised nuclear device. Hopefully, one will never go off, 
but we have to be prepared.
    It means being able to do work around the world collecting 
material, it means doing intelligence work and analysis, it 
means being able to respond to emergencies. This is a shift 
towards nuclear security. And the UPF actually is one of those 
facilities that supports naval reactors in fuel, it supports 
nonproliferation in a whole variety of areas in the 
Intelligence Community as well as the stockpile.
    Mr. Wamp. I want to keep this line of questioning together 
within this 5 minutes. I will get gaveled down.
    9212 is where this work is done now, right?
    Mr. Eggenberger. That is my understanding.
    Mr. Wamp. This is one of the facilities that Mr. Edwards 
asked us about. I just want everybody to know that when 
Chairman Hobson came to this site and went into the heart of Y-
12 is when this committee decided to fund the HEUMF. Because he 
saw it.
    That is absolutely essential to understand Mr. Edwards' 
question of Dr. Eggenberger. You have to see it. You have to 
understand how old it is, when it was started, and why new 
facilities are needed.
    But 9212--I think in your testimony--there are health and 
safety problems today associated with the workforce in these 
facilities, correct?
    Mr. Eggenberger. That is correct.
    Mr. Wamp. And I believe that over the next 10 years--which 
is still questionable, whether 9212 can be maintained as 
capable for its production for 10 years, which would be the 
time it would take to actually build the replacement of UPF, 
that the cost of maintaining it exceeds the cost of the UPF--
the total cost associated with 9212 could exceed the cost of 
UPF; is that not correct?
    Mr. Eggenberger. That I don't know. Maybe the 
administrator--I don't know that, Congressman.
    Mr. Wamp. We need to look at that.
    But I think we are running into numbers that would very 
much justify the expense, as big as it is. And even as big as 
it is, Dr. Beckner, I think some of your testimony said that 
you think it was 25 percent too large; is that right?
    Mr. Beckner. I would say that it would be a good idea to 
try to take 25 percent out of it.
    Mr. Wamp. So 25 percent smaller is very different than not 
at all.
    Mr. Beckner. I didn't say not at all.
    Mr. Wamp. Taking ``not at all'' out of the question, you do 
believe that there is a need for us.
    Mr. Beckner. Oh, yes, I say that in my testimony.
    Mr. Wamp. I will come back on the next series. I wanted to 
get out of that together, Mr. Chairman.
    Mr. Visclosky. Mr. Davis.
    Mr. Davis. Mr. Chairman, thank you very much.
    And I do appreciate the testimony that each of you has 
given and certainly the opportunity to visit you on several 
issues that I think are extremely important to our national 
defense--even beyond our national defense as far as weapons are 
concerned, but also as we look in the future as we deal with 
energy and the different areas of energy. I think nuclear 
energy is certainly a part of and must continue to be a part of 
what we expect as we continue on the path to energy 
independence.
    I want to direct questions also at the building at 9212. I 
have probably a local interest as well. I represent a part of 
Oak Ridge that is in Roane County, not a great deal of it; my 
friend from the other part of Tennessee, Mr. Wamp, represents 
the largest share of that. But Roane County has for many years 
been proud to claim Oak Ridge as part of the population inside 
Roane County.
    I, too, have visited the building at 9212 when I was a 
state senator and discussions then about an antiquated building 
built in the early 1950s and the hazard that employees may 
have, the scientists who are there. As my grandson would look 
at a space movie and see the space suits, they still wear those 
there for protection in this particular facility at 9212 where, 
in fact, with the new structure probably less than 1 or 2 
percent of the time they would literally be required to have 
protective clothing on.
    My question is mainly directed at any who can answer this. 
I have some information that says there would be considerable 
savings. Does anyone have an idea how much we would save on 
maintenance each year--each year, if a new structure was 
completed and built?
    Mr. D'Agostino. I will start with that.
    We have looked at the life cycle costs, the difference 
between maintaining 9212 and moving forward, recognizing that 
it presents some pretty significant cash flow problems, and 
that is something that clearly has to be balanced. But we 
believe that about $68 million--it is in the $60-ish million 
range maintenance cost associated with maintaining 9212 and the 
supporting infrastructure; there are other old buildings around 
there. That is the difference between doing that versus the 
maintenance of a UPF, once the UPF is built. Of course, you 
have to build it before you can realize that savings. So, it is 
a cash flow problem.
    Overall, if you factor in security, operational savings, 
maintenance, it is about $205 million a year. And that is not 
just a cost we have done up in Y-12 or the NNSA; it is 
something that we have had other people look at and validate, 
in fact, and do their own study, quite frankly, because this is 
of such an important component of ours.
    But again it does present a bit of a cash flow problem and 
that is going to be the challenge that the administration is 
going to have to present to the committee on our way through.
    Mr. Davis. So if we had the ribbon cutting for the building 
this year we would save $205 million a year for the next 
several years, including inflation? In essence, the building 
would almost pay for itself in 8 or 10 years?
    Mr. D'Agostino. Yes, sir. And that is as compared to doing 
business the way we are currently doing business.
    Mr. Davis. And it would also provide a much safer work 
environment for the employees who work there, this new 
building?
    Mr. D'Agostino. There is no question about that on the 
safety piece.
    Mr. Davis. Are there any other facilities in this country 
where the uranium process that is being done at Y-12 can be 
done today, that you know of?
    Mr. D'Agostino. Well, the country does have other uranium 
capabilities. It has downblending capabilities and the like. 
But working with highly enriched uranium, that is the purview 
of the U.S. Government and the NNSA's job. So we end up 
providing feedstock material to organizations that downblend; 
and that does pass through Y-12 as well. It is part of the 
nonproliferation piece of it as well.
    Mr. Davis. Let me ask you something else. My wife is often 
looking at the kitchen saying, that we need to redo the 
kitchen. She is going through constantly, finding things that 
we need to do.
    How many times have you or anyone on this panel visited the 
building at 9212 to analyze what needs to be done? Have you 
visited there, Mr. Beckner?
