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



                               BEFORE THE


                                 OF THE


                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION


                           SEPTEMBER 12, 2012


                           Serial No. 112-175

      Printed for the use of the Committee on Energy and Commerce


85-180                    WASHINGTON : 2013
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                          FRED UPTON, Michigan

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
  Vice Chairman                      DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
BRIAN P. BILBRAY, California         TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire       MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey            Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia


              Subcommittee on Oversight and Investigations

                         CLIFF STEARNS, Florida

LEE TERRY, Nebraska                  DIANA DeGETTE, Colorado
SUE WILKINS MYRICK, North Carolina     Ranking Member
JOHN SULLIVAN, Oklahoma              JANICE D. SCHAKOWSKY, Illinois
TIM MURPHY, Pennsylvania             MIKE ROSS, Arkansas
MICHAEL C. BURGESS, Texas            KATHY CASTOR, Florida
MARSHA BLACKBURN, Tennessee          EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California         GENE GREEN, Texas
PHIL GINGREY, Georgia                DONNA M. CHRISTENSEN, Virgin 
STEVE SCALISE, Louisiana                 Islands
CORY GARDNER, Colorado               JOHN D. DINGELL, Michigan
H. MORGAN GRIFFITH, Virginia         HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)


                             C O N T E N T S

Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     1
    Prepared statement...........................................     4
Hon. Diana DeGette, a Representative in Congress from the State 
  of Colorado, opening statement.................................     6
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     7
    Prepared statement...........................................     8
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................     9
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     9
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    10
    Prepared statement...........................................    12
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    89


Daniel B. Poneman, Deputy Secretary, Department of Energy........    14
    Prepared statement...........................................    17
    Answers to submitted questions...............................    90
Thomas P. D'Agostino, Under Secretary for Nuclear Security and 
  Administrator, National Nuclear Security Administration, 
  Department of Energy \1\
    Answers to submitted questions...............................   115
Glenn S. Podonsky, Chief Health, Safety, and Security Officer, 
  Department of Energy \1\
Mark E. Gaffigan, Managing Director, Natural Resources and 
  Environment, Government Accountability Office..................    25
    Prepared statement...........................................    27
    Answers to submitted questions...............................   129
Gregory H. Friedman, Inspector General, Department of Energy.....    47
    Prepared statement...........................................    49
    Answers to submitted questions...............................   137

                           Submitted Material

Subcommittee exhibit binder......................................   139

\1\ Mr. D'Agostino and Mr. Podonsky did not present statements 
  for the record.

                          TAXPAYER STEWARDSHIP


                     WEDNESDAY, SEPTEMBER 12, 2012

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:02 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Cliff 
Stearns (chairman of the subcommittee) presiding.
    Members present: Representatives Stearns, Terry, Burgess, 
Blackburn, Scalise, Gardner, Griffith, Barton, DeGette, 
Schakowsky, Castor, Markey, Green, Christensen, and Waxman (ex 
    Staff present: Nick Abraham, Legislative Clerk; Carl 
Anderson, Counsel, Oversight; Charlotte Baker, Press Secretary; 
Sean Bonyun, Communications Director; Matt Bravo, Professional 
Staff Member; Karen Christian, Deputy Chief Counsel, Oversight; 
Andy Duberstein, Deputy Press Secretary; Heidi King, Chief 
Economist; Krista Rosenthall, Counsel to Chairman Emeritus; 
Alan Slobodin, Deputy Chief Counsel, Oversight; Peter Spencer, 
Professional Staff Member, Oversight; Alvin Banks, Democratic 
Investigator; and Tiffany Benjamin, Democratic Investigative 


    Mr. Stearns. Good morning, everybody, and I welcome our 
witnesses to the Oversight and Investigation Committee. Today's 
Subcommittee on Oversight and Investigation will review 
challenges to safety, security, and taxpayer stewardship in the 
Department of Energy's nuclear weapon complex.
    DOE is responsible for securing and maintaining the most 
dangerous materials on the planet, including nuclear warheads. 
This is one area that must have effective oversight.
    This committee, principally through the work of this 
subcommittee, has a long history of bipartisan scrutiny of the 
Department of Energy's oversight and management of the 
contractors that are charged with running DOE's nuclear weapons 
programs and operations. And the lessons from our committee's 
past investigations and related GAO, Inspector General, DOE's 
oversight reports should guide our bipartisan review of the 
current situation.
    My colleagues, chief among these lessons is that 
independent and effective oversight is simply essential and 
necessary. The safety and security risks involved in overseeing 
the Nation's nuclear facilities are enormous, and this 
committee must be vigilant about maintaining the exhaustive 
oversight that the committee has traditionally had in this 
    DOE, through its National Nuclear Security Administration 
or NNSA, manages programs that involve high-hazard nuclear 
facilities and materials, the most sensitive national security 
information, and complex construction and environmental cleanup 
operations that pose substantial safety, public health, and 
environmental risks. Interestingly, all of these programs are 
carried out by contractors, both at the national labs and at 
DOE's weapon production facilities.
    These contractors and their Federal managers, spending 
billions of taxpayers' dollars on dangerous nuclear projects, 
require rigorous oversight. Today we will review what DOE has 
done in recent years to reform its oversight and program 
management. I welcome our witnesses from DOE, the DOE Inspector 
General, and the GAO, who will help us in examining this 
important issue.
    When government vigilance is not sufficiently rigorous, 
problems obviously occur. The case in point is a recent 
security failure at the Y-12 National Security Site in Oak 
Ridge, Tennessee, this past July. By all accounts contractors 
and site managers' failures at Y-12 allowed one of the most 
serious security breakdowns in the history of the weapons 
    But Y-12 is but the latest in a string of failures. Over 
the past decade we have seen security breaches and management 
failures at Los Alamos National Laboratory in New Mexico. GAO 
testimony will remind us all of one, 5-year period after 9/11 
in which 57 security incidents occurred, more than half of 
which involved a confirmed or suspected release of data that 
posed the most serious rating of threat to the United States 
security interest.
    In another example investigated by this subcommittee in 
2008, the Lawrence Livermore National Lab gave itself passing 
marks on its own physical security, and the NNSA Federal onsite 
managers gave it a passing mark, too. Only when DOE's Office of 
Independent Oversight actually tested the security 
independently was it evident that the lab deserved the lowest 
possible rating for protective force performance and for 
physical protection of classified materials.
    On the safety front, the experience has been no better. 
From 2007 to 2010, the Lawrence Livermore Lab has multiple 
events involving uncontrolled worker exposure to beryllium, 
which can cause a debilitating and sometimes fatal lung 
condition. During this period the lab determined it was 
compliant with DOE's safety regulations. It took an independent 
department oversight review to determine that the contractors' 
program violated the regulations.
    Now, this past May the DOE Inspector General reported that 
Sandia National Laboratories had not held its line managers 
accountable for implementing an important system for preventing 
and reducing injuries. Neither the contractor nor the Federal 
site manager had addressed problems that had been identified in 
this program for more than a decade.
    For more than 20 years GAO has designated DOE contract 
management oversight relating to the weapons complex as high 
risk for fraud, waste, abuse and mismanagement. We have seen 
examples of this multi-billion dollar cost increases and 
schedule delays in important NNSA construction projects.
    In the meantime, directors of the national laboratory and 
others claim that Federal oversight is too burdensome and 
intrusive and that DOE should back off and let the contractors 
operate as they see fit. Our friends at the Armed Services 
Committee have moved legislation through the House that would 
dramatically limit DOE's ability to conduct independent, 
internal oversight over its program management and the 
    I recognize that NNSA has not been delivering all that is 
expected of it, but this committee, given its jurisdictional 
and longtime policy interest in effective DOE management has to 
diagnose the problems for itself independently. We need to 
examine the facts, follow the evidence, identify what works and 
what doesn't work, and identify a clear path to ensuring safe, 
secure operations, in the interests of taxpayers, and of 
course, our national security.

