[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]







                      NSF MAJOR RESEARCH EQUIPMENT
                       AND FACILITIES MANAGEMENT:
           ENSURING FISCAL RESPONSIBILITY AND ACCOUNTABILITY

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

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON RESEARCH AND SCIENCE EDUCATION

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                        THURSDAY, MARCH 8, 2012

                               __________

                           Serial No. 112-69

                               __________

 Printed for the use of the Committee on Science, Space, and Technology




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       Available via the World Wide Web: http://science.house.gov

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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                    HON. RALPH M. HALL, Texas, Chair
F. JAMES SENSENBRENNER, JR.,         EDDIE BERNICE JOHNSON, Texas
    Wisconsin                        JERRY F. COSTELLO, Illinois
LAMAR S. SMITH, Texas                LYNN C. WOOLSEY, California
DANA ROHRABACHER, California         ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland         BRAD MILLER, North Carolina
FRANK D. LUCAS, Oklahoma             DANIEL LIPINSKI, Illinois
JUDY BIGGERT, Illinois               DONNA F. EDWARDS, Maryland
W. TODD AKIN, Missouri               MARCIA L. FUDGE, Ohio
RANDY NEUGEBAUER, Texas              BEN R. LUJAN, New Mexico
MICHAEL T. McCAUL, Texas             PAUL D. TONKO, New York
PAUL C. BROUN, Georgia               JERRY McNERNEY, California
SANDY ADAMS, Florida                 JOHN P. SARBANES, Maryland
BENJAMIN QUAYLE, Arizona             TERRI A. SEWELL, Alabama
CHARLES J. ``CHUCK'' FLEISCHMANN,    FREDERICA S. WILSON, Florida
    Tennessee                        HANSEN CLARKE, Michigan
E. SCOTT RIGELL, Virginia            SUZANNE BONAMICI, Oregon
STEVEN M. PALAZZO, Mississippi       VACANCY
MO BROOKS, Alabama
ANDY HARRIS, Maryland
RANDY HULTGREN, Illinois
CHIP CRAVAACK, Minnesota
LARRY BUCSHON, Indiana
DAN BENISHEK, Michigan
VACANCY
                                 ------                                

             Subcommittee on Research and Science Education

                     HON. MO BROOKS, Alabama, Chair
ROSCOE G. BARTLETT, Maryland         DANIEL LIPINSKI, Illinois
BENJAMIN QUAYLE, Arizona             HANSEN CLARKE, Michigan
STEVEN M. PALAZZO, Mississippi       PAUL D. TONKO, New York
ANDY HARRIS, Maryland                JOHN P. SARBANES, Maryland
RANDY HULTGREN, Illinois             TERRI A. SEWELL, Alabama
LARRY BUCSHON, Indiana                   
DAN BENISHEK, Michigan                   
RALPH M. HALL, Texas                 EDDIE BERNICE JOHNSON, Texas













                            C O N T E N T S

                        Thursday, March 8, 2012

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Mo Brooks, Chairman, Subcommittee on 
  Research and Science Education, Committee on Science, Space, 
  and Technology, U.S. House of Representatives..................    17
    Written Statement............................................    18

Statement by Representative Daniel Lipinski, Ranking Minority 
  Member, Subcommittee on Research and Science Education, 
  Committee on Science, Space, and Technology, U.S. House of 
  Representatives................................................    18
    Written Statement............................................    20

                               Witnesses:

Dr. Cora Marrett, Deputy Director, National Science Foundation
    Oral Statement...............................................    22
    Written Statement............................................    24

Dr. Jose-Marie Griffiths, Chairman, Subcommittee on Facilities, 
  National Science Board; Vice President of Academic Affairs, 
  Bryant University
    Oral Statement...............................................    34
    Written Statement............................................    36

Mr. James H. Yeck, IceCube Project Director, University of 
  Wisconsin-Madison
    Oral Statement...............................................    43
    Written Statement............................................    45

Dr. Tony Beasley, COO/Project Manager, Neon, Inc.
    Oral Statement...............................................    58
    Written Statement............................................    60

Dr. Tim Cowles, Vice President and Director, Ocean Observing, 
  Consortium for Ocean Leadership
    Oral Statement...............................................    67
    Written Statement............................................    69

             Appendix I: Answers to Post-Hearing Questions

Dr. Cora Marrett, Deputy Director, National Science Foundation...    88

Dr. Jose-Marie Griffiths, Chairman, Subcommittee on Facilities, 
  National Science Board; Vice President of Academic Affairs, 
  Bryant University..............................................    98

Mr. James H. Yeck, IceCube Project Director, University of 
  Wisconsin-Madison..............................................   102

Dr. Tony Beasley, COO/Project Manager, Neon, Inc.................   103

Dr. Tim Cowles, Vice President and Director, Ocean Observing, 
  Consortium for Ocean Leadership................................   104

            Appendix II: Additional Material for the Record

Dr. Cora Marrett, Deputy Director, National Science Foundation...   106

 
                    NSF MAJOR RESEARCH EQUIPMENT AND
                         FACILITIES MANAGEMENT:
                     ENSURING FISCAL RESPONSIBILITY
                           AND ACCOUNTABILITY

                              ----------                              


                        THURSDAY, MARCH 8, 2012

                  House of Representatives,
    Subcommittee on Research and Science Education,
               Committee on Science, Space, and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Mo Brooks 
[Chairman of the Subcommittee] presiding.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman Brooks. The Subcommittee on Research and Science 
Education will come to order.
    Welcome to today's hearing entitled ``NSF Major Research 
Equipment and Facilities Management: Ensuring Fiscal 
Responsibility and Accountability.'' The purpose of today's 
hearing is to examine the management and operations of major 
research equipment and facilities' construction--MREFC is the 
acronym--projects at the National Science Foundation. I now 
recognize myself for five minutes for an opening statement.
    I am pleased to welcome all of our witnesses to discuss the 
oversight of NSF's major research equipment and facilities 
management from basic concept design through post-construction 
operations and maintenance. I look to my colleague, Mr. 
Lipinski, and my fellow Subcommittee members on both sides of 
the aisle to work with me to continue to ensure the 
Subcommittee performs its legislative, oversight, and 
investigative duties with due diligence on matters within its 
jurisdiction throughout the 112th Congress and appreciate their 
valued experience and insights.
    Investments in various multi-user research facilities such 
as vessels, astronomical observatories, particle accelerators, 
the United States Antarctic stations, seismic observatories, 
and many others comprise approximately 15 percent of NSF's 
portfolio. Additional components of the infrastructure 
portfolio include large datasets based on NSF-supported 
surveys, the provision of shared-use equipment for academic 
researchers, and interdisciplinary centers.
    Under the Major Research Equipment and Facilities 
Construction (MREFC) account, large multi-year projects are 
funded that would be too expensive for a specific Directorate 
to take up on its own. MREFC projects focus solely on the 
construction of major equipment and facilities. The science 
driving the projects and the operations and maintenance once 
construction is completed are funded through separate NSF 
budget accounts.
    Over the past ten years, NSF has worked to establish and 
refine the practices for launching new MREFC projects, 
overseeing construction, and the transition to managing the 
operations and maintenance of the equipment and facilities. 
These practices have lead to greater involvement by the 
National Science Board and a clear understanding of how MREFC 
projects are prioritized in difficult economic times. While 
these major equipment and facilities support NSF's larger goal 
of ensuring the United States maintains its competitive edge in 
science by promoting global leadership in advancing research, 
education, and innovation, it is imperative that appropriate 
oversight be executed to guarantee the greatest return on 
taxpayer investments.
    I have said this before and will echo the sentiment again 
today--America faces unsustainable budget deficits that 
constitute our greatest economic and national security threat. 
This leaves absolutely no room for government waste, even 
within America's most prized programs and facilities. I look 
forward to learning more about what I, and my colleagues on the 
Research and Science Education Committee, can do to pave a more 
responsible path for America's future by way of supporting 
these important endeavors.
    The Chair now recognizes Mr. Lipinski from the great State 
of Illinois for an opening statement.
    [The prepared statement of Mr. Brooks follows:]