    Mr. Beckner. I have been there.
    Mr. Davis. How many times have you been there and when was 
the last time?
    Mr. Beckner. I have been gone from NNSA for 4 years, and it 
was probably a year or two before that, the last time I was 
there.
    Mr. Davis. Was that the only visit?
    Mr. Beckner. No, I have been there several times. I 
wouldn't care to guess how many. It is not a dozen, but it is 
more than one.
    Mr. Davis. You are very familiar with the building?
    Mr. Beckner. Pretty familiar. It was one of my nightmares 
for a while.
    Mr. Davis. Mr. Chairman, I will yield back on the second 
round possibility.
    Mr. Visclosky. Mr. Calvert.
    Mr. Calvert. Thank you, Mr. Chairman.
    Administrator, the Lawrence Livermore, the inventory 
efforts are highly leveraged with its pit manufacturing, its 
R&D capability activities. Do you plan to sustain funding 
levels for Lawrence Livermore's pit manufacturing R&D to 
maintain core competency and ensure no disruption to the 
inventory effort?
    Mr. D'Agostino. As we deinventory and take nuclear material 
out of Lawrence Livermore--and we are doing that because of 
financial concerns as well as some safety concerns for the 
community--we plan on maintaining that capability. And then, 
ultimately, we are working with--Lawrence Livermore and Los 
Alamos are working together to transition the Livermore 
capability into--there is a building in Los Alamos called 
Plutonium Facility 4, or PF-4, to transition it there.
    So, yes, sir, we do plan on maintaining a Livermore 
capability to work with plutonium.
    Mr. Calvert. One of the questions, too--and I talk about 
the workforce, both the workforce at Lawrence Livermore and Los 
Alamos--is there some concern with all of you about the 
workforce?
    I have heard comments about the aging of the workforce in 
the past. Do you feel that there are competent replacements 
coming up through the process to work for our purpose in the 
future?
    That is for everyone.
    Mr. D'Agostino. I will start, and I am sure--I know others 
have been talking to people, so I am very concerned about it. 
It could end up being, you know, very frankly, my number one 
concern.
    This is not a problem that is going to fall apart tomorrow 
or next year, but it is one where it is very difficult to turn 
a workforce around. So I am concerned about the long-term 
scientific and technology capability. I will give an example 
that might help explain.
    Radioanalytic chemistry is a skill that we used to exercise 
a lot back in the days of pre-1992, when we were underground 
testing. Radioanalytic chemists were the people who would go 
off and sample the material and determine how the test was. But 
it happens to be incredibly important to do nuclear forensic 
work, which the Nation thinks is going to be important in the 
future. But those radioanalytic chemists are few and far 
between. We are starting, and hopefully not too late, to try to 
bring people into that field.
    Admiral Chiles recently completed a study last year that 
summarizes his view of critical skills in nuclear security for 
the Nation and points that one particular piece out. Maybe 
others here at table could add to that or their views.
    Mr. Calvert. Any other comments on that?
    Mr. Coyle.
    Mr. Coyle. I am retired from Lawrence Livermore, but 
talking with people who still work there, I think the concern 
you raise is important to them. I think--I think they worry 
about how to sustain the skills that are needed going forward 
into the future.
    I agree with the comments that other witnesses have made 
today about the importance of good people. It should go without 
saying, but I certainly agree with it.
    But I think Dr. Beckner made an important suggestion when 
he said it would be good to look at bureaucratic rules and 
regulations. I think that one of the issues which is 
discouraging for the employees is what they see as bureaucratic 
rules and regulations that are either duplicative or 
unnecessary or going overboard. It is hard to say these kinds 
of things without sounding like you want the operations to be 
unsafe, which of course nobody does.
    Mr. Calvert. I guess one concern I have Mr. Frelinghuysen 
brought up: If we bring down our capacity to a certain level 
and for some reason, unbeknownst to us right now, we have to 
increase that capacity, how quickly can you bring in a trained 
workforce to do that?
    Does anybody have any comment on that?
    Mr. D'Agostino. I would say very slowly, actually.
    Mr. Calvert. Do you take that into account as we make these 
decisions down the road?
    Mr. D'Agostino. As a matter of fact that is--the answer is 
``yes.'' That is why we have asked for these critical skills 
studies--Admiral Chiles did a study about 10 years ago--and 
take a look at trends. We did another one just last year to 
look at, are we heading in the right direction?
    Some things we have fixed; some things we have not. But we 
are getting down into the small business numbers of people that 
are needed to maintain our--and quite frankly, the flexibility 
part is going to be challenging.
    The other piece I would say to that is, as a part of our 
life-extension program work that we are doing, we explicitly 
and our lab directors explicitly look to pair up folks that 
have experience with younger team groups of people to provide 
that cross-fertilization, to bring up the younger folks.
    But it takes real work in the end in order to exercise the 
workforce.
    Mr. Calvert. And lastly, on the issue of NIF--Dr. Becker 
brought up NIF--as I understand, all 192 lasers were 
successfully targeted and we broke an energy barrier that was 
quite extraordinary. But are there enough resources there--we 
spent quite a bit of money building that apparatus--to operate 
it efficiently?
    Mr. Beckner. I would say the number is bigger than a 
little. It is very expensive to operate, which is why I was 
looking for some other customers to get on board. You are going 
to need help keeping that facility running because of the 
operating costs. You aren't going to know for a number of years 
just how valuable it is going to be. There is very high 
expectation.
    So I believe it is an example of NNSA putting a lot of good 
money into a good project, and now you need to capitalize on 
it. And you are going to have to look for some other customers, 
I think, to help pay for it. Or at least it would surely help 
NNSA if you could find some other customers to help pay for 
that.
    That is probably the best example right now of a one-of-a-
kind facility that NNSA has brought forward that I think they 
can be very proud of.
    Mr. Calvert. Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Pastor.
    Mr. Pastor. Mr. Chairman, now in this new era of 
bipartisanship, I will yield my 5 minutes to my good friend Mr. 
Wamp.
    Dr. Beckner persuaded me that I have to wait until December 
to finally worry about this, so----
    Mr. Wamp. Wow, I thank the gentleman for the time. I will 