    [The prepared statement of Mr. Stearns follows:]

    [GRAPHIC] [TIFF OMITTED] 85180.001
    [GRAPHIC] [TIFF OMITTED] 85180.002
    Mr. Stearns. With that I recognize the ranking member, Ms. 


    Ms. DeGette. Thank you very much, Mr. Chairman.
    I want to echo the chairman's remarks about this 
subcommittee having a long bipartisan history of asking tough 
questions about the safety and security of our Nation's nuclear 
facilities. I am really pleased we are continuing this work 
    I am glad that members of this subcommittee have the chance 
to develop a greater understanding of how NNSA is doing 
securing our nuclear facilities and to learn what can be done 
to improve the safety and security of those who live or work 
near those facilities.
    I have been on this committee for almost 16 years now, and 
since that time we have had almost 20 or over 20 hearings on 
nuclear issues at our national labs. In fact, many of the 
witnesses here today are regulars in front of this committee. I 
know the importance of safe and secure nuclear facilities, and 
I know what is at stake when something falls through the cracks 
or when the contractors at the sites aren't being carefully 
    About 10 years ago this subcommittee began the first of a 
series of hearings on shocking security issues at Los Alamos 
National Laboratory in New Mexico. Chairman Barton will 
remember the trip that we took there to look at that facility 
and to see the shocking lapses that we saw.
    What we covered were serious pervasive issues with the 
management, culture, and the security and safety of the site. 
We attacked those problems head on, demanding answers and 
forcing NNSA and DOE to work harder to secure their facilities, 
and as a result the agency implemented new security procedures 
and increased oversight of the labs.
    But obviously NNSA has more work to do and frankly, this 
committee has more oversight work to do. In recent weeks we 
have seen new safety and security issues arise at two locations 
in the Nation's nuclear weapons complex. Late last month the 
Los Alamos Lab informed the public that they were investigating 
an inadvertent spread of a radioactive material, Technetium-99, 
by employees and contractors at Los Alamos. While DOE indicated 
that there was no danger of public contamination, approximately 
a dozen people were exposed, with some tracking of the 
radioactive material offsite.
    This safety lapse comes on the heels of a bizarre but very 
serious security breach at the Y-12 uranium facility, where an 
82-year-old nun--an 82-year-old nun--and two others were able 
to breach the secure perimeter and vandalize a supposedly 
secure building containing dangerous nuclear material.
    These safety and security incidents show very clearly the 
need for strong and robust oversight from this committee and 
others of security issues at our nuclear facilities.
    In 2004 and 2005, our willingness to bring serious nuclear 
safety issues into the public view and to demand that DOE and 
its labs be held accountable for their actions made a 
significant difference. DOE is better than it used to be. There 
is an entire office dedicated to the health, safety, and 
security of all DOE facilities, but recent events tell us there 
is more serious work left to be done.
    So, Chairman, that is why it is absolutely necessary for 
DOE and others to remain a strong oversight role over NNSA 
facilities. From this committee to the DOE Office of Health, 
Safety, and Security, to the Inspector General, to GAO, to the 
Defense Nuclear Facilities Safety Board, to other outside 
organizations, strong, independent oversight from agencies and 
groups forces NNSA to take better care of our nuclear 
facilities. Without good oversight, serious issues, won't be 
identified and fixed, and the results could be disastrous. I 
can't think of any reason we would want to decrease our 
oversight of these facilities, inhibit the ability of oversight 
to review site actions, or reduce accountability for those 
responsible for keeping nuclear sites safe.
    At a time when terrorists and hostile nations have an ever-
increasing pool of physical and cyber weapons in their 
arsenals, we need to constantly adapt and focus our efforts to 
protect nuclear facilities. I hope that this hearing will 
provide us with the information that our colleagues on both 
sides of the aisle need so we can come together to improve the 
safety and security of these nuclear facilities. There have 
just been too many close calls to ignore. Constant vigilance is 
required. When it comes to our Nation's nuclear facilities, 
there can never be enough oversight, and that, Mr. Chairman, is 
why I appreciate you holding this hearing today, and I yield 
    Mr. Stearns. I thank my colleague, and I recognize the 
gentleman from Texas, Mr. Barton, for 2 minutes.