                Prepared Statement of Chairman Mo Brooks
    Good morning and welcome. I am pleased to welcome all of our 
witnesses to discuss the oversight of NSF's major research equipment 
and facilities management from basic concept design through post-
construction operations and maintenance.
    I look to my colleague, Mr. Lipinski, and my fellow Subcommittee 
Members on both sides of the aisle to work with me to continue to 
ensure the Subcommittee performs its legislative, oversight, and 
investigative duties with due diligence on matters within its 
jurisdiction throughout the 112th Congress and appreciate their valued 
experience and insights.
    Investments in various multi-user research facilities such as 
vessels, astronomical observatories, particle accelerators, the U.S. 
Antarctic stations, seismic observatories, and many others comprise 
approximately 15 percent of NSF's portfolio. Additional components of 
the infrastructure portfolio include large datasets based on NSF-
supported surveys, the provision of shared-use equipment for academic 
researchers, and interdisciplinary centers.
    Under the Major Research Equipment and Facilities Construction 
(MREFC) account, large multi-year projects are funded that would be too 
expensive for a specific Directorate to take up on its own. MREFC 
projects focus solely on the construction of major equipment and 
facilities. The science driving the projects and the operations and 
maintenance once construction is completed are funded from separate NSF 
budget accounts.
    Over the last ten years NSF has worked to establish and refine the 
practices for launching new MREFC projects, overseeing construction, 
and the transition to managing the operations and maintenance of the 
equipment and facilities. These practices have lead to greater 
involvement by the National Science Board and a clear understanding of 
how MREFC projects are prioritized in difficult economic times.
    While these major equipment and facilities support NSF's larger 
goal of ensuring the United States maintains its competitive edge in 
science by promoting global leadership in advancing research, education 
and innovation, it is imperative that appropriate oversight be executed 
to guarantee the greatest return on taxpayer investments.
    I have said this before and will echo the sentiment again today--
America faces unsustainable budget deficits that constitute our 
greatest economic and national security threat. This leaves absolutely 
no room for government waste--even within America's most prized 
programs and facilities. I look forward to learning more about what I, 
and my colleagues on the Research and Science Education Subcommittee, 
can do to pave a more responsible path for America's future by way of 
supporting these important endeavors.

    Mr. Lipinski. Thank you, Chairman Brooks. Thank you for 
holding this hearing today.
    Ten years is probably too long a period between hearings on 
the important topic of how NSF manages and oversees its large 
facilities over their full life cycle, especially given the 
many changes of the MREFC process in that time. So I am pleased 
that we are having this hearing this morning and grateful to 
witnesses who are taking the time to help us understand where 
we stand with MREFC and what oversight issues remain.
    When I was Subcommittee Chair in the last Congress, we held 
a hearing on the role of NSF in supporting university research 
infrastructure. That was a somewhat different topic but still 
part of the larger question of how we balance support for 
research infrastructure with support for research grants. 
Remaining a global leader in scientific R&D requires more than 
intellectual freedom in grant funding. Cutting edge research 
requires state-of-the-art research facilities and we can no 
longer take it for granted that the best scientists want to 
live and work in the United States.
    In a 2003 report on science and engineering infrastructure, 
the National Science Board recommended that the share of the 
NSF budget dedicated to research infrastructure should fall in 
the range of 22 to 27 percent but closer to the high end of 
that range. While I am pleased that the fiscal year 2013 budget 
request restores funding to MREFC projects after several years 
of cuts as a percentage of the budget, funding for it still 
remains at the bottom end of that range. This can at least in 
part be explained by the blip in ARRA funding in 2009 that 
reduced pressure on out-year budgets for MREFC and the fact 
that there is no new proposals for fiscal year 2013. However, 
this remains an area of concern for me and one I will continue 
to closely--follow closely in my leadership role on this 
Subcommittee.
    Returning to the specific topic of this hearing, major 
research facilities management, there are a couple of issues I 
am hoping to learn more about. First, I would like to 
understand how MREFC policies have evolved in the last few 
years, including the role of the National Science Board and 
what instigated these changes. In particular, I would like to 
know what we have learned from the Deep Underground Science and 
Engineering Laboratory, or DUSEL. While I believe that the 
December 2010 decision by the Board with respect to DUSEL was 
probably right--was the right one for the foundation, letting 
the project advance as far as it did before terminating it was 
certainly harmful and wasteful. So I would like to know what 
policies have been put in place since then to avoid a repeat of 
the situation.
    Second, I would like to address the ongoing dispute between 
the Inspector General and NSF management with respect to 
contingency funds. I will begin by saying that I am comfortable 
with the definition NSF is using for contingency funds and it 
appears to be consistent with the private sector standard for 
project management and with practices at other agencies. As 
someone trained in systems engineering, I also think that 
calculating a contingency total based on the ensemble mean of 
all foreseeable risks across all aspects of a project and 
incorporating that into the total project cost is the right 
approach. But the IG has raised important questions regarding 
whether there are sufficient controls over draw-downs from the 
contingency fund and whether the funds should be held at the 
Agency or with the project.
    I think there are good arguments on both sides of this 
issue, and I worry also that the projects currently underway 
are caught in this dispute between the IG and NSF management. I 
would like to hear how the IG and NSF are working to resolve 
their differences.
    Finally, as stewards of taxpayer money, it is incumbent 
upon us to ask whether it is appropriate that any funds left 
over due to outstanding management or just plain luck should be 
returned to the NSF where re-scoping of that particular project 
can be balanced against other agency priorities. I know that 
NSF and Mr. Yeck are proud of how the IceCube Project came in 
under budget and rightly so. Mr. Yeck, from everything I know, 
from what you did, you did an exemplary job with the project 
under extraordinary conditions. I would like to learn more 
about what IceCube was able to accomplish with those leftover 
funds, but also ask the broader question of whether this is the 
most appropriate use of NSF dollars given that the most 
important science was already prioritized in the original scope 
and design of IceCube.
    Now, I don't have answers to these questions, and I hope 
our witnesses will share their insights. But I do think it is 
critical that we align incentives with prudent project 
management and outcomes that are most appropriate in terms of 
both the science and the budget. Overall, I am very pleased 
with how far the Agency has come in the last few years in 
strengthening management and oversight of its large facilities 
and I look forward to using this hearing to explore where 
issues may remain and what the best way is to move forward.
    And I yield back.
    [The prepared statement of Mr. Lipinski follows:]

          Prepared Statement of Ranking Member Daniel Lipinski
    Thank you Chairman Brooks. Ten years is probably too long a period 
between hearings on the important topic of how NSF manages and oversees 
its large facilities over their full lifecycle, especially given the 
many changes in the MREFC process in that time. So I am pleased we are 
having this hearing this morning and grateful to the witnesses who are 
taking the time to help us understand where we stand with MREFC and 
what oversight issues remain.
    When I was subcommittee chair in the last Congress, we held a 
hearing on the role of NSF in supporting university research 
infrastructure. That was a somewhat different topic, but still part of 
the larger question of how we balance support for research 
infrastructure with support for research grants. Remaining a global 
leader in scientific R&D requires more than intellectual freedom and 
grant funding. Cutting edge research requires state-of-the-art research 
facilities, and we can no longer take it for granted that the best 
scientists want to live and work in the United States.
    In a 2003 report on science and engineering infrastructure, the 
National Science Board recommended that the share of the NSF budget 
dedicated to research infrastructure should fall in the range of 22-27 
percent, but closer to the high-end of that range. While I am pleased 
that the FY 2013 budget request restores funding to MREFC projects 
after several years of cuts, as a percentage of the budget, funding for 
facilities remains at the bottom end of that range. This can at least 
in part be explained by the blip in ARRA funding in 2009 that reduced 
pressure on outyear budgets for MREFC, and the fact that there is no 
new-start proposed for FY 2013. However, this remains an area of 
concern for me and one I will continue to follow closely in my 
leadership role on this subcommittee.
    Returning to the specific topic of this hearing, major research 
facilities management, there are a couple of issues I'm hoping to learn 
more about.
    First, I'd like to understand how MREFC policies have evolved in 
the last few years, including the role of the National Science Board, 
and what instigated these changes. In particular, I would like to know 
what we learned from the Deep Underground Science and Engineering 
Laboratory, or DUSEL. While I believe that the December 2010 decision 
by the Board with respect to DUSEL was probably the right one for the 
Foundation, letting the project advance as far is it did before 
terminating it was harmful and wasteful. So I'd like to know what 
policies have been put in place since then avoid a repeat of this 
situation.
    Second, I'd like to address the ongoing dispute between the 
Inspector General and NSF management with respect to contingency funds. 
I'll begin by saying that I'm comfortable with the definition NSF is 
using for contingency funds, as it appears to be consistent with the 
private sector standard for project management and with practices at 
other agencies. As someone trained in systems engineering, I also think 
that calculating a contingency total based on the ensemble mean of all 
forseeable risks across all aspects of a project and incorporating that 
into the total project cost is the right approach.
    But the IG has raised important questions regarding whether there 
are sufficient controls over drawdowns from the contingency fund and 
whether the fund should be held at the agency or with the project. I 
think there are good arguments on both sides of this issue, and I worry 
also that the projects currently underway are caught in this dispute 
between the IG and NSF management. I would like to hear how the IG and 
the NSF are working to resolve their differences.
    Finally, as stewards of the taxpayer money, it is incumbent upon us 
to ask whether it is appropriate that any funds left over due to 
outstanding management or just plain luck should be returned to NSF, 
where re-scoping of that particular project can be balanced against 
other agency priorities.
    I know that NSF and Mr. Yeck are proud of how the IceCube project 
came in under budget, and rightly so. Mr. Yeck, from everything I know 
you did an exemplary job with that project under extraordinary 
conditions. I'd like to learn more about what IceCube was able to 
accomplish with those ``leftover'' funds, but also ask the broader 
question of whether this is the most appropriate use of NSF dollars 
given that the most important science was already prioritized in the 
original scope and design of IceCube.
    While I don't have answers to these questions--and I hope our 
witnesses will share their insights --I do think it's critical that we 
align incentives with prudent project management and outcomes that are 
the most appropriate in terms of both the science and the budget.
    Overall, I am very pleased with how far the agency has come in the 
last few years in strengthening management and oversight of its large 
facilities, but I look forward to using this hearing to explore where 
issues may remain.