try not to talk about just UPF. I have one more question; it is 
obvious to me, but I want to make sure everyone else 
understands.
    We just spent several hundred million dollars building the 
HEUMF, which is the storage facility. It is finished. Even if 
UPF was downsized and built, wouldn't it need to be at the same 
site as the HEUMF because, otherwise, you would have to build 
another HEUMF where you built the UPF?
    Mr. D'Agostino, you have to have the storage facility next 
to the production facility?
    Mr. D'Agostino. It is always better to have your material 
located, very closely located to where you are going to operate 
it. So I think from that standpoint, yes.
    Mr. Wamp. And I want to say that the nonproliferation focus 
is a very, very, very important focus. I mean, I understand 
that. And Chet Edwards and others have been great leaders here 
for a long, long time there.
    But I would also say this: There is not a time in my now 14 
and 3 months' service here--14 years--that we haven't found 
materials of a nuclear nature somewhere in the world that 
someone from Oak Ridge wasn't dispatched to go and handle 
that--not a time that I know of.
    And I know of all the projects; I have been briefed by all 
of them. And this capability that must be maintained is 
critical to nonproliferation--not just production, not just 
stewardship, not just maintenance and reliability, but 
nonproliferation globally. Either we have the experts or 
somebody else does; and I sure don't want to trust the 
``somebody else does,'' and that comes with this piece.
    That is exhortation; I thought I would throw it in there.
    One thing, Dr. Beckner. You talked about the declining 
budgets. I want to point out that is--respectfully, in a 
bipartisan way, because it was the Bush administration and now 
the Obama administration--that was just the budget of this 
particular area. Budgets of other programs sure didn't get 
squeezed. We are spending $6.5 billion on weatherization; that 
is 31 times more than we have ever spent in any single year on 
weatherizing homes. I am all for it, but that is a 31 times 
increase, $6.5 billion for weatherization.
    But we are going to squeeze our nuclear weapons capability 
and our stewardship and our stockpile and the reliability and 
bring these things into question of whether or not we are doing 
this with a 60-year-old legacy doing it in a safe and modern 
way.
    That is a question. That is a big question. That is why 
this hearing, to me, is the most important hearing this 
committee is going to have this year.
    But the one thing I do want to know--and I find that it is 
fascinating, Dr. Garwin has been around here longer than any 
one of our witnesses, and he is the one reading off of a 
laptop; all of you all are reading off of paper.
    My note has ``genius'' by his name. That ought to tell you 
something. It says, ``Dr. Garwin, genius.''
    One of you'all mentioned the administration's retreat from 
the CMRR at some level. Can you explain that to Mr. Simpson and 
me, exactly? Like here, I think there is consensus developed 
that UPF is necessary, but it might need to be streamlined 
somewhat. That is what I am feeling; you have got to do it, but 
let's try to streamline it to save some money.
    What is the future of CMRR? And can it be streamlined? We 
haven't focused enough on that.
    Dr. Beckner you are first.
    Mr. Beckner. I would apply the same criteria to CMRR. I 
think we are realizing, as time goes on, that if we work harder 
at restricting our ambitions, we can keep these things a little 
bit smaller than they might otherwise become.
    And so, at any of these major facilities, I think we have 
to apply the same criteria; and that is, are you sure you need 
everything that you have got in there? And are you sure that 
you can bring it in on budget, just by the way? Because it has 
turned out to be extraordinarily difficult to do that with 
nuclear facilities. The record is very poor.
    Mr. Wamp. Well, but the administrator also said we learned 
some lessons along the way; and my experience is, when you have 
great turnover is when the lessons get blown out the window. 
And I would encourage, no matter what your ideological 
perspective or partisan flavor, not to have any more turnover 
than is necessary in this continuum going forward with this new 
posture review, because turnover is a killer for efficiency.
    Dr. Garwin, have you something to say? Your hand is up very 
politely.
    Mr. Garwin. On the CMRR, there are two aspects to that. 
There is the research laboratory, which is pretty well 
constructed, and then the nuclear facility.
    And I would suggest that one look at doing without the 
nuclear facility that is requiring further upgrades to the PF-
4, plutonium facility, at TA-55 at Los Alamos; but a real 
rethink, if we are not making new design pits, what can be done 
in the research laboratory upgrade building without the big 
expenditure on the NF.
    We might be able to put that off if we look at that 
specifically.
    Mr. Wamp. Mr. Administrator, response, rebuttal?
    Mr. D'Agostino. I will, and then maybe the chairman.
    What I would say is, the other thing that is a killer 
typical on large projects is design changes that come in. The 
radiation laboratory is almost completed with its construction. 
So we--there are some huge nuclear safety impacts associated 
with trying to bring that capability into the radiological 
laboratory.
    The other piece, just to clarify for the committee, we are 
not building pits in the CMR nuclear facility. The thing I want 
to do is actually reduce the amount of plutonium capability in 
the country by shutting down the plutonium capability at 
Lawrence Livermore and bringing it to Los Alamos into a much 
smaller size; and that is what the chart that you have in front 
of you shows.
    So I do think there are opportunities to look at the CMR 
nuclear facility project very hard, to look to drive out the 
kinds of things that Dr. Beckner talked about. That is 
something we are continuing to look at; and we are very early 
on in the nuclear facility design, and we are very conscious of 
our cash flow problems.
    Mr. Visclosky. Administrator, I would point out in follow-
up to that--because we will have a series of votes, I want to 
recognize Mr. Fattah--numbers 14, 15 and 16 for the record bear 
on that issue, and we attach a lot of importance to those.
    Mr. Fattah.
    Mr. Fattah. Thank you, Mr. Chairman.
    First, Dr. Garwin, the plutonium facility, that is about 35 
years old? The present?
    Mr. Garwin. No, no. I think the TA-55 has been continually 
modernized.
    Mr. Fattah. But you are suggesting that we put on hold the 
nuclear for redesign, but proceed with the plutonium, right?
    Mr. Garwin. Well, there is some confusion. The plutonium 
facility, No. 4, as I understand it, refers to the TA-55 site.
    Mr. Fattah. Right.