    Mr. Barton. Thank you, Mr. Chairman. When an 82-year-old 
pacifist nun gets to the inner sanctum of our weapons complex, 
you cannot say, ``Job well done.'' She is in the audience. 
Would you please stand up, ma'am? We want to thank you for 
pointing out some of the problems in our security. While I 
don't totally agree with your platform that you were espousing, 
I do thank you for bringing up the inadequacies of our security 
system, and thank you for being here today.
    Mr. Chairman, that young lady there brought a Holy Bible. 
If she had been a terrorist, the Lord only knows what could 
have happened. We have had numerous hearings in this 
subcommittee and full committee on security at our national 
laboratories and especially our weapons complexes. Apparently 
that message has still not gone forward about what needs to be 
    What doesn't need to be done, though, is just give the 
contractors an ``atta boy'' and a pat on the back. If there is 
ever a time for more aggressive oversight, this is it, and I 
applaud you and the ranking subcommittee member, Ms. DeGette, 
for doing that today, and with that I yield to Mr. Terry the 
balance of my time.
    [The prepared statement of Mr. Barton follows:]
    [GRAPHIC] [TIFF OMITTED] 85180.003

    Mr. Terry. Thank you.
    Mr. Stearns. The gentlelady can sit down if she likes.
    Mr. Terry. Well, it is--I have to congratulate the 
contractors of NNSA for accomplishing something based upon 
their mind-boggling incompetence that hasn't happened here in a 
while, and that is uniting Republicans and Democrats in our 
desire for change and reform and more oversight.
    The security of U.S. nuclear weapons stockpile cannot be 
overstated. NNSA was created to keep the DOE from being 
overstretched, yet it appears that all of their duties were 
left with contractors where little oversight could or would be 
done. The last 5 years has seen a significant deterioration in 
security at the complexes as a result of a decrease in how 
contractors interact with Federal officials. There must be an 
understanding that the taxpayer owns these complexes, and they 
have not gotten their monies' worth.
    Failures in both the safety of the laboratories and 
protection of the weapons themselves has been repeated across 
the complex, and I believe there is bipartisan support for more 
oversight. The unprecedented breakdown at Y-12 acted as a test 
of our security system, and it appears to be an all-out 
failure. I struggle to understand how the gentlelady that was 
introduced, an 82-year-old nun, can get through the Fort Knox 
of nuclear weapons facilities, and what does that say for the 
complex as a whole?
    A major concern of the Y-12 breakdown is the disunity 
between maintenance and operation contractor and the security 
personnel. When cameras had been inoperable for 6 months, this 
tells me that even the most basic level there is no 
communication within the facility, no oversight, and I 
understand there is a point where too much oversight can become 
inefficient and hinder progress in a nuclear--progress in 
nuclear testing. I believe that we are ultimately here today to 
do--is find a balance where citizens can be certain that the 
nuclear materials are pure and scientists continue to work in 
their most efficient manner.
    That is what we are here to do today. Hopefully we can find 
that balance, and I will yield to the gentlelady from 


    Mrs. Blackburn. I thank the gentleman, and I thank the 
Chairman for the hearing, again. Indeed, there has been a lot 
of emphasis and a lot of focus on the July 28, 2012, incident 
that occurred at the Y-12 facility and the security complex 
there, and the nun who has stood and been recognized and two 
other anti-nuclear activists cut through that fence, got into, 
through the perimeter. They did this seeming to not be noticed. 
Despite setting off multiple alarms, a delayed response to WSI 
security personnel gave these protestors time to hang banners, 
splash blood and paint messages on the facility that contains 
over 100 tons of weapons-grade, highly enriched uranium. We are 
appalled. We are appalled.
    WSI's slow response, lack of regard for security protocols, 
along with their check-the-box mentality is completely 
unacceptable, especially when you take into account the 
sensitive material they are paid to protect against potential 
terrorists and nations, states capable of using deadly force 
during a security breach.
    While I understand that security changes have now been made 
at the Y-12 facility since the incident to ensure that it never 
happens again, we need to seriously review classified DOE 
reports from 2010, that the Washington Post reported on this 
morning, where investigators found, and I am quoting, 
``Security cameras were inoperable, equipment maintenance was 
sloppy, and guards were poorly trained.'' And you knew this 2 
years ago? Two years ago.
    These criticisms are the very same ones that may have led 
to the July 28 security breach. Mr. Chairman, the incident 
demonstrates the great importance of the hearing today. I fully 
believe it is important for the committee to review the entire 
working relationship between the NNSA, DOE, and the security 
contractors across the country at all of our nuclear weapons 
    I yield back.
    Mr. Stearns. The gentlelady's time has expired.
    The gentleman from California, Mr. Waxman, is recognized 
for 5 minutes.