    Chairman Brooks. Thank you, Mr. Lipinski.
    If there are members who wish to submit additional opening 
statements, your statements will be added to the record at this 
point.
    At this time, I would like to introduce our witnesses for 
today's hearing. Dr. Cora Marrett is Deputy Director of the 
National Science Foundation. Since January 2009, Dr. Marrett 
has served as NSF's acting Director, acting Deputy Director and 
Senior Advisor until her confirmation as Deputy Director in May 
2011.
    Dr. Jose-Marie Griffiths is the Chairman of the 
Subcommittee on Facilities of the National Science Board, NSB. 
Dr. Griffiths was appointed to the NSB in 2006. She is 
currently Vice President for Academic Affairs and University 
Professor at Bryant University in Smithfield, Rhode Island.
    Mr. James Yeck is Director of the IceCube Neutrino 
Observatory located at the South Pole. That is a pretty good 
name, IceCube, for the South Pole. That is clever. Who came up 
with that? We will get into that in the questions. Mr. Yeck 
joined the University of Wisconsin-Madison as the IceCube 
Project Director in 2003. Previously, Mr. Yeck served as Deputy 
Project Director and Assistant Project Director for the 
National Synchrotron Light Source II project and as the Federal 
Project Director for the U.S. Large Hadron Collider 
Construction Project. Now, that is a mouthful. IceCube is 
easier to say.
    Dr. Tony Beasley is the Chief Operating Officer and Project 
Manager of the National Ecological Observatory Network. Dr. 
Beasley has worked as an astronomer post-doc, staff member, and 
Senior Manager at the U.S. National Radio Astronomy and Project 
Manager for CARMA and ALMA millimeter telescopes.
    And then finally, we have Dr. Tim Cowles. He is the Project 
Director and Principal Investigator of the Ocean Observatories 
Initiative, OOI, and serves as Vice President, Director, Ocean 
Observing activities at the Consortium for Ocean Leadership. 
Previously, Dr. Cowles served as Associate Dean and Interim 
Dean of the College of Oceanic and Atmospheric Sciences at 
Oregon State and served on the Leadership Council of the 
University National Oceanographic Laboratory System.
    As our witnesses should know, spoken testimony is limited 
to five minutes each, after which the members of the Committee 
will have five minutes each to ask questions.
    As an aside, we are scheduled to vote today at 
approximately 11:15. That is the advanced notice we have. 
Hopefully, we will be able to finish this hearing by then, but 
if not, as circumstances warrant, we will suspend and come back 
after the votes.
    I now recognize our first witness, Dr. Cora Marrett. Dr. 
Marrett, you are recognized for your five minutes.

   STATEMENT OF DR. CORA MARRETT, DEPUTY DIRECTOR, NATIONAL 
                       SCIENCE FOUNDATION

    Dr. Marrett. Thank you very much.
    Chairman Brooks, Ranking Member Lipinski, and distinguished 
members of the staff, thank you for inviting me to participate 
in this hearing for I am pleased to have the opportunity to 
discuss the National Science Foundation's large facilities 
process with you.
    As you well know, NSF is the primary federal agency 
supporting research at the frontiers of knowledge across all 
fields of science and engineering and all levels of science and 
engineering education. Its mission, vision, and goals are 
designed to maintain and strengthen the vitality of the U.S. 
science and engineering enterprise. As I start my remarks, I 
want to thank Congress on behalf of the Foundation for the 
sustained engagement and support you have shown NSF even in 
difficult economic times.
    Throughout its 60-year history, NSF has contributed to 
maintaining U.S. leadership in science and engineering research 
by enabling the creation of advanced instrumentation and world-
class, multi-user facilities for the science and engineering 
research community. Each NSF facility is chosen carefully to 
push technology and innovation to a new frontier of scientific 
discovery. In addition to enabling immense scientific return, 
these facilities serve as platforms to prepare the next 
generation of scientists and engineers and contribute to the 
need for high technology and services necessary for economic 
growth and innovation.
    You will hear today about a few of our newest major 
facilities, about, as you have already mentioned, IceCube, the 
world's first neutrino observatory which has just opened a new 
window on the engines that power galaxies and other 
astrophysical processes throughout the universe. You will hear 
about the Ocean Observatories Initiatives, or OOI, and the 
National Ecological Observatory Network, NEON. These are our 
newest facilities under construction.
    OOI and NEON are representative of a new transformational 
class of facilities for the 21st century. These are cyber-
enabled distributed observing systems that acquire and stream 
scientific data on vast geographic scales. These are just a few 
examples of our facility portfolio, a portfolio which spans the 
gamut of research disciplines from physics and astronomy, 
engineering and material science, to earth and ocean sciences, 
and polar and biological sciences.
    Major facility projects require special funding mechanisms 
that allow for multi-year construction. The Major Research 
Equipment and Facilities Construction account, or MREFC, was 
established by Congress in 1995 to support the acquisition, 
construction, and commissioning of large-scale facilities 
projects. Eligibility for MREFC funding is made on a case-by-
case basis and is not solely dependent on cost but on 
scientific promise. Indeed, NSF requires that each MREFC 
candidate project represent an outstanding opportunity to 
enable breakthrough research and innovation, as well as 
education and broader impacts.
    Mr. Chairman, NSF takes its facility stewardship 
responsibilities very seriously. Implementation of the largest 
NSF multi-user facilities requires investments of hundreds of 
millions of dollars to ensure success at this major scale of 
investment. NSF has strong processes in place for overseeing 
the planning, construction, and operation of its facilities and 
for managing our overall facility portfolio.
    As you will hear shortly from Dr. Griffiths, the National 
Science Board also provides extensive guidance, review, and 
concurrence on NSF decision-making for facilities. NSF also 
works very closely with our Inspector General, the Office of 
Management and Budget, and in partnership with Congress to 
ensure that we are working to the very highest standards.
    My written testimony outlines our processes from start to 
finish, including recent enhancements we have made to our 
procedures for facility planning and oversight.
    Mr. Chairman, thank you again for the opportunity to appear 
before the Subcommittee to speak to you on this important 
topic. At an appropriate time I will be pleased to answer any 
questions you may have.
    [The prepared statement of Dr. Marrett follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman Brooks. Thank you, Dr. Marrett.
    Next, the Chair recognizes Dr. Griffiths for five minutes.