    Mr. Garwin. And I think that is good. We should see maybe 
how much that could be expanded further, which is typically 
less costly than having a new facility connected by tunnel to 
it.
    So I haven't made a conclusion here. It is just, I think--
with Mr. D'Agostino--that is worth a hard look.
    Mr. Fattah. I haven't made a conclusion yet either. I 
thought I was with my friend, Mr. Wamp, on the UPF until he 
started attacking the weatherization program.
    I was certain that I was for it. I was certain that he was 
right, given the storage facility being done and everything 
else.
    Now, if he was attacking, you know, us being--spending 
billions a week in Iraq or some other kinds of spending, he 
could have kept me on board. But when he said somehow those 
people who are in these cold weather States like my State, 
Pennsylvania, and other places, that weatherization investment 
somehow wasn't a worthwhile thing, he kind of lost my 
enthusiasm.
    But I do want to ask about this human capital issue in 
terms of the long-term personnel needs. I think we know this, 
but if you could just give us a general sense of who you are 
competing with for talent at this point.
    Mr. D'Agostino. Well, we expect, most likely, potentially 
to be competing with the civil nuclear power industry--I mean, 
as there is an expectation that is going to build up a little 
bit.
    There is a little bit of competition, frankly, with the 
Navy, but we have a good competition there because we end up 
using some of the Navy capabilities, the naval nuclear 
propulsion people. That is more symbiotic. We help each other 
out in that area, and the competition is kind of in our minds.
    A lot of people look at the work that we are doing as, 
well, this is all about nuclear weapons work and therefore 
nuclear weapons is passe; I don't care about that, so I don't 
want to go work in that area.
    And quite frankly our focus is to talk about nuclear 
security. In fact, that is why Congress, in its wisdom, called 
us the National Nuclear Security Administration; it is not the 
National Nuclear Weapons Administration. So I have to get 
people to think about nuclear security being nonproliferation, 
forensics, intelligence analysis, incident response. The 
country is going to need that well out into the future, and 
there is a good career there.
    Mr. Fattah. If we surveyed American universities today and 
the terminal degrees in the hard sciences, we would find a 
dearth of native-born Americans pursuing these degrees, right?
    Mr. D'Agostino. Yes, technical degrees.
    Mr. Fattah. Do you have a long-term game plan or do you 
have studies being done to figure out what you are going to 
need as the baby boomers retire and in the outyears? Because if 
we invest billions on these facilities, but we don't have the 
people, you know, we are going to be in a tough place.
    Mr. D'Agostino. Yes, sir. We have a two-pronged game plan, 
one dealing with the contractor workforce and one dealing with 
the Federal workforce.
    On the Federal side we have gone out actively within the 
program direction account--one of the four accounts that you 
appropriate, sir--to go forth with a science, technology, and 
engineering program, going out to a variety of different 
institutions to bring people into the Federal workforce that 
are technically trained that don't typically get that kind of 
support.
    On our contractor side, we have asked our laboratory 
directors--they have their own education and university 
programs to bring people in from that standpoint. We use these 
studies, like the Chiles Commission study, to inform ourselves 
of the status of our workforce.
    Mr. Fattah. Mr. Chairman, I want the administrator to know 
that I am very interested in working on this area with you; and 
I would be very interested to be briefed in a little more 
detail and perhaps find some way to be helpful.
    Dr. Garwin, you wanted to add a point.
    Mr. Garwin. I emphasized human capital in my testimony as 
well.
    Mr. Fattah. I saw that.
    Mr. Garwin. I have had a lot of experience with the 
laboratories and worked really a lot over the last years on 
nuclear weapons matters and nuclear security--not motivated by 
the money, but by trying to do something for my country. And I 
know that there are a lot of people out there who would do the 
same.
    Now, we have eliminated some of the competition because the 
high-paying jobs on Wall Street for quantitative people have 
been eliminated. That doesn't mean we can convert them, but we 
can have people who are interested in reality, who are 
interested in doing a good job. They may not be identifiably 
the very best people, but they are very good people and I am 
sure we can motivate them.
    The Federal problem is greater, really, than the laboratory 
problem because of the constraints on Federal work, on having 
intellectual reward, being able to do something. The laboratory 
work is not so great either in recent years, because laboratory 
brains have been sacrificed for increased fees--and there is 
micromanagement from Washington--and we need to address those.
    Mr. Fattah. I want to thank you. And again, I am very 
interested in trying to help us think through how we might 
proceed.
    And I want to yield the remaining time I may have to 
Congressman Wamp to see whether he wants to rephrase his 
concern about weatherization.
    Mr. Visclosky. Given the fact that Mr. Simpson has not yet 
participated, we will now recognize Mr. Simpson.
    Mr. Simpson. I haven't participated for a good reason. I 
would like to yield my time to Congressman Wamp.
    No.
    Mr. Visclosky. We have to go now.
    Mr. Simpson. It is--I think Congressman Wamp is right. This 
is probably a pretty important hearing, but I am fairly 
frustrated by it in spite of the fact, Mr. Chairman, that I 
think it is a wonderful hearing.
    I am frustrated because for the last couple of years--and 
here again, I feel like I am out here trying to design a mode 
of transportation not knowing what I want it to do. Whether I 
want it to fly in the air, go in the water, go over rocky roads 
and mountains, whether I want it to go on the interstate, or 
whether I want it to do all of these things.
    Until the customer tells us what it wants, how do we know 
what a complex is supposed to look like? And we are just making 
assumptions based on, we have to keep the stockpile that 
currently exists in good working order, some reliability there. 
But we really don't know what the stockpile of the future is 
going to look like until we get a report on--what do you call 
it? The Nuclear Posture report, right?
    Mr. D'Agostino. Right.
    Mr. Simpson. So it seems to me this hearing is a little 
premature until we get that in from the Department of Defense 
or whoever does that.
    Mr. D'Agostino. Could I offer a comment, sir?
    Mr. Simpson. Sure.
    Mr. D'Agostino. I actually do think we know what the 
stockpile of the future is going to look like. We have some 