    Mr. Waxman. Thank you, Mr. Chairman. This is one of those 
hearings that we occasionally have in Congress where we say 
together, Democrats and Republicans, we are shocked. We are 
shocked that something like this could happen, but we then 
blame others and don't accept responsibility for ourselves. We 
have oversight jurisdiction in this committee to be sure this 
sort of thing doesn't happen, and we know DOE has oversight 
responsibility, and we expect them to do their job, and you 
would think that reasonable people would understand that this 
is a high priority for this country. This is a wake-up call if 
there ever was one with--this is a quote from the New York 
Times. ``With flashlights and bolt cutters the three pacifists 
defied barbed wire as well as armed guards, video cameras, and 
motion sensors.''
    Well, this security lapse is incredible. We have to do 
everything in our power to ensure that no one else breaches our 
security and particularly that none of our enemies view this as 
an opening, that this will show that this is a weakness that 
they could exploit.
    Well, given this wake-up call you would think members of 
Congress or any reasonable person would suggest that rolling 
back security and safety requirements at the nuclear safety--
NNSA facilities or promoting reducing oversight of these 
facility would be outrageous. They wouldn't think of such of 
thing, yet that is what the Republican Congress did. We have a 
National Defense Authorization Act, H.R. 4310, that passed the 
House in May, and that bill weakens protection for our nuclear 
laboratories and facilities. The bill lowered standards at NNSA 
sites, and they limited the ability of the Department of Energy 
and the Defense Nuclear Facilities Safety Board to address 
concerns and propose solutions to these problems.
    Well, we went along with that, our committee leadership, 
and the Authorization Bill to lower our oversight for these 
kinds of breaches. This effort to weaken oversight of nuclear 
facilities makes absolutely no sense, and this issue most 
recently of our guest today, an 82-year-old nun, breaching the 
security at the sensitive Oak Ridge Nuclear Facility and 
splashing blood on a building that holds enriched uranium 
before she was arrested, illustrates why we need more oversight 
and more activity to stop it, not less. Sometimes I think that 
people are so anxious to save money that they cut off their 
nose to save their face. We need oversight.
    We need to spend the money to do this, and all those people 
who have been telling us we can't afford this and we can't 
afford that because we got to give more tax breaks to the upper 
income ought to think through whether that point of view makes 
sense. We need multiple layers of strong oversight at our 
nuclear facilities. We can't simply assume that NNSA and its 
contractors are making appropriate security and safety 
    That reminds me of Hurricane Katrina. Good job. Great job, 
Brownie, as President Bush said to his appointee who knew 
nothing about emergency preparedness. He was put in his job 
because he was a crony of the President at that time. The 
ability of DOE, this committee, and other oversight experts to 
ask the tough questions is absolutely vital to holding labs and 
facilities accountable. We cannot leave nuclear facilities 
exposed to national disasters or threats from hostile enemies. 
We have to make sure that those who manage nuclear materials 
are putting safety and security first.
    Now, we are lucky that it was just this very nice nun and 
others who came to express their point of view that gained 
access to a secure area next to highly enriched uranium 
facilities. It could have been much worse. We can all view this 
as a warning call. We have to look closely at our nuclear 
facilities. Make sure they are strong, that there are strong, 
effective oversight mechanisms in place to protect them from 
danger. We cannot remove or repeal the protections that already 
are in place.
    Mr. Chairman, there is some things we don't agree on, but I 
think we can all agree that strong oversight of our nuclear 
arsenal and our nuclear facilities and laboratories is an 
absolute necessity, and it is time for Congress not just to 
hold hearings and say, oh, my gosh, what happened, but to 
realize that when we make cuts to this exact kind of 
surveillance, we are going to end up paying the consequences 
for it. Happily the consequences were not as severe as they 
might have been, but let this be a warning call to all of us.
    Yield back my time.
    [The prepared statement of Mr. Waxman follows:]
    [GRAPHIC] [TIFF OMITTED] 85180.004
    [GRAPHIC] [TIFF OMITTED] 85180.005
    Mr. Stearns. The gentleman yields back. I would just say to 
the gentleman this full committee always puts safety and 
security first when we are dealing with this very important 
issue, and it has always been bipartisan.
    With that let me welcome our witnesses here this morning, 
and we have the Honorable Daniel B. Poneman, Deputy Secretary, 
U.S. Department of Energy, the Honorable Thomas P. D'Agostino, 
Under Secretary for Nuclear Security and Administrator, 
Nuclear--National Nuclear Security Administration, U.S. 
Department of Energy, Mr. Glenn S. Podonsky, Chief Health, 
Safety, and Security Officer, Department of Energy, the 
Honorable Gregory H. Friedman, Inspector General, Department of 
Energy, and Mark E. Gaffigan, Managing Director, Natural 
Resources and Environmental Team, Government Accountability 
    As you know, folks, the testimony you are about to give is 
subject to Title XVIII, Section 1001, of the United States 
Codes. When holding an investigative hearing like this, this 
committee has a practice of taking testimony under oath. Do any 
of you object to testifying under oath? No? OK.
    The chair then advises you that under the rules of the 
House and rules of the committee you are entitled to be advised 
by counsel. Do you desire to be advised by counsel during your 
testimony today? No?
    In that case, would you please rise and raise your right 
    [Witnesses sworn.]
    Mr. Stearns. All right, and with that we welcome you, 
again, and you will give your 5-minute summary of your--Mr. 
Poneman, we are going to start with you. Go ahead.



    Mr. Poneman. Thank you, Mr. Chairman, and in the interest 
of time I would request that my full statement be submitted----
    Mr. Stearns. By unanimous consent, so ordered.
    Mr. Poneman. Thank you, sir. Chairman Stearns, Ranking 
Member DeGette, and distinguished members of the subcommittee, 
thank you for the invitation to appear before you today to 
discuss the Department of Energy's oversight of the nuclear 
weapons complex and the recent security incident at the Y-12 
National Security Complex. We appreciate the interest and 
engagement of this committee and recognize the important 
oversight role that you fulfill. We also share the committee's 
commitment to ensure that all of our offices and operations are 
delivering on our mission safely, securely, and in a fiscally 
responsible manner.
    Since its creation in 1999, the National Nuclear Security 
Administration has served as a separately organized entity 
within the U.S. Department of Energy, entrusted with the 
execution of our nuclear security missions. Living up to the 
challenging demands of executing our mission safely, securely, 
and in a fiscally responsible manner requires daily management 
through strong, effective, and efficient relationships with our 
management and operating contractors. Congressional oversight, 
in conjunction with oversight by the DOE Office of Health, 
Safety, and Security, our internal independent oversight body, 
as well as that of the DOE Inspector General, the Defense 
Nuclear Facilities Safety Board, and the Government 
Accountability Office contribute to the safety and security of 
DOE facilities.
    As the recent incident at Y-12 demonstrates, the Department 
has at times fallen short of our own expectations and faces 
continuing challenges in our goal of continuous improvement. 
This recent incident, as the Secretary has made abundantly 
clear, is unacceptable, and we have taken and will continue to 
take steps not only to identify and correct issues at Y-12 but 
across the DOE complex.
    In response to this incident, we acted swiftly to identify 
and address the problems that it revealed. These actions either 
directly or through the contract for the site included the 
following immediate steps to improve security. In the realm of 
physical protection, cameras have been repaired and tested, 
guard patrols increased, security policies have been 
strengthened, and all personnel have been retrained on security 
procedures. The number of false and nuisance alarms have been 
greatly reduced to provide more confidence in the intrusion 
detection system.
    In terms of the professional force onsite, nuclear 
operations at the site were suspended until retraining and 
other modifications mentioned above were completed. The entire 
site workforce was required to undergo additional security 
training. The former head of security from our Pantex facility 
moved to Y-12 to lead the effort to reform the security culture 
at the site.
    The Department's Chief of Health, Safety, and Security was 
directed to deploy a team to Y-12 for an independent 
inspection. Site managers at all DOE facilities with nuclear 
material were directed to provide their written assurance that 
all nuclear facilities are in full compliance with Department 
security policies and directives as well as internal policies 
established at the site level. Security functions at the Y-12 
site itself had been brought into the management and operations 
contract to ensure continuity of operations and moving toward 
an integrated model moving forward.
    In the area of leadership changes, the plant manager and 
chief operating officer at the site retired 12 days after the 
incident. Six of the top contract executives responsible for 
security at the Y-12 site had been removed. The leadership of 
the guard force has been removed, and the guards involved in 
this incident have been removed or reassigned. The Chief of 
Defense Nuclear Security for the National Nuclear Security 
Administration has been reassigned pending the outcome of our 
internal reviews, and a formal show cause letter was issued to 
the contractor that covered the entire scope of operations at 
Y-12, including security. This is the first step towards 
potentially terminating the contracts for both the site 
contractor and its security subcontractor. Past performance 
including deficiencies and terminations would be considered in 
the awarding of any future contracts.
    In the area of reviews, the HSS Organization that Ms. 
Podonsky leads was directed to lead near-term assessments of 
all Category 1 nuclear material sites to identify any systemic 
issues, enhancing independent oversight performance testing 
program to incorporate no notice or short notice security 
testing and conducting comprehensive, independent oversight 
security inspections at all Category 1 four sites over the next 
12 months using the enhanced program of performance testing. An 
assessment was initiated led by Brigadier General Sandra Finan 
to review the oversight model itself and the security 
organizational structure at NNSA headquarters that some of the 
members have already commented in their opening remarks.
    The series of personnel and management changes that I have 
just briefly outlined were made to provide the highest level of 
security at the site and across the DOE complex. To manage this 
transition we have brought some of the best security experts 
from our enterprise to Y-12 to act quickly to address the 
security shortcomings at that site.
    We are also working to make the structural and cultural 
changes required to appropriately secure this facility. The 
Secretary and I intend to send a clear message. Lapses in 
security will not be tolerated. We will leave no stone unturned 
to find out what went wrong, and we will take the steps 
necessary to provide effective security at this site and across 
our enterprise.
    Mr. Chairman and distinguished members of this committee, 
safety and security are integral to the Department's mission. 
DOE embraces its obligation to protect the public, the workers, 
and the environment. We continuously strive to improve upon our 
safety and security standards and the policies that guide our 
operations, and we hold line management and ourselves 
    Thank you for the opportunity to discuss this vital 
mission. I look forward to answering your questions both here 
and in a classified setting as appropriate.
    [The prepared statement of Mr. Poneman follows:]
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    Mr. Stearns. Thank the gentleman.
    Mr. Gaffigan, your opening statement.