               STATEMENT OF JOSE-MARIE GRIFFITHS,

             CHAIRMAN, SUBCOMMITTEE ON FACILITIES,

           NATIONAL SCIENCE BOARD, VICE PRESIDENT OF

              ACADEMIC AFFAIRS, BRYANT UNIVERSITY

    Dr. Griffiths. Chairman Brooks, Ranking Member Lipinski, 
and distinguished members of the staff, I appreciate this 
opportunity to testify before you today regarding the role of 
the National Science Board in guidance and oversight of 
facility investments at the National Science Foundation.
    Projects being considered for funding under the Major 
Research Equipments and Facility Construction account are high-
profile, high-cost activities for unique, cutting-edge 
facilities. They require considerable research and development 
in the design stage. And since these types of projects require 
significant taxpayer funds, the Board and the Foundation invest 
substantial efforts to review scientific needs, construction 
costs, and operations and maintenance costs for projects in or 
being considered for inclusion under the MREFC account.
    In my time on the Board, the Agency has made great strides 
in overseeing both the design and the construction of these 
critical facilities. The Board's role in oversight of the MREFC 
account includes approval of NSF-proposed projects for funding 
in future budgets, the funding priority list for previously-
approved-but-not-yet-funded MREFC projects, and approval for 
the release of Congressionally appropriated MREFC funds to NSF 
awardees.
    Current policy is for the Board to concur on the readiness 
of projects to proceed to the final design stage in the MREFC 
account. The most recent enhancement to this policy approved by 
the Board in February 2010 is the timeline for the Board's 
MREFC process, which the Board now receives in association with 
its annual facilities portfolio review.
    The Board established the Subcommittee on Facilities in 
2009 to oversee the Foundation's portfolio of facilities 
projects. The Subcommittee provides guidance to the Board on 
strategic planning for the NSF-funded research equipment and 
facilities portfolio. This guidance includes an annual review 
of existing MREFC and R&RA (research and related activities), 
large and mid-sized research facilities and infrastructure, and 
their impact on long-term budgets within the Foundation. The 
Subcommittee on Facilities reviews all phases of its facility 
design, development, construction, operations, and retirement.
    As part of its review, the Board conducts a joint Committee 
on Programs and Plans and Committee on Strategy and Budget 
meeting in February to hear details of the NSF facilities plans 
for projects anticipated in the upcoming year. The plan 
contains information about the planning and budgeting process 
for facilities under construction, including a brief status 
report on those projects already funded under the MREFC 
account.
    After the facility plan discussion, the Board conducts an 
annual portfolio review of projects at its May meeting. The 
objectives of this review are to examine the interrelationships 
between the proposed facility development and other activities 
across the Foundation to help guide the appropriate balance of 
investment in infrastructure and research. The review also 
examines the budgetary consequences, operations costs, and 
future liabilities of further development and guides NSF in 
managing risk and also in being able to respond to 
opportunities. It also can guide policies and recommend 
specific action for the coordination and optimization of 
partnerships between NSF and other agencies, private 
foundations, and foreign entities in support of major 
facilities.
    NSF's major multi-user facilities and its MREFC program are 
integral to the NSF investment portfolio. Selecting the best 
projects, providing adequate program management, and oversight 
for the operation of such facilities are all substantial 
challenges. These challenges must be met while ensuring that we 
continue to provide adequate balanced support for the 
individual research or proposals for potentially transformative 
research.
    On behalf of the National Science Board and the science and 
engineering research and education communities, I would like to 
thank the members of the Subcommittee for your long-term 
recognition of and commitment to support for the National 
Science Foundation and we look forward to continuing our 
productive working relationship with you and service to the 
Nation.
    [The prepared statement of Dr. Griffiths follows:]

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    Chairman Brooks. Thank you, Dr. Griffiths.
    The Chair next recognizes Mr. Yeck for five minutes.

                  STATEMENT OF JAMES H. YECK,

                   ICECUBE PROJECT DIRECTOR,

                UNIVERSITY OF WISCONSIN-MADISON

    Mr. Yeck. Chairman Brooks, Ranking Member Lipinski, and 
distinguished members of the Subcommittee, thank you for the 
opportunity to testify. My name is Mr. Jim Yeck, and I am the 
Project Director of IceCube, an NSF MREFC Project that created 
the IceCube Neutrino Observatory. My testimony provides an 
overview of the IceCube project from its beginning and responds 
to questions from the Subcommittee.
    IceCube is a particle detector embedded in a cubic 
kilometer of deep, very transparent South Pole ice that was 
designed to detect high-energy neutrinos from nearby and across 
the universe. The science capability of the observatory greatly 
exceeds that of previous detectors and those currently under 
construction, and thus, its capacity for transformational 
discovery is very significant.
    The IceCube MREFC project was proposed in 1999 and final 
approvals for constructions were given in 2004. Installation of 
detector instrumentation started in 2005 and concluded in 
December of 2010. Final project closeout will be completed this 
year. The total MREFC cost was $279.5 million with NSF 
providing 242.1 million and funding partners in Belgium, 
Germany, and Sweden providing support valued at 37.4 million.
    The bottom line is that the project was completed at cost 
and on schedule and that the detector exceeds its original 
performance and sensitivity goals. A series of peer reviews 
organized by NSF and the National Academy of Sciences concluded 
that IceCube was a worthwhile MREFC investment. Construction 
plans matured and eventually the MREFC project was ready for 
construction. This six-year process concluded with approval to 
begin full-scale construction by the National Science Board in 
April 2004.
    The primary strengths of the approval process were the 
quality of the external peer review, the close and effective 
coordination between the NSF's Office of Polar Programs and the 
Division of Physics, strong institutional commitment and 
engagement by the University of Wisconsin-Madison, and the 
international interest and support of the project. The primary 
weaknesses of the approval process were the general environment 
of uncertainty, the potential for discontinuities in financial 
support, and the fact that both the NSF and UW-Madison were 
still maturing in terms of their large project experience and 
capabilities.
    An approval process that is stretched out or unclear in its 
outcome creates an environment of uncertainty that is difficult 
to manage at the facility level. Construction and operations 
are managed under the terms of a cooperative agreement between 
the NSF and UW-Madison. The partnership between NSF and UW-
Madison provides the management accountability necessary to 
ensure that resources are used efficiently and that goals are 
consistently achieved. Key management arrangements used to 
manage IceCube include these clear lines of accountability and 
authority from NSF to UW-Madison to IceCube; detailed scope, 
schedule, and budget definition; explicit cost and schedule 
contingency derived from risk assessment; regular reviews by 
external committees; tracking and progress reporting against 
established milestones, budget, and performance metrics; and 
routine oversight by NSF, UW-Madison, and the foreign funding 
agencies.
    The essential tool of project management is to define an 
explicit contingency budget within a total project cost 
baseline. The IceCube project performance baseline included a 
22 percent contingency budget. In order to create this 
contingency budget within funding constraints, the base cost 
estimates were squeezed and the project scope was reduced 
creating an incentive for all parties to control cost in order 
to restore the original scope.
    The management flexibility enabled by contingency 
expenditures improved scheduled performance and resulted in 
cost savings and ultimately the restoration of the original 
project scope. Peer reviews organized by NSF were absolutely 
essential to IceCube's success. These reviews were typically on 
an annual basis and ensured transparency, early identification 
of critical issues, and project plans that included input from 
outside experts. Performance metrics were developed to ensure 
efficient use of American taxpayer dollars. Early operation 
results are excellent with 98.5 percent of the censors taking 
data and detector uptime at over 99 percent.
    The biggest challenges with the MREFC projects are often 
the transition phases--R&D and project definition into a 
construction start, the ramp-up into full construction, the 
efficient ramp-down of the construction effort, and the 
transition into operations. Discontinuities in funding and 
support can be detrimental as the facility managers strive to 
maintain a team of talented and motivated people, which is 
essential to the program's success.
    The stewardship of a large facility requires engagement, 
problem-solving, and support over decades. Facility stewardship 
requires an active role by the funding agency and involves 
joint ownership and partnership with the facility managers. The 
MREFC program has matured significantly over the last decade 
since IceCube was originally proposed. There is excellent 
sharing of experiences, lessons learned, and the ingredients to 
success.
    Thank you for the opportunity to testify. I would be happy 
to answer questions.
    [The prepared statement of Mr. Yeck follows:]

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    Chairman Brooks. Thank you, Mr. Yeck.
    The Chair next recognizes Dr. Beasley for five minutes.

                   STATEMENT OF TONY BEASLEY,

      CHIEF OPERATING OFFICER/PROJECT MANAGER, NEON, INC.