sense.
    We know we can't throw a light switch and immediately 
change that stockpile of the future. We know that it will take 
us, depending on how the math works, on how many warheads the 
Nation is going to want to maintain and our capability to make 
those, that it could take anywhere from 10 to 50 years to make 
that type of a change.
    So we have a sense that the stockpile over the next zero to 
20 years, for example, will be probably reduced numbers of what 
we have now; and maybe at some future date we will bring in 
some warheads that are much safer and much more secure than the 
ones we have now.
    But--again, the general trend going down, but there will 
be--and President Obama has said this--a deterrent. And we do 
plan on maintaining it. So we do have some indications.
    There are plenty of options. The chairman talked about pit 
reuse and ways to be a bit more flexible so we don't build up 
excess capacity. Those need to be looked at. And, in fact, we 
are looking at those, and when they are done, we will report 
back to the committee.
    But I think for a period of time the stockpile over the 
next 20, 30 years or so is going to be a modification, probably 
pretty significant, of what we currently have.
    Mr. Simpson. You are talking the next 20 or 30 years.
    Is the Obama administration's idea of what the stockpile 
ought to look like the same as the Bush administration's?
    Mr. D'Agostino. It would be hard for me to answer that 
because we haven't done--we don't have all the political 
appointees in the positions yet, and we haven't had a chance to 
fully vet that out.
    Mr. Simpson. Guess how many administrations we will have 
over the next 30 years? We will have several. And that is one 
of the problems here, this strange--I mean, it is just the 
nature of our government. Every 4 years we change our policy 
and change our direction and change whatever we are doing.
    Now I understand they have halted work on the RRW. They 
have decided to close Yucca Mountain without knowing what the 
heck we are going to do. On and on and on. How do you ever have 
a program that is sustainable for the next 30 or 40 or 50 
years, knowing that every 4 years the philosophy is going to 
change?
    Mr. D'Agostino. Well, it is very difficult; there is no 
question about it.
    I think the key word is ``flexibility,'' don't overbuild 
what you need. But at same time there are certain realities. 
Fissile material, plutonium and uranium, that material is not 
likely going to--the uranium is not going to disappear. We have 
to be concerned about fissile material in this world, and we 
are going to likely be concerned about fissile material for the 
next 5, 6, 7, 8 decades.
    So in order to make sure that you can work with fissile 
material, you need to have this enterprise that we have been 
talking about there and be able to work on the nonproliferation 
aspects of it.
    And particularly as--a point I would like to make, as we 
reduce the size of the stockpile, the expected reduction in the 
size of the stockpile, that it becomes even more important that 
the workforce that you have there, make sure that they are 
current and up to speed and can challenge each other, have this 
independent technical review on that.
    Mr. Visclosky. Mr. Simpson, we have about a minute for a 
vote. We are down.
    Mr. Simpson. I only have 12 more questions. I am just 
kidding. We do have some we will submit.
    I will just--in fact, we can leave, but I would like to ask 
you. There has been some debate on the fate of the pit 
disassembly and conversion facility, and since I was down to 
Savannah River just last Friday, taking a tour of the facility, 
I understand the DOE is currently evaluating whether to combine 
the PDCF with its operations of the EM plutonium disposition 
process at Savannah River's K reactor.
    What is the status of that evaluation and when can we 
expect a report on that?
    Mr. D'Agostino. We are currently not only completing the 
design work for the PDCF facility as the primary alternative, 
but studying this combination, as you suggested; we think we 
will have the analysis on that work done by early summer. That 
is when it will come to me to evaluate and to do this analysis 
of alternatives to look at what is the best approach. And we 
plan on making sure that the committee staff--and we will work 
with the committee staff on that.
    So I think it will help inform the decisions that you may 
be making later on this year.
    Mr. Simpson. As Mr. Beckner said, sometimes these project 
comes in above cost. This is about 65 percent above cost. And I 
should point out that the last one that came in on cost was the 
SNF at Oak Ridge. I say this for my good friend Zach Wamp. On 
cost, under budget.
    Mr. Visclosky. Mr. Garwin, 30 seconds?
    Mr. Garwin. Yes, I used to chair the Naval Warfare Panel of 
the President's Science Advisory Committee, and you could 
predict the future Navy because the ships would last for 30 
years, so you could predict it 60 years in advance.
    But with nuclear weapons it is different. One thing that 
you can really do is reduce them rapidly. And it is possible 
that we will see a major reduction from the 6,000 or so to the 
1,000 range. As I indicated, that could have very substantial 
impact with rapid demilitarization, and I think PANTEX is a 
growth stock for storing the pits.
    Mr. Visclosky. I would close by making a couple of 
observations. We will probably be in subcommittee in June. And 
so we will have to be adroit and staying in touch. And I think 
in a number of questions and comments it was emphasized that 
there are some things, no matter what the future holds, we will 
have to do.
    The other thing I would point out--and I do think Mr. 
Simpson brought up a good point: This committee emphasized to 
the past administration and, I would emphasize, to the new 
administration that the strategy, the policy, really does have 
to be one that they anticipate, recognizing that the world 
changes every day, that future administrations that either 
party can live with, that future Congresses controlled by 
either party can live with, because you do look at the Cold 
War. And there was a policy, if you will, that was in place 
that succeeding administrations and Congresses felt there was 
consensus on; and we were, to the extent we were all here, 
successful in that.
    So I do think it is important, while philosophies and 
emphasis may change, it is important for the incoming 
administration to understand that whatever decisions they make, 
people in the future on a consistent basis are going to have to 
make. We can't with a complex like this bouncing around every 
couple of years.
    I really appreciate all of your participation, your 
contributions to this country, and your contribution to helping 
to educate us. And we would ask if we could stay in touch with 
you. That would be terrific.
    Anything else?
    We are adjourned. Thank you very much.