    Mr. Gaffigan. Mr. Chairman, Ranking Member DeGette, members 
of the subcommittee, good morning. I am pleased to be here to 
discuss safety, security, and project management oversight of 
the nuclear security enterprise. In summary, in each of these 
areas I would like to briefly discuss some of the challenges, 
the current status and progress in these areas, and some 
potential paths forward.
    Regarding safety, let me start by noting that thankfully 
through the efforts of DOE, NNSA, and its contractors, the 
stockpile has remained safe and reliable. However, safety 
problems do occur, and we have identified them in the past. We 
have attempted to find the contributing factors to these 
problems and note that they fall into three key areas; lax 
attitudes towards safety procedures, inconsistent and 
unsustained corrective actions, and inadequate oversight.
    Currently, DOE has instituted a safety reform effort to 
review opportunities to streamline requirements and eliminate 
directives that do not add value to safety. While we applaud 
DOE's efforts to improve safety requirements, going forward we 
believe that DOE can make a stronger case in safety reform by 
ensuring that changes are based on sound analysis of the 
benefits and costs with good measures of their success.
    In addition, future efforts should strive to address areas 
of concern in quality assurance, safety culture, and 
independent Federal oversight.
    Regarding security, our work in the past has sought to 
understand past failures that have led to security incidents 
that have posed the most serious threat to national security 
and led to shutdowns of facilities like Los Alamos and Lawrence 
    Both GAO and the DOE IG have identified common themes that 
led to these problems, including an over-reliance on contractor 
assurance and corrective actions that are not sustained.
    As with safety, DOE has instituted a security reform effort 
to ensure effective, streamlined, and efficient security 
without excess Federal oversight. While there may be 
opportunities for more efficient security policy and oversight, 
our past work has shown that excessive Federal oversight is not 
the problem.
    As demonstrated by the July incident at Y-12, the recent IG 
report cites and all-to-familiar finding that contractor 
governance and Federal oversight failed to identify and correct 
early indicators of multiple system breakdowns that allowed the 
security breach.
    While DOE and NNSA are undertaking many actions in response 
to this incident, the real challenge going forward is to 
sustain the security improvements that will invariably be made 
at NNSA sites. This will require leadership, improved 
contractor assurance systems, and strong, independent Federal 
    Lastly, regarding project management, NNSA continues to 
experience significant costs and schedule overruns on its major 
construction projects. To name a few, the National Emission 
Facility at Lawrence Livermore, a $2.1 billion original 
estimate grew to $3.5 billion and was 7 years behind schedule. 
CMMR, Chemistry and Metallurgy Research Replacement Nuclear 
Facility at Los Alamos originally projected to cost less than 
$1 billion. The last estimate before this project was put on 
hold was $3.7 to $5.8 billion, a six-fold increase with a 
scheduled delay of 8 to 12 years.
    This is why NNSA project management is on GAO's high-risk 
list. We believe that NNSA has made some progress. We believe 
they have a strong commitment and top leadership support and 
have developed and implemented corrective action plans to 
address these concerns. Going forward we believe NNSA needs to 
demonstrate its commitment to sufficient people and resources 
and demonstrate on a sustained basis the ability to complete 
major construction projects on time and on budget.
    However, not to be forgotten, 80 percent of NNSA's budget 
is devoted to operations and maintenance activities and is not 
construction related. We recently raised concerns with NNSA's 
process for planning and prioritizing its work, including the 
need to more thoroughly review program estimates. We have 
recommended going forward that they update the requirements for 
review and cost estimates and reestablish independent analytic 
    Mr. Chairman, that concludes my opening remarks. I would be 
happy to address any questions you or the members may have.
    [The prepared statement of Mr. Gaffigan follows:]
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    Mr. Stearns. I thank the gentleman, and Mr. Friedman, 
welcome, again, for your opening statement.