    Dr. Beasley. Chairman Brooks, Ranking Member Lipinski, and 
distinguished members of the Subcommittee, thank you for the 
opportunity to testify.
    My name is Dr. Tony Beasley and I am the Project Manager 
for the National Ecological Observatory Network and Chief 
Operating Officer of NEON, Inc. I appreciate the opportunity to 
provide you an overview of the NEON project today. My testimony 
will also address questions about the NSF MREFC program 
directed to me by the Committee.
    I would like to begin with a scientific motivation for 
NEON. Living systems on this plant are experiencing some of the 
greatest rates of change in history. The basic scientific 
knowledge needed to understand these changes on human scales--
that is regional to continental scales--calls for standardized 
physical and biological measurements on meter to multiple-
kilometer scales. Creating a national observatory to gather 
that information is the goal of NEON.
    In 1998, the National Science Board's Taskforce on the 
Environment identified NEON as a potential major facility, and 
after public hearings and discussions with the research 
community, the NSB qualified NEON as a potential MREFC project 
in August of 1999. Four years later, a National Academy of 
Sciences study also recommended the establishment of a national 
ecological observatory. Following these recommendations, the 
NEON project team began design and development efforts and 
passed through the MREFC process and reviews during 2006 to 
2009. In May of 2010, the National Science Board approved NEON 
construction and the NSF fully funded NEON construction in 
August of 2011 after authorization by Congress. From concept to 
start of construction was approximately 12 years, and we are 
recently underway.
    The MREFC process reviews all aspects of facility projects, 
including design, risk, cost estimates, and organizational 
capabilities. It examines whether the project will meet the 
scientific objectives of the facility in a safe, cost-effective 
and low-risk manner, and includes off-ramps where projects can 
be halted. Between late 2006 and early 2010, more than 16 major 
reviews of NEON construction and operation plans took place 
involving more than 100 scientists, engineers, project managers 
and administrators from the research and other communities.
    NEON's goals and implementation complement efforts in other 
organizations and we have worked extensively with state and 
federal partners to ensure our plans are understood and to 
identify new opportunities to use NEON data for resource 
management and other relevant purposes. At the project level, 
we have a continuous dialogue underway with the NSF reporting 
progress, issues, opportunities to guide facility construction 
and to allow project performance monitoring. Annual reviews of 
the project by external experts ensure that resources are being 
effectively used and progress is on track.
    Over the past decade, the MREFC process has become a well 
defined framework within which a facility can be conceived, 
designed, planned, reviewed, and constructed. The process is 
constituent with those used by the Department of Energy, NASA, 
and other large organizations to construct major facilities and 
experiments. In my opinion, it is a reasonable framework, but I 
note that individual outcomes in the process will vary as 
projects are subject to different risks and sensitivities to 
external circumstances.
    There are areas for development. The MREFC process 
currently focuses on domestic facilities like those represented 
here today, but the scale of scientific research has grown 
rapidly over the past two decades, and large international 
facilities may be needed to address the important scientific 
issues of tomorrow. The NSF Large Facilities Office has 
recently spearheaded efforts to improve community understanding 
of the challenges of international partnership and over time I 
would expect that the MREFC processes will be expanded to 
include interfaces to the international analogs.
    In summary, the field of ecology includes many complex 
scientific problems that increasingly can be addressed by new 
technologies, networking, and research collaboration styles, 
and NEON's goal is to facilitate this new path. The MREFC 
process provides an objective and effective management 
framework for facility construction and its rigor has 
undoubtedly improved NEON's project definition and performance.
    We look forward to continuing work with the Large 
Facilities Office, the National Science Foundation, and 
Congress to make a national ecological observatory a reality.
    Mr. Chairman and members of the Subcommittee, thank you 
once again for the opportunity to testify and I would be happy 
to discuss any issues the Committee may wish to explore.
    [The prepared statement of Dr. Beasley follows:]

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    Chairman Brooks. Thank you, Dr. Beasley.
    The Chair next recognizes Dr. Cowles for five minutes.

                    STATEMENT OF TIM COWLES,

                  VICE PRESIDENT AND DIRECTOR,

        OCEAN OBSERVING, CONSORTIUM FOR OCEAN LEADERSHIP

    Dr. Cowles. Thank you, Chairman Brooks, and Ranking Member 
Lipinski, and distinguished members of the Subcommittee and 
staff. Thank you for this opportunity to expand upon the 
comments already made and describe the Ocean Observatory's 
initiative and how it fits within the family of MREFC projects 
and has adjusted to and adapted to the processes now in place.
    I think a good starting point for our--my testimony is to 
refer to the two quotations that are behind you on the wall, 
which both refer to vision. Observatories provide the 
opportunity for us to open new windows onto the natural world. 
It is only through the opportunity for scientists to open new 
windows on scales previously unavailable to them that we can 
see further into the future and use the observatories as 
leverage to ask compelling new questions for science. So it is 
within that context that all of us at the table here are trying 
to push forward with observing science.
    The Ocean Observatories Initiative represents a midpoint of 
the three programs at the table today--NEON just getting 
started, IceCube well into the operational mode, the Ocean 
Observatories Initiative is about halfway through the 5-1/2 
year construction period. The Ocean Observatories Initiative 
consists and will consist of a very sophisticated cyber-network 
of ocean instrumentation--some of it fixed in place, some of it 
mobile and robotic--that spans multiple locations in the 
world's oceans, coastal sites, and seafloor capability. The 
transformative nature of the OOI has direct and short-term 
societal benefits to address aspects of coastal ecosystem 
health, ocean circulation, climate variability, and a range of 
topics around seafloor activity and geodynamics. Those short-
term benefits lead later to long-term forecasting improvements 
over a range of ocean processes.
    The MREFC experience for the Ocean Observatories Initiative 
is similar to the points that Mr. Yeck and Dr. Beasley have 
already made. A sequence of intensive peer-reviewed processes 
from initiation through final approval by the NSF through the 
National Science Board forges a level of rigor in the project 
team that is essential for both the construction and transition 
into the operational phase. For the OOI, the initial initiation 
or inception of the idea of a major ocean observatory system 
had its birth in the late 1980s. Many community workshops and 
panels met. There were reports at the national level that 
supported the concept of an extensive ocean observing system. 
In 2000, the NSB recommended that the idea of an ocean 
observatory system was worth further planning. In 2004, the 
National Science Foundation funded the opening of a project 
office for planning. Beginning in 2006, conceptual network 
design progressed through preliminary design reviews, and then 
final design reviews in late 2008 and early 2009 resulting in 
project approval in 2009 and construction initiation under 
stimulus or ARRA funding in September of 2009.
    The project has benefitted extensively from the process 
imposed by the NSF. We work very closely with the NSF on 
reporting and oversight. We implement; the NSF provides the 
oversight. The interaction of the project and the NSF and the 
external community is critical in the success of the 
observatory. And I would like to stress the point that the OOI 
as a product of the MREFC process builds upon a partnership 
between public, private, industrial, and the NSF. That 
integration of complementary capabilities is a very effective 
use of public funds.
    So I welcome the opportunity once again to discuss the OOI 
with you and I certainly will be available to answer any 
questions you have. Thank you.
    [The prepared statement of Dr. Cowles follows:]