          

                                         Wednesday, April 22, 2009.

                            MEMBER REQUESTS

    Mr. Visclosky [presiding]. Good morning. We are here this 
morning to take testimony from members of the House on issues 
related to the Energy and Water Subcommittee's jurisdiction. I 
am happy to be here today to learn more about the challenges 
members are facing at home.
    It is my belief and hope that the testimony provided by 
members that have taken the time and trouble to be with us 
today to talk about their interests and the needs of their 
respective districts will assist our subcommittee in crafting a 
bill that is responsive both to the national needs and the 
needs of local communities. With these comments, I would like 
to yield to our ranking member, Mr. Frelinghuysen, for any 
opening comments he might have.
    Mr. Frelinghuysen. Mr. Chairman, I would like to thank you 
for providing this opportunity to our colleagues. And it is a 
pleasure to welcome Mr. Kanjorski here to this morning's 
hearing. Thank you.
    Mr. Visclosky. I would now like to recognize my classmate, 
Mr. Kanjorski, who has held up a lot better than I have over 
these intervening years.
                              ----------                              

                                         Wednesday, April 22, 2009.

                     11TH DISTRICT OF PENNSYLVANIA


                                WITNESS

HON. PAUL E. KANJORSKI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    PENNSYLVANIA
    Mr. Kanjorski. Thank you, Peter. Thank you for that 
compliment. No truth to it, but I still thank you for it.
    Gentlemen, I come because of three particular projects that 
are located in my congressional district, but I have actually 
requested six earmarks, if you will, three of which I won't 
talk to. The three I will are primary and most important.
    First and foremost is the Wyoming Valley Levee Raising 
Project. It is one of the oldest flood control projects east of 
the Mississippi. It really is the second or third project after 
a 1972 Agnes Flood along the Susquehanna River where, in the 
vicinity of the city of Wilkes-Barre, over $1 billion worth of 
damage occurred, and that would have been equivalent today of 
more than $4 billion in damage. And it uprooted 25,000 
residents from their homes and cost the loss of 60,000 jobs at 
the time of the flood.
    This project is now nearing completion, but unfortunately 
was not funded in the last year or two of appropriations, and 
as a result it has come to sort of a standstill. And what we 
are looking for is that it be reappropriated by the Congress, 
and I have written a letter to the Office of Management and 
Budget to insert the same in President Obama's 2010 budget.
    What we are requesting for this year is $12.64 million, and 
that will allow us the opportunity to move the project 
significantly on, but it still won't complete the project. 
There are a number of years of additional funding that is 
necessary.
    The second project I want to talk to you about is the 
Scranton Flood Control Project; that is along the Lackawanna 
River. And Scranton City is also in my district. It is the most 
populous city, and the Lackawanna River runs right through 
Scranton City.
    And what has come about here is that as a result of Katrina 
the standards have changed, and as a result many more 
additional costs are going to be incurred in order to complete 
the Lackawanna County Scranton City Flood Control Project, and 
what we are doing there is requesting $10.57 million to 
complete the work on that river in the year 1910.
    The last project that I am asking for consideration on is 
the Bloomsburg Flood Control Project. It is really just the 
beginning project needing money for design. It has been 
authorized in prior years, and we are requesting there $375,000 
to continue with the design of the flood control project in 
fiscal year 2010.
    This sounds like an awful lot of money, but I guess I would 
have to be honest and say my district is literally the flood 
district of Pennsylvania, and particularly of northeastern 
United States, because we seem to--after every rain of almost 
any sort, we get some impact, either in Scranton, Wilkes-Barre, 
or Bloomsburg. It is just a continuous thing.
    I apologize for it, but that is the reality. I got stuck 
with the lowlands, and as a result, for my 25 years in 
Congress, every year I have had to ask for appropriations of 
these sorts, and we have been running on it.
    But they are essential. They have saved a lot of lives, and 
numerous amounts of property, and these flood control projects 
allow us to pursue economic development. Without them, this 
area would really be totally devastated.
    So I ask the indulgence of the committee to go with us, 
continue, and with that I would like permission to insert my 
full statement into the record to cover the contingency of this 
testimony.
    [The information follows:]