    Mr. Friedman. Chairman Stearns and Ranking Member DeGette 
and members of the subcommittee, I am pleased to be here at 
your request to testify on matters relating to the oversight of 
the nuclear weapons complex by the Department of Energy and the 
National Nuclear Security Administration.
    With an annual budget of nearly $12 billion, NNSA----
    Mr. Stearns. I am just going to ask you to move your mic a 
little closer if you don't mind.
    Mr. Friedman. Certainly. NNSA is charged with critically 
important missions relating to nuclear weapons refurbishment 
and storage, nuclear non-proliferation, and science and 
technology. The directors of NNSA's contractor operate at 
national security laboratories Los Alamos, Lawrence Livermore, 
and Sandia, as well as other independent review groups have 
expressed concern with the Department and NNSA oversight of 
contractors is overly burdensome. They recommended changes in 
the model, with the most radial being to take NNSA outside of 
the Department's purview entirely.
    We recognize and I think everybody should that it is 
difficult to strike precisely the right balance between the 
contractors' desire to operate without undue oversight and the 
government's need to ensure the taxpayers' interests and the 
operation of the laboratories and the other facilities is 
protected. We agree that oversight should not be overly 
burdensome. It should be targeted, cost effective, risk based, 
and it should encourage intelligence risk tolerance.
    However, at the end of the day responsible Federal 
officials have an obligation to a higher authority, the U.S. 
taxpayers, to ensure that the terms and conditions of the 
various NNSA contracts are satisfied, the national security 
mission goals are met, and that the weapons complex is operated 
in an effective, efficient, and safe and secure manner. Our 
reviews have identified numerous opportunities to advance 
various aspects of NNSA's functions, including its management 
of the national security laboratories and other weapons complex 
    Most prominently, we recently issues a special inquiry 
report on the security breaches, security breach, excuse me, at 
the Y-12 national security complex at Oak Ridge, Tennessee. You 
heard about that previously from prior speakers. In the Y-12 
report we cited delayed and inept response, inoperable security 
equipment, excessive use of compensatory measures, resource 
constraints, and most importantly as it pertains to the purpose 
of this hearing, contract administration issues.
    We have no evidence, empirical or otherwise, to suggest 
that unreasonable Department and NNSA oversight has had a 
causal relationship to the problems we identified in our 
reviews. In fact, in many cases, the Y-12 matter being a prime 
example, we found the Department and NNSA had not been as 
thorough as we felt necessary in exercising the contract 
administration responsibilities.
    Further, NNSA is currently dealing with a number of cost, 
schedule, and mission issues concerning major projects, 
including over $13 billion in capital investments in the 
projects that Mr. Gaffigan just referred to. With projects of 
such magnitude and complexity, Federal officials have a special 
responsibility to ensure that taxpayer dollars are well spent 
and the national security is protected.
    Further, the unique contractor indemnification provision of 
NNSA's Management Operating Contracts place special burdens on 
the Federal management team. In short, the Department bears 
ultimate financial responsibility for essentially all 
contractor activities which are nuclear related. In my judgment 
this argues for a robust contractor oversight.
    There are a number of threshold questions regarding 
oversight, the oversight model which have yet to have been 
answered from my perspective. For example, to what extent does 
current oversight hinder mission accomplishment? How would a 
new model lead to tangible improvements in scientific and 
technological outcomes? And how would a new model improve 
accountability and transparency?
    In our view any decision to modify the NNSA Weapons Complex 
Governance Model should ensure that first, historic safety and 
security concerns regarding weapons complex management are 
treated as a priority. Second, the synergies that result from 
numerous collaborations between the national security 
laboratories and the Department's other laboratories and energy 
functions are not impeded. Third, expectations of the 
contractors are as clear and precise as possible. Fourth, that 
metrics are in place to provide a sound basis for evaluating 
contractor and program performance. Fifth, that any new 
operating formulation is lean and mean, reflecting current 
budget realities, and finally, that contractors have in place 
an effective internal governance system.
    We support continuous improvement, but a scalpel rather 
than a cleaver approach ought to guide efforts to find better 
NNSA contractor oversight mechanisms. The problems with the 
status quo need to be well-defined, all remedies cost 
effective, and the core mission maintained. The work of the 
NNSA and its weapons complex is too important to do anything 
    This concludes my testimony, and I look forward to your 
    [The prepared statement of Mr. Friedman follows:]
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    Mr. Stearns. Thank you, and I will start with my questions.
    Just as an overview I think everyone should understand Y-12 
is a connotation given to this site because of the Cold War, 
and they didn't want to have people mention geographically what 
they were talking about, where it was, so Y-12 became the code 
    But if you go on Google maps and look at the site, you see 
that it is a brand-new site, and if you go onto Microsoft site, 
you see it is under construction. So this really is a site that 
has brand-new construction.
    And so, Mr. Friedman, the first question I have for you is 
as I understand it, these people cut and got their way through 
three fences. Is that correct?
    Mr. Friedman. That is my understanding, Mr. Chairman. Yes.
    Mr. Stearns. OK, and so is it three or four fences?
    Mr. Friedman. Well, my understanding is it is three. There 
are people on the panel who may have more intimate knowledge 
than I do.
    Mr. Stearns. OK. We appreciate your hand being up, but we 
are limiting ourselves to the panel, if you don't mind.
    Mr. Friedman. Well, people on the panel.
    Mr. Stearns. Yes. Is there anyone else who--yes, sir. Mr. 
    Mr. Poneman. Sir, there is an outer perimeter fence----
    Mr. Stearns. OK.
    Mr. Poneman [continuing]. At the ridgeline. They call it 
the 229 fence.
    Mr. Stearns. OK.
    Mr. Poneman. That is not sensored. Then there were the 
three PIDAS----
    Mr. Stearns. OK. So they actually went through four fences.
    Mr. Poneman. They would have had to come through the 
perimeter, yes, and then there were the three----
    Mr. Stearns. OK.
    Mr. Poneman [continuing]. PIDAS fences----
    Mr. Stearns. So once they go through these four fences, it 
is assuming that all these fences there is some type of sensor 
device which would indicate--and there would be cameras. Is 
that true, Mr. Friedman?
    Mr. Friedman. That is correct.
    Mr. Stearns. So there are cameras set up to monitor this?
    Mr. Friedman. That is correct.