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    Chairman Brooks. Thank you, Dr. Cowles.
    I want to thank the panel for their testimony. Reminding 
members that committee rules limit questioning to five minutes, 
the Chair will at this point open the round of questions. The 
Chair recognizes himself for five minutes.
    My first question is for Dr. Griffiths. The issue of 
contingency continues to be an area of concern not only for the 
National Science Foundation Inspector General but for Congress 
as well. You testified that the Board receives updates on the 
discussions between the Inspector General and NSF senior 
management. In that vein, I have three questions.
    First, does the Board have an opinion? Second, can you 
expand on the Board's role, if any, in the ongoing discussions 
and actions around this issue? And third, does the Board plan 
to take any action on this issue? So first is opinion; second, 
the Board's role; and third is action.
    Dr. Griffiths. Thank you, Chairman Brooks. The first one, 
on the Board having an opinion, the Board has spent a lot of 
time, particularly the Subcommittee on Facilities and the 
Committee on Programs and Plans, looking at how contingency is 
defined by the Board. And I will say it took a little while for 
us to understand that because of more common uses of--or 
multiple uses of the term ``contingency'' in our other 
environments. But I think the Board has a tendency to agree 
that the definition that is being used is fine. Now, the 
question is what are the implications of that definition going 
forward? The Board's role in the discussion, we have been--the 
Committee on Audit and Oversight has been receiving updates on 
the negotiations between NSF management and the Inspector 
General's office at every one of our meetings. So every meeting 
we have had a report. And we are pleased with the progress made 
to date. So at this point we haven't weighed into those 
interactions but we are receiving reports.
    Chairman Brooks. Second question would be for Dr. Marrett 
and Dr. Griffiths. Choose amongst yourselves who wants to take 
first crack at it. For three straight Inspector General semi-
annual reports, Inspector General Auditors have found 
unallowable contingency costs for three separate MREFC 
projects, $76 million for NEON, $88 million for OOI, and $62 
million for ATST. What is the NSF doing to rectify this 
continuing problem and what steps are being taken to prevent 
similar problems with other projects?
    Dr. Marrett. Thank you. I will start. Actually, there is a 
question about whether there are problems. I will say that 
those audits were of the proposals from particular projects, 
not from the actual expenditures once construction has begun. 
Thus, we are asking--and I believe the Inspector General's 
office is prepared now--to do audits not of the proposals but 
of the actual expenditures. The consequences are likely to be 
quite different.
    I would also elaborate a bit more on what Dr. Griffiths 
just said about the very notion of contingency. We know that 
for any project there are known risks and that is what the 
contingency is to cover, the known risks that are there. Thus, 
this is associated with our policy of no cost overrun. So no 
project is to go above what those costs are. The contingency is 
there to keep it within the bounds, then, of the kinds of costs 
that would be associated. Thus, what we are doing in 
collaboration with the Office of the Inspector General is 
clearing up the understanding that the processes that we use 
for contingency are those that are consistent with other 
agencies, and industry. Because of the very strong relationship 
we have with the wonderful Office of the Inspector General, we 
are convinced that we will be able to resolve--what seemingly 
are differences, that we are not quite sure are as deep as 
might be implied in the semi-annual reports.
    Chairman Brooks. Thank you, Dr. Marrett. I am going to move 
to Dr. Beasley and Dr. Cowles for a moment.
    Would each of you briefly explain your side of the 
contingency issue for the $76 million concerning NEON and the 
$88 million concerning OOI?
    Dr. Beasley. Mr. Chairman, as Dr. Marrett just indicated, 
the $76 million in contingency that was identified in the IG 
report is all of the contingency of the program at the proposal 
level. And so what you are seeing, as Dr. Marrett described, is 
not necessarily a difference between execution of the program 
and what we said; it is really the fact that our original 
proposal produced a risk-adjusted estimate, which included a 
contingency. And so they have found all of the contingency to 
be unallowable. And so that is the original of the $76 million 
number in the IG report.
    Chairman Brooks. Thank you, Dr. Beasley. Dr. Cowles?
    Dr. Cowles. Yes. Really, the answer is essentially the 
same. So when we began examining the construction costs for the 
OOI, we evaluated, using industry practice, the risk-based 
elements using clear formulae for assessing risk for every item 
in the construction and totaled that up and we end up in our 
proposal with $88 million. That, as Dr. Beasley said, is not 
the expenditure. It is not a number that is automatically 
expended. It is there to be drawn upon by the project through 
NSF approval process and our own internal controls only when 
the risk has to be addressed and mitigated through application 
of contingency funds. From a project standpoint, the $88 
million for the OOI is an essential part of how we must address 
risk through construction. Independent of how the IG looks at 
it from a practical, pragmatic standpoint, if we didn't have a 
contingency amount in our project budget, the initial budget 
would have had to have risk included in the construction costs.
    Chairman Brooks. Thank you, Dr. Cowles. I finished my 
questions before the five minute mark, but with the answers, we 
blew right on by it.
    At this point, I will recognize Mr. Lipinski.
    Mr. Lipinski. And Mr. Chairman, it's your Subcommittee so 
you can go as long as you want I think.
    I just want to thank all of our witnesses for their 
testimony and thank Mr. Yeck, Dr. Beasley, and Dr. Cowles for 
their--the work that they have done. I think what we are--we 
know we are looking at--the work that you are doing is looking 
at very important scientific questions and what we are trying 
to do here is to make sure that we are getting the most out of 
the funding and we are doing things in the best way possible.
    I want to start out by talking about DUSEL. The NSF's 
experience with DUSEL facility clearly indicates that planning 
and funding problems can affect not only the construction phase 
of MREFC projects but the preliminary design phase as well. And 
I think the NSF made the right choice regarding DUSEL but it is 
important that the lessons learned from this episode are used 
to improve the project evolution process.
    So I wanted to ask Dr. Marrett and Dr. Griffiths, can you 
discuss the steps that have been taken to improve the process 
for the early stages of MREFC projects so that this doesn't 
happen again?
    Dr. Marrett. Yes, there are three things I would say about 
what we have learned from the DUSEL experience. One is that we 
have tightened up what we mean by horizon projects; sums but 
more importantly perhaps, there is greater engagement early on 
of the National Science Board; third, we give systematic 
attention now to operations and management, more than had been 
the case when we first started looking at a number of the 
projects in this account.
    I would elaborate a bit more on the role of the Board. The 
Board has always had a role with reference to setting 
priorities. It wasn't as necessarily involved in the very early 
stages when we were talking about conceptual design, moving 
from the horizon stage to the conceptual design stage. We now 
have the Board engaged at every stage in the process. One of 
the things that the Board, in the case of the DUSEL project, 
certainly brought to attention was the importance of thinking 
about the matter of stewardship. As Dr. Griffiths will 
elaborate I am certain, this came to a question of what is the 
appropriate agency for stewarding a project of this size? We 
remain extremely interested in the science, the engineering 
that could emanate, but the question of the infrastructure 
itself was the one that was central for the Board's 
deliberation. I am sure that Dr. Griffiths will say more on 
that.
    Dr. Griffiths. Yes. Mr. Lipinski, we had three big concerns 
that came up with respect to the DUSEL project. One was the 
role of the partners and the stewardship model that wasn't 
really clearly defined at the stage at which we were looking at 
moving DUSEL forward. The second was the cost and scope of 
DUSEL as--inconsistent with the roles and responsibilities of 
NSF and the total project. And the third was we were concerned 
about NSF investment in underground science needed to be placed 
in the context of other international activities.
    But as Dr. Marrett has said, we have redefined the Board's 
role in the entire MREFC process, so we are in fact actively 
engaged at every stage. In particular, we recognize that moving 
a project from conceptual design through preliminary design is 
a significant investment of taxpayer money. We have focused our 
efforts particularly at the post-conceptual design stage. We 
have established the Subcommittee on Facilities to conduct an 
annual portfolio review at that point in time. Prior to that, 
facilities projects were looked at as they came in, one at a 
time, and one at a time you could say everything looks good.
    What we decided we had to do was to consider any new 
facilities project in the context of the existing portfolio of 
projects, how it adds, how it maneuvers resources, and in the 
context of the R&RA funding for the planning, the operations 
and maintenance, and most importantly, the research that the 
new facility would enable so that the portfolio review, which 
is conducted annually is going to become a major tool for 
decision-making for the Board and the Foundation. And that 
occurs for all facilities projects at every stage from horizon 
to decommissioning where we look at the entire portfolio of 
facilities, not just for the MREFC level of funding but 
actually all the way down through mid-scale funding as well so 
that we have a much better feel for the total portfolio. And we 
are currently looking at ways to develop key indicators of the 
health of that portfolio. So it is not just to look at the 
portfolio as a whole from the Foundation management process as 
a whole; we also look at the portfolio from the perspective of 
the directorates and the different divisions and the impact 
that new facilities will have on their available funding.
    Mr. Lipinski. Thank you. I think it is critical that we 
make sure that we are watching, you are watching more closely 
from the beginning. And we just--especially in these tight 
budget times make sure that we know--especially for the--so the 
people understand that these projects are important and we are 
doing the best that we can to fund them at the--in the 