          

    Mr. Visclosky. Without objection, so ordered. And certainly 
nothing to apologize about. And you do, I think, summarize very 
succinctly the reasons these projects are so necessary--one, to 
save lives, because if someone loses their life you can't 
return it to them or their family.
    In the first instance, to protect their property, but also 
to, hopefully, by removing them from flood plains, enhance the 
value of their property and enhance the surrounding properties 
for economic development, because many of these communities, I 
assume, also have been devastated because of the collapse of 
manufacturing in this country and need every chance that they 
have.
    Call just a couple--I mean, we are still waiting to get a 
list back from the Army Corps ourselves on the supplemental, 
and also waiting to get back because we still, as you know, do 
not yet have the administration's budget for 2010. 
Justifications and capabilities--have you had any 
communications with the Corps, and do you have any impression 
from those communications, if I could ask?
    Mr. Kanjorski. From the local Baltimore Corps, these are 
the indications of the monies they will need for this coming 
year. We have a letter out to OMB; we haven't, to my knowledge, 
received any confirmation whether this is going to be included 
or not in the President's budget.
    But if I may answer that with one other fact or two--and I 
know the committee has been wrestling with this--many years ago 
we had sufficient funds in here to do some of this work, and 
the Corps, like they did to a lot of members of Congress, 
requested that they didn't necessarily have to use those funds 
in those given years and asked the right to allocate them to 
other projects and say, ``Don't worry. We will reallocate them 
back when we need them.''
    Well, they haven't reallocated them back, and now they tell 
us they can't.
    Mr. Visclosky. Right.
    Mr. Kanjorski. And I don't sympathize with the fact that 
they can't, because I think that it is smart that we constrain 
what they can do with appropriated money. But as a result, many 
millions of dollars were actually lost that have been 
appropriated to this project that really went to other 
projects. So maybe this is a chance to make up that difference, 
whatever it is.
    But we are moving pretty close. We are at the last phase--
probably in the last 10 to 15 percent of the project costs. And 
in a way, particularly in the Wilkes-Barre project and in the 
Scranton project, it would be almost foolhardy for us not to 
finish it, because if a devastating flood came somewhat near 
Agnes, it would still spill over and do all the damage that the 
flood control project would protect when it is finished.
    I mean, the Wilkes-Barre project is a 350-year prevention 
project. And I have seen it prevent two floods in the last 4 
years that would have caused well in excess of $5 billion in 
damage, except for the presence of this flood control project.
    So I just throw that out for testimony, that, you know, if 
anyone raises a question of the success of flood control 
projects and whether they are worthwhile or not, there isn't 
anybody in northeastern Pennsylvania who couldn't happily 
testify just how successful and how important they are with our 
own personal experiences.
    Mr. Visclosky. All right.
    Mr. Frelinghuysen. Thank you for your testimony. I am a 
believer like you and the chairman.
    Members of Congress know their own districts, and certainly 
there has been an outflow due to Katrina and other crises, and 
we always hope that things will come back to our districts to 
address these longstanding problems. So certainly we are 
supportive and appreciate your being here.
    Mr. Kanjorski. I appreciate it, and I know with the 
experience of the Chairman and the Ranking Member of this 
committee all these years we will look for a positive response. 
Thank you.
    Mr. Visclosky. Thank you, Mr. Kanjorski.
    Ms. Watson.
                              ----------                              

                                         Wednesday, April 22, 2009.