    Mr. Stearns. And how highly rated was Y-12 security prior 
to this incident? I mean, what was the record they were saying 
it was rated?
    Mr. Friedman. The contractor self-assurance indicated that 
it was highly rated, and that was carried through----
    Mr. Stearns. I was told it was rated by the contractor 
    Mr. Friedman. The Federal personnel endorsed that rating.
    Mr. Stearns [continuing]. At 96 percent. Is that what--I 
was told that was what they rated it.
    Mr. Friedman. I don't have a percentage for you, Mr. 
    Mr. Stearns. Would you consider it a Fort Knox type of 
security? I mean, that was the perception is, it had to be Fort 
Knox type of security?
    Mr. Friedman. Mr. Stearns, this is my nearly 40 years in 
the Department of Energy. Y-12 was the Fort Knox of the 
    Mr. Stearns. OK. So they, these folks in the audience here, 
the three of them, they got through four fences that were 
sensored, and the cameras were all set up, and this was a new 
facility. Were the cameras new or old?
    Mr. Friedman. There were actually--some of the equipment 
was fairly new, some of the equipment was old, but the, I think 
the salient point is that many of the cameras or some of the 
cameras were not operable and not operable----
    Mr. Stearns. OK. So the cameras were not----
    Mr. Friedman [continuing]. For some period of time.
    Mr. Stearns [continuing]. Operable. Now, when you generally 
have a Fort Knox facility like this, wouldn't there be large 
maintenance records for these cameras that people would check 
them? Were there backlogs relating to these cameras?
    Mr. Friedman. There were significant, we found significant 
backlogs and maintenance of----
    Mr. Stearns. Were there large maintenance entries into 
these backlogs to show that they were, the cameras were looked 
    Mr. Friedman. I am not sure I understand your question, Mr. 
    Mr. Stearns. Well, if you went into these backlogs that 
show the maintenance on these cameras----
    Mr. Friedman. Right.
    Mr. Stearns [continuing]. Did you see maintenance on these 
    Mr. Friedman. Well----
    Mr. Stearns. You are saying they are inoperable. Wouldn't 
at some point somebody----
    Mr. Friedman. Maintenance had not taken place.
    Mr. Stearns. OK.
    Mr. Friedman. The cameras had not been fixed----
    Mr. Stearns. OK.
    Mr. Friedman [continuing]. If that is your question.
    Mr. Stearns. OK. Well, how long were these cameras, these 
critical cameras not operable? Could you tell that?
    Mr. Friedman. Well, we--there were elements of the security 
apparatus that were inoperable for at least 6 months and 
probably--and possibly beyond that. At least 6 months.
    Mr. Stearns. Now, who would you blame that for? The 
contractor or the site government operators?
    Mr. Friedman. Well, Mr. Chairman, it is--that sounds like a 
very simple question, but it is a complex, the answer is 
somewhat complex.
    Mr. Stearns. Well, let me phrase it for you.
    Mr. Friedman. There is enough--let me put it this way.
    Mr. Stearns. Do you think the responsibility--we pay 
contractors to do this. Is that correct?
    Mr. Friedman. Correct.
    Mr. Stearns. And the contractors were responsible?
    Mr. Friedman. Correct.
    Mr. Stearns. And we pay them significant fees? We do this, 
and they were not operable, and the maintenance backlogs show 
that no one was doing anything, so wouldn't you say the 
    Mr. Friedman. I would say they have a major share of 
responsibility. Yes.
    Mr. Stearns. And then the onsite government employees who 
are overseeing the contractors also have responsibility because 
they failed to catch this. Is that correct?
    Mr. Friedman. They do. There was widespread knowledge and 
acknowledgement of the fact that these cameras, including 
amongst the Federal officials, that these cameras in other 
facilities were inoperable. I think their reaction to that was 
much too passive, much too lethargic.
    Mr. Stearns. Well, I think we have got them through four 
fences, we have got them through the sensing devices. We are 
not keying the personnel. The cameras were inoperable, so they 
got through, and as I understand there was a period of time 
where these three people were right at the facility and nothing 
still happened. Is that true?
    Mr. Friedman. Well, there was a delay in the response and--
    Mr. Stearns. How long was the delay in response?
    Mr. Friedman. I can't go into timeline.
    Mr. Stearns. OK.
    Mr. Friedman. You may be able to get that information at 
the later classified briefing.
    Mr. Stearns. All right. So at this point we have obviously 
a dereliction of duty. Is there anyone on the committee that 
would like to add any questions, any response to some of my 
questions that I had?
    Mr. Poneman.
    Mr. Poneman. Sir, just for the record, it is my 
understanding, we will confirm this, you talked about all four 
senses being--fences being sensored. It is my understanding 
that there are no trespassing signs on the outer perimeter 
fence at the ridge line, but the sensors only come into play 
once you penetrate the first of the three fences that surround 
the actual facility. So I believe it would be fair to say 
that--and the sensor bed is inside those three fences, not out 
at the perimeter fence. But we will confirm that and come back 
to you.
    Mr. Stearns. Were the guards who were supposed to be there 
and take care and stop this, were they blind in any way? Was 
there any obstruction for them to see this? I mean, forget the 
cameras for a moment. Wouldn't you start to at some point say, 
gosh, what is happening? I am starting to see three people in 
my facilities wandering around. I mean, where were the guards? 
Were they--Mr. Friedman, what is your interpretation?
    Mr. Friedman. As has been either implied or stated directly 
earlier, there were a huge number of false alarms ongoing on a 
regular basis. They are due to critters and squirrels and other 
things, so they were somewhat from my point of view numb to the 
number of false alarms. There was a delay in the response. The 
response of the first responder was less than adequate, so 
there was a--certainly shortcomings on the part of the----
    Mr. Stearns. OK. My time has expired.
    Ms. DeGette. Thank you, Mr. Chairman. I think your 
questions really set up a factual foundation for what I want to 
talk about.
    The first thing I want to do is I want to thank Sister Rice 
and the other people for coming today. I apologize. You won't 
be allowed to testify. I think it would be interesting to hear 
your perspective on how you were able to breach these four 
fences at the Fort Knox type of facility and perhaps we can 
talk afterwards.
    But what I want to ask you gentlemen about is from my 
perspective this bill that we passed earlier this year, the 
National Defense Authorization Act, which is H.R. 4310, because 
what that does, as you know, it makes considerable changes to 
NNSA's structure and its oversight relationship with DOE. And a 
lot of us on both sides of the aisle are really concerned that 
the changes will have a significant impact on safety and 
security at NNSA.
    So, Mr. Poneman, I wanted to start with you, and I wanted 
to ask you how H.R. 4310 changes the NNSA Administrator's 
authority to change nuclear safety and security requirements.
    Mr. Poneman. Congresswoman, thank you for the question. It 