appropriate way.
    So thank you. I yield back.
    Chairman Brooks. Dr. Marrett, is the National Science 
Foundation requiring more contingency now so that they stay 
under their ``no cost overrun'' policy?
    Dr. Marrett. If you mean are we requiring more for every 
project to have contingency, we are doing that. But if you mean 
are we requiring more in the contingency, no. What has to be 
there, has got to be specific to each project. What the 
contingency amount will be will vary depending on what the 
known risks are for any given project. Thus, if you are 
interested, we can provide you later, if you would like, how 
contingency does vary across projects because that is 
consistent with again what the known risks are for a project.
    Chairman Brooks. Now, Dr. Marrett, another question. In 
your testimony you noted, ``the decision milestones also 
constitute `off-ramps' for terminating the project if progress 
is not deemed satisfactory or NSF's plans or priorities 
change.'' How are these ``off-ramps'' identified and by whom?
    Dr. Marrett. The off-ramps are identified first within the 
given program, next by the Major Research Equipment and 
Facilities Construction panel, and then that panel makes its 
recommendations to the Director. Each stage in our process 
offers the possibilities for off-ramps, so there is nothing 
that says a project that makes it through that first stage--
from horizon to conceptual design--will actually end up in 
construction because any number of things could lead to the 
decision that it is not ready. Those, then, represent the off-
ramps. If a project does not make it through conceptual design 
review, for example, it doesn't move to the next stage in the 
process. All of that is handled by, first, the program; 
secondly, by the panel that advises the Director; then finally 
by the Director.
    Chairman Brooks. How many projects have been terminated for 
failure to meet the milestones?
    Dr. Marrett. We will get back to you. I am not sure I have 
the exact figures. There have been lots of projects that have 
come into the process. That is why I said in one way we have 
tightened up on the notion of horizon projects because a lot of 
people interpreted horizon as a dream in an eye, and that is 
not what we meant there. There has to be a level of commitment 
by the sponsoring organization for something to move to the 
next stage. There are lots of activities that never really 
reach that stage of moving from horizon. There are others, and 
as I said, we can get to you the information on the number and 
conditions associated with the failure of a project; to move 
from one stage to the next.
    Chairman Brooks. Offhand, can you recall any projects that 
have been cancelled for failure to meet milestones?
    Dr. Marrett. Let us see. Yes, although I am trying to 
remember right now what are some of the precise ones. In Rare 
Symmetry Violating Process (RSVP) we have an example of a 
project that had been terminated because it didn't proceed 
according to our process.
    Chairman Brooks. In your judgment, does that threat of 
termination of the project encourage the meeting of milestones?
    Dr. Marrett. We certainly hope so. What has to be 
understood from the outset is that nothing again is guaranteed. 
This is the communication we have with the communities. That is 
one of the reasons why these are cooperative agreements when 
things are finally worked out because they have to be 
cooperative between the National Science Foundation and the 
proposing project. Thus, we make the case all the time that 
there is nothing that says you will automatically move to the 
next stage. We set forth in the criteria what is essential for 
the kind of transition from one stage to the next. So we 
believe that that really does tighten up on what is going to 
come forth and certainly will tighten up on where allocations 
have to be made.
    Chairman Brooks. And are there additional issues that may 
cause a termination not accounted for in the decision 
milestones?
    Dr. Marrett. Potentially, there are. I can say a few of the 
things that we do take into account are extremely relevant. In 
the case of multi-user facilities, for example, there has got 
to be clarity that there is a user community, a large user 
community that wants to make use of those facilities. If things 
change over time and there is a strong indication that there 
isn't a community that is going to be appropriately making--
benefitting from that, that is something that is important.
    Other kinds of developments--there can be challenges as 
other international projects might come onto the scene that 
make something less than the cutting edge that we had 
anticipated when the process might have started. Sometimes 
there are personnel changes that make it very difficult for us 
to anticipate that this is something that is going to move in 
the directions that would be there. We think we have identified 
key developments, key issues, but this is a process always 
under examination, always subject to our learning more about 
what are the conditions that have to be considered.
    Chairman Brooks. Thank you, Dr. Marrett.
    The Chair next recognizes Mr. Lipinski for an additional 
set of questions and then we will move to Mr. Hultgren from the 
great State of Illinois.
    Mr. Lipinski. Thank you, Mr. Chairman.
    I just want to continue on a little bit with what the 
Chairman was asking about. We were talking about off-ramps here 
and as these projects move forward and you are examining them 
and say a project should not move forward. Where does Congress 
come into this? Where should Congress come in? What is the 
relationship--what kind of communication goes on with Congress? 
I mean that is a critical role, obviously, that--up here that 
we face. And I just want to know up to this point where--what 
has that relationship been with that communication been on 
these projects?
    Dr. Marrett. Well, I can tell you Congress makes an 
ultimate decision about an on-ramp or off-ramp having to do 
with funding because once the project has moved from 
preliminary to final design, that is the stage at which we can 
talk about it being included in a future budget. When we say 
this could be included in a future budget, as you know, budgets 
are negotiated, discussed extensively with Congress. So that is 
one of the key stages that Congress is clearly involved.
    The other stages, Congress has always had the possibilities 
of pursuing, as this hearing is doing, the stage of particular 
projects, and we are always open to providing information in 
some cases about the portfolio--that is what has been asked-- 
or in other cases about particular projects. We stand open 
[today], then, to Congress at any time being very much 
involved. So it is for the final--what happens to a final 
project. It is also the engagement about what happens before 
something goes into the MREFC account because the funding for 
that stage comes from the research and related accounts. 
Congress then also oversees what happens in the funding of 
those accounts. So I would say the funding role is a critical 
one.
    Mr. Lipinski. Well, this isn't a criticism particularly of 
anyone or anything that has gone on before, but maybe this 
Committee should have--be watching more and not leave it up 
just to the appropriators to be playing the role in this. I 
certainly think that is an important role for this Committee to 
be taking.
    I am not sure how much we can get into this in the amount 
of time I have left, but we are talking about contingency 
funding, and I think it is a little fuzzy about what this is. 
It is certainly not a slush fund. My understanding is on 
average a project--the expectation that a project will be 
completed at total cost--that is the sum of a fixed, 
predictable amount plus the contingency fund, which captures 
the expected cost of the uncertain portion of the project. So 
my understanding is there is a calculation of how much you 
expect because you can't know exactly how much everything is 
going to cost, but you create a contingency fund. Is the 
expectation, then, that you are going to--the spending is going 
to be the mean of that contingency fund? You are going to 
spend--that half the contingency fund will be spent or where is 
the expectation of--because, you know, I am looking at this as, 
you know, do you calculate a normal curve and say this is what 
our expectation is for how much it is going to cost because 
there is certain specific uncertainty for each portion of the 
project? So what is the real expectation in terms of the 
contingency fund? It is not--my understanding is it not on top 
of what is--you plan--that you are expected to spend but you 
expect to spend some of that contingency fund?
    Dr. Marrett. For that, I will give a general response but I 
think the more detailed response would come appropriately from 
those who have had to handle the matter of contingencies. So I 
would say again we go back to that there are given risks. When 
a budget is prepared, it should be that minimal budget, the 
budget that is going to have to be there given that there are 
always potential risks and we can't come in over what we have 
included there. That is the way, then, the contingency is to be 
built in.
    I know one of the questions that has come up periodically 
is, don't you expect, then, the contingency not to be spent and 
to be returned to the Federal Government? If that is the case, 
we can return. But more frequently it is there because the 
risks actually do come about and we have to have a way for 
covering those. As I said, I think it would be appropriate 
probably for Mr. Yeck, who had to work with this with reference 
to IceCube.
    Mr. Lipinski. Before we go to Mr. Yeck, is the expectation, 
though, that contingency--some of it will be spent or is the 
expectation that it won't be spent?
    Dr. Marrett. The expectation is it will be spent, that 
there will be those risks. That is why we have said these are 
not just some kind of speculation. It is the set of known 
unknowns as sometimes they are called. You know that there are 
going to be the risks and there are the estimates of what are 
the costs associated with those. Thus, you do expect to have to 
pay to cover those risks. So that is the way, as I said, I 
believe I could elaborate on what that has meant for IceCube, 
but that is the kind of expectation from the National Science 
Foundation.
    Mr. Lipinski. Mr. Yeck, it is up to the Chairman now. Mr. 
Yeck, if you--to add more to--go ahead, Mr. Yeck, if you have 
more to add to that from your experience.
    Chairman Brooks. Go ahead.
    Mr. Yeck. Yes, I can make some comments. The short answer 
is that the expectation is that the contingency will be spent. 
Project management----
    Mr. Lipinski. Wait. Some of the contingency?
    Mr. Yeck. All of it.
    Mr. Lipinski. Or all of it?
    Mr. Yeck. All of it. Project management--there is a science 
to it and there is an art, and part of the art is to squeeze 
base budgets so that the responsible managers are in a constant 
discussion with the higher level management about how funds are 
used, and contingency is one way of having a transparent 