                      33RD DISTRICT OF CALIFORNIA


                            WITNESS

HON. DIANE WATSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
    CALIFORNIA
    Ms. Watson. Mr. Chairman, Ranking Member, thank you for 
allowing me to testify before your subcommittee on my top three 
priorities for fiscal year 2010 appropriations requests for my 
33rd congressional district. And I sincerely hope that today's 
testimony will encourage the subcommittee to fund these worthy 
projects at their requested level.
    The first project submitted, which I would like to mention 
today, is the $3 million in continued federal funding for 
USC's--that is the University of Southern California--Methanol 
Economy Initiative. This program represents a pioneering 
research project with the potential to benefit the entire 
nation.
    The Methanol Economy Initiative at USC, under the 
leadership of Nobel Prize winning chemist, Professor George 
Olaf, is developing chemistry to produce and use methanol as a 
renewable source of energy that can decrease our dependence on 
fossil fuels while also reducing the concentration of 
atmospheric carbon dioxide. Chemically converting natural gas 
into methanol creates an excellent fuel for internal combustion 
engines and an even more efficient fuel in fuel cells.
    Methanol can also be converted to dimethylol ether as 
excellent diesel fuel and a cleaner substitute for natural gas 
in liquefied petroleum. Because it is a liquid at ambient 
temperatures, methanol can be readily stored and transported 
using existing infrastructure.
    In addition to serving as a renewable fuel, methanol can be 
used to replace petroleum as a starting material for the 
manufacturing of virtually all hydrocarbon projects such as 
plastics, pharmaceuticals, and other synthetic materials. This 
project also seeks to efficiently produce methanol by recycling 
carbon dioxide from the atmosphere.
    This innovative research would create a new process for 
recycling carbon dioxide into fuels and synthetic materials 
with the double impact of eliminating carbon dioxide from the 
atmosphere while simultaneously lessening our dependence on 
oil, gas, and coal. The work of the Methanol Economy Initiative 
will help the United States achieve its goal of a more 
sustainable and secure energy future.
    This research offers the promise of a renewable energy 
source that can be easily transported and stored for commercial 
use while also creating a new process for removing and reusing 
carbon dioxide from the atmosphere. The green future we seek 
will not come as a result of a single solution, but a 
combination of many paths of research and innovation coming 
together to reshape the way we live and fuel our lives.
    The Methanol Economy Initiative received similar funding in 
2008, 2009, and represents one of the many promising research 
projects that will help us realize a more sustainable and 
secure energy future.
    The second request submitted would grant $500,000 for the 
Solar Street Lighting Project in the city of Culver City, which 
I also represent. Culver City, in recent years, has become a 
pioneer in implementing green technology. The city's new Solar 
Street Lighting Project is the next step in making Culver City 
more environmentally benign.
    The solar street lights would complete LEED-certified 
buildings that would be developed in the city. The project aims 
to revitalize a portion of a main thoroughfare, Washington 
Boulevard, by drawing new commercial office and housing units 
to a green technology community.
    The project involves replacing 98 existing street lights 
with solar powered light-emitting diode units, or LED. The 
solar powered lights can use the bountiful California sunlight 
to reduce Culver City's utility bill by using solar energy to 
charge batteries.
    The LED bulbs last longer and are brighter than traditional 
bulbs, making them economically viable. These street lights do 
not use the grid electricity and, most importantly, can remain 
operational during power outages.
    And the third project I submitted would grant $1 million to 
the city of Los Angeles for the Street Lighting Fixture Energy 
Efficiency Retrofit Project. As part of an effort to make Los 
Angeles greener, cleaner, and healthier, the city of Los 
Angeles plans to replace 2,000 existing street lights in the 
33rd congressional district with light-emitting diodes, or the 
LED fixtures.
    The LED fixtures still consume a minimum of 40 percent less 
energy than the existing fixtures. Also, the LED fixtures have 
a lifespan of two to three times that of the existing fixtures 
and require less maintenance.
    The fixtures also produce a while light versus the yellow 
and orange light produced by existing fixtures. Typically, 
white light is preferred by communities and law enforcement 
agencies because it gives greater visibility and color 
rendition. These solid state fixtures also allow for better 
control of the light distribution, which can reduce light 
trespass and pollution.
    With the conversion to LED light fixtures, the city of Los 
Angeles would reduce carbon imprint in the environment by 
approximately 600 tons per year, and the city would save 
$143,000 in utility costs.
    And Mr. Chairman, I want to thank you and the ranking 
member for giving us this time before your committee, and I 
would hope that you would look in a positive way upon and 
consider these three top projects that we request for fiscal 
year 2010.
    [The information follows:]
    Mr. Visclosky. Ms. Watson, thank you very much for going to 
the trouble of appearing today and making the request, one from 
an energy perspective, saving your local community's dollars. 
And as you point out on the methanol research, the committee 
has found value in that, obviously, the last several years. And 
I say that as a Notre Dame grad, so obviously there has been a 
great deal of justification--talking about University of South 
Carolina there for a minute or not. We appreciate your hard 
work and diligence on behalf of your constituents.
    Ms. Watson. And I want you to know, I am a UCLA graduate, 
way across town; I represent USC. And I am proud of both 
universities, and particularly USC, for being so innovative.
    And we are using the expertise of our Nobel Peace Prize 
professor, and we are very, very pleased with the result that 
we are getting. This would be the third year of this 
initiative. Thank you very much for having this.
    Mr. Visclosky. You should be.
    Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you very much for your sunny 
California disposition as well as the primer on methanol. I was 
unaware of this initiative and appreciate your bringing it to 
the committee's attention. And good luck.
    Ms. Watson. Thank you.
    Mr. Frelinghuysen. Thank you very much.
    Ms. Watson. I appreciate your time.

          


                           W I T N E S S E S

                              ----------                              
                                                                   Page
Aloise, Eugene...................................................    51
Beckner, Everet..................................................   153
Breul, Jonathan..................................................    51
Coyle, Philip....................................................   153
D'Agostino, Thomas...............................................   153
Eggenberger, A.G.................................................   153
Garwin, Richard..................................................   153
Gordon, Hon. Bart................................................   294
Kanjorski, Hon. P.E..............................................   285
Kolb, Ingrid.....................................................    51
Lance, Hon. Leonard..............................................   296
Pallone, Hon. Frank..............................................   298
Van Antwerp, Lieutenant General Robert...........................     1
Watson, Hon. Diane...............................................   291