dialogue on that. Specifically, there are examples-- may I 
respond to the question earlier, Mr. Lipinski, about IceCube. 
You know, the boundary conditions when IceCube was baselined--
this period where you start construction, where you are 
defining the performance baseline where you have--are very 
general to MREFC projects. You have a five to ten year project; 
you do not want to go back for more funding. There is a high 
level of engagement and oversight by the NSF like any MREFC 
project. Specific to IceCube, we had the recognition that it 
would be exceedingly expensive to go back and try to add 
instrumentation at a later date given the South Pole logistics 
framework.
    Leading up to project baseline, we did a bottom up cost 
estimate. It came up over $10 million higher than the funding 
plan, which was 242.1 million. And at this point, the 
partnership between NSF, UW-Madison, and the scientific 
collaboration engaged to look at how best to develop the final 
project baseline, including a contingency. And we de-scoped 
from 80 to 70 strings in terms of the plan, the project plan, 
and established this 22 percent contingency budget that I 
mentioned, which we expected to spend on the 70 strings.
    When the project was approved by the Science Board, it was 
approved to go up to 80 strings, the original baseline, and we 
had an incentive built in to try to save costs--reduce costs, 
and the best way to do that is schedule. So we worked very hard 
to maximize the insulation of strings each year at the South 
Pole and we reached record numbers and saved fuel, which is a 
big expense for IceCube. And so in the end of our total 
contingency budget, less than 25 percent went into the cost of 
restoring these strings.
    Further comment if I may that this practice is actually 
modeled off another project which DOE and NSF supported--which 
I was involved in which was the LHC--there was a cap 
contribution to the European lab in particle physics. The 
detectors de-scoped to create a 50 percent contingency given 
the high risks in those projects, and in the end, about 50 
percent of that contingency went to scope restoration. So it is 
an approach that works very well from a project-management 
standpoint to have that incentive. Typically, you would expect 
to spend the contingency on the baseline scope.
    Thank you.
    Mr. Lipinski. Thank you.
    Chairman Brooks. Thank you, Mr. Yeck.
    Thank you, Mr. Lipinski.
    The Chair next recognizes Mr. Hultgren from the great State 
of Illinois.
    Mr. Hultgren. Thank you.
    Thank you all for being here. Sorry it is a busy day. We 
have got a lot of different committees going on in markups. So 
I know other people would love to be here. We are all kind of 
running around so--but thank you so much for your work.
    Dr. Marrett, I wondered--just a question. Major Research 
Equipment and Facilities projects often span decades from 
inception to operation. How does the Foundation plan 30 years 
in advance or more if ramp-up is 10 to 15 years and a facility 
may be in operation for an additional 30 years for the 
continuous support of these projects?
    Dr. Marrett. We are talking about the MREFC account, which 
is a construction account. The other parts of this that you are 
asking about will have to do with the research support that is 
going to have to be there. As I have indicated a bit earlier, 
we are now giving a lot of attention at the outset to what will 
be the operational, the maintenance cost, and what is the 
likelihood that there will be continued demand from the 
research community. Anticipating what is going to happen from 
the community is very much a part of this process but that is 
funded not through this account, that is funded through the 
research and related account or the education and human 
resources account. So we don't really try to ask about funding 
from MREFC for what will happen for support of the advancement 
of the knowledge over the years.
    Your overarching question suggesting that all of this has 
to be taken into account and the long lead time does have to be 
considered very much. There is a long lead time in the actual 
development of construction projects, and then once there is 
the construction, there is an anticipation of a certain 
lifetime for the research that would be done. So I hope that 
comes somewhat close to what you were interested in.
    Mr. Hultgren. I appreciate that. And again I do thank you 
all for being here. And I yield back.
    Chairman Brooks. Mr. Yeck, one follow-up with you if I 
might. ``IceCube is a particle detector imbedded in a cubic 
kilometer of deep, very transparent South Pole ice that was 
designed to detect high-energy neutrinos from nearby and across 
the universe.'' And this is from your testimony. And then you 
also add that it ``includes about 250 people from 39 
institutions in 11 countries.'' If you could, please give the 
members a primer of sorts on why the South Pole was chosen for 
this particular endeavor and then also what is the expected 
scientific reward for what we are doing.
    Mr. Yeck. Thank you. The South Pole provides a unique 
opportunity to have the large detector volume that is needed. 
So detectors of this type previous practice would be to build a 
large tank, excavate a cavern to create the volume that is 
needed. In the case of IceCube, that volume exists in the 
icecap at the South Pole. So the challenge, then, is to drill 
into the ice and install the sensors that are needed. And the 
South Pole is an ideal location because not only is that icecap 
there but the infrastructure is in place through the U.S. 
Antarctic Program. So the logistics chain exists and so the 
instrumentation that was produced around the world could be 
moved efficiently to the South Pole, and then the drilling 
crews and the scientists could be supported at the South Pole 
to carry out that construction. So that was very--it was very 
cost-effective. If you imagine trying to do this at a location 
that did not have that infrastructure, it would be exceedingly 
expense.
    IceCube is a detector that is opening up a new avenue to 
discovery, neutrino astronomy. So it is as likely that the 
science coming out of IceCube will be something unexpected, as 
it is the expected science of neutrino detection, high-energy 
neutrinos outside of our galaxy. So this is now underway, the 
collaboration of institutions, which are about half in the 
United States and half worldwide are actively analyzing data 
and pursuing their science objectives.
    Thank you.
    Chairman Brooks. Thank you, Mr. Yeck. And I believe Mr. 
Lipinski has one more round of questions.
    Mr. Lipinski. Thank you, Mr. Chairman.
    I have a question for Dr. Marrett. The Large Facilities 
Office is responsible for a budget as large as the Office of 
Cyberinfrastructure, which sits in the Office of the Director 
and similar funds critical research infrastructure. Why is the 
Large Facilities Office within the CFO's office and not the 
Director's office like OCI where it would have direct access to 
the Director and more leverage in its relationship with 
research directorates?
    Dr. Marrett. Actually, the location of an office or any 
other entity of NSF does not indicate always the access that is 
there. The Office of the Director has to be concerned with all 
parts of the Foundation. Thus, the offices--the directorates 
very much report to the Director. That is the same case, then, 
for the Large Facilities Office. It does come through Budget & 
Financial Administration, but that is not to indicate that 
there isn't the kind of ongoing interaction between that office 
and the Office of the Director, the way that it is for the 
Office of Cyber Infrastructure.
    One of the things that the Deputy Director for the Large 
Facilities Office does is to prepare a monthly report on where 
things stand, a report that comes to the Director and to me and 
that we review very carefully. We then spend whatever time is 
essential that might be requested from any number of angles to 
ensure that we are very familiar with what happens in that 
particular office. Thus, as I said, location is not always an 
indication of oversight or engagement in the kinds of concerns 
that the Foundation has to be concerned with.
    Mr. Lipinski. Well, was there a reason that OCI was put in 
the Director's office when it was created?
    Dr. Marrett. Yes, there were a couple of reasons and some 
of those are really being reexamined right now to be perfectly 
honest. There are sometimes reasons for the location of 
particular offices and operations that don't always hold up 
over time. So we are reviewing all of the operations that 
currently report to the Office of the Director because, as I 
said, sometimes that is interpreted as giving greater access to 
the Director than the directorates and other offices that are 
not listed as a part of the Office of the Director. Since that 
is really not the way it happens, we are just taking a look at 
all of the structure to ensure that there is an understanding 
of the engagement that has to be there, again, with all of the 
key things the Foundation has to oversee.
    Mr. Lipinski. Thank you, Dr. Marrett.
    I yield back.
    Chairman Brooks. I would like to thank the witnesses for 
their participation in today's hearing and also thank the 
members for their questions. And most importantly, we were able 
to finish before the votes start on the House Floor in about 10 
to 15 minutes.
    With that, the members of the Subcommittee may have 
additional questions for the witnesses and we will ask you to 
respond to those in writing should any be forthcoming. The 
record will remain open for two weeks for additional comments 
from members.
    The witnesses are excused and this hearing is adjourned.
    [Whereupon, at 11:17 a.m., the Subcommittee was adjourned.]
                               Appendix I

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                   Answers to Post-Hearing Questions




                   Answers to Post-Hearing Questions
Responses by Dr. Cora Marrett, Deputy Director, National Science 
        Foundation

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Responses by Dr. Jose'-Marie Griffiths,
Chairman, Subcommittee on Facilities, National Science Board;
Vice President of Academic Affairs, Bryant University

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Responses by Mr. James H. Yeck, IceCube Project Director,
University of Wisconsin-Madison

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Responses by Tony Beasley, COO/Project Manager, Neon, Inc.

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Responses by Dr. Tim Cowles, Vice President and Director,
Ocean Observing, Consortium for Ocean Leadership

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                              Appendix II

                              ----------                              


                   Additional Material for the Record



          Additional responses for the record as submitted by
     Dr. Cora Marrett, Deputy Director, National Science Foundation

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