is our understanding that that legislation makes significant 
changes in the reporting structure and the authorities within 
the Department, that it significantly curtails the authority of 
the Secretary to direct the Administrator of the NNSA and that 
it provides for a number of things that would tend to delegate 
activities, for example, to a national lab director's counsel 
and so forth, that would then come in directly to the 
Administrator, and the Administrator under that legislation as 
we understand it would be granted much widened autonomy.
    Ms. DeGette. Right.
    Mr. Poneman. In addition, the Defense Nuclear Facilities 
Safety Board would be reduced in some of its authorities.
    Ms. DeGette. And that would really undermine the DOE's 
authority for oversight. Correct?
    Mr. Poneman. In our judgment, Congresswoman, as reflected 
in the statement of----
    Ms. DeGette. Yes or no will work.
    Mr. Poneman. Yes.
    Ms. DeGette. Thank you. Now, as the current language is 
written, I think you mentioned this, somewhere down the line an 
NNSA Administrator could come in and actually reduce the safety 
and security requirements. Correct?
    Mr. Poneman. It would curtail the Secretary's authority 
    Ms. DeGette. But they could actually reduce the 
requirements. Correct? Under the legislation.
    Mr. Poneman. I think that became law. Yes.
    Ms. DeGette. OK. Yes. Now, H.R. 4310 also changes NNSA's 
relationship with oversight bodies, including DOE's Office of 
Health, Safety, and Security and the Defense Nuclear Facilities 
Safety Board.
    So, Mr. Poneman, maybe Mr. Podonsky can help you here. Can 
you talk to me about what changes it makes to NNSA's 
relationship with the DOE and independent oversight bodies?
    Mr. Poneman. What changes the legislation----
    Ms. DeGette. Correct.
    Mr. Poneman. It would grant a much larger measure of 
autonomy to NNSA within the DOE system. The DOE system includes 
the HSS organization that Mr. Podonsky leads.
    Ms. DeGette. OK. Now, do you think that is a good idea to 
reduce NNSA oversight? Yes or no will work.
    Mr. Poneman. We have serious concerns----
    Ms. DeGette. OK.
    Mr. Poneman [continuing]. With the legislation.
    Ms. DeGette. Do you think that if the bill is passed as is, 
it could have an impact on the security and safety of workers 
at NNSA sites?
    Mr. Poneman. If the authorities of the Secretary are 
curtailed in that way, it could have an adverse effect.
    Ms. DeGette. OK. Now, Mr. Gaffigan, I am not asking you to 
comment on the NDAA, but your testimony said, your written 
testimony said in 2007, the GAO concluded that the drastic 
change of moving NNSA away from DOE was, ``unnecessary.'' Is 
that correct?
    Mr. Gaffigan. That is correct.
    Ms. DeGette. And so from your perspective is a significant 
overhaul of the agency structure necessary to solve the 
problems we are seeing today? Yes or no will work?
    Mr. Gaffigan. Not necessarily.
    Ms. DeGette. OK.
    Mr. Gaffigan. We have to focus on----
    Ms. DeGette. So you don't think we necessarily need a 
significant overhaul. Right?
    Mr. Gaffigan. We have not seen the problem of being 
excessive oversight. We have seen the problem being ineffective 
    Ms. DeGette. Ineffective. Yes. Less oversight is not the 
solution here. Right?
    Mr. Gaffigan. We have not seen excessive oversight as the 
    Ms. DeGette. OK. Mr. Friedman, what do you think? Would 
reorganizing the NNSA so that contractors have more autonomy 
and less oversight solve the problems of the agency?
    Mr. Friedman. Well, Ms. DeGette, I would characterize it as 
the tail wagging the dog frankly. I think that it would be a 
mistake to dramatically lessen the quality of the oversight.
    Now, there are, as I have indicated in my testimony, there 
are improvements, and intelligent oversight is extremely 
important. So there are improvements that can occur----
    Ms. DeGette. Right.
    Mr. Friedman [continuing]. But I think the legislation that 
you are referring to goes too far.
    Ms. DeGette. So I just have kind of one last question, and 
I am going to ask you, Mr. Friedman, and you, Mr. Gaffigan. Do 
you think that really burdensome oversight caused Sister Rice 
and her colleagues to be able to gain access to a secure area 
at a nuclear facility?
    Mr. Friedman. Well, as----
    Ms. DeGette. Yes or no. Do you think the reason she got in 
there was because there was too much oversight?
    Mr. Friedman. Clearly not.
    Ms. DeGette. OK.
    Mr. Friedman. No.
    Ms. DeGette. Mr. Gaffigan?
    Mr. Gaffigan. No. No.
    Ms. DeGette. Thank you. Thank you very much, Mr. Chairman.
    Mr. Stearns. I thank the gentlelady.
    Mr. Barton, the former chairman of the full committee, is 
    Mr. Barton. Thank you. The--I had to go do a little press 
interview while the chairman was doing his questions, but my 
understanding is he established that there were four fences 
that were breached. Is that correct?
    Mr. Poneman. Yes, sir.
    Mr. Barton. OK. Were they all chain-linked fences?
    Mr. Poneman. Yes, sir.
    Mr. Barton. All chain-linked fences. Is it classified how 
long that took?
    Mr. Poneman. Yes, sir.
    Mr. Barton. It is classified? Were there any cameras that 
were operable? We know that there are some that weren't.
    Mr. Poneman. Yes, sir.
    Mr. Barton. Were there some that were?
    Mr. Poneman. There were cameras at the site that were 
    Mr. Barton. They just weren't where these people were doing 
their thing. Let us assume that we actually had good security. 
What would have happened had it been discovered that these 
three individuals were trying to get in the facility?
    Mr. Poneman. The sensored part of the fences are the three 
fences that are relatively close to the facility, Congressman. 
If the system had worked properly, as soon as they penetrated 
the first link, the sensor would have gone off, and when they 
saw as would be the case when people were coming through, that 
there were multiple sensors going off, there would have been an 
immediate response within 1 or 2 minutes of guards on the site.
    Mr. Barton. So even if it had been working and the guards 
had been alert and everything that was supposed to have been 
done would have been done, they would have been able to get 
through the first fence before anything was done. Is that 
    Mr. Poneman. Yes, sir. The theory is one of layered 
defenses, and we could go into classified session. There are 
many, many layers between that outer-most security fence and 
the sensitive material but----
    Mr. Barton. Well, I am----
    Mr. Poneman [continuing]. That would be what triggered the 
    Mr. Barton [continuing]. Not a security expert, but I would 
assume that we would have a security system at a weapons 
complex or an enrichment facility that if anybody got within 10 
feet of the first fence, alarms would start going off and dogs 
would start barking and loud speakers would say, get away, get 
away or something like that instead of letting them actually 
walk up to fence, use a pair of wire cutters, and cut the fence 
before anybody even assumes that there is something wrong. I 
mean, that seems to me to be a little bit lax. Am I just not 
with it to think that we shouldn't even let them get near the 
first fence?
    Mr. Poneman. When you walk into the facility, Congressman, 
you have to establish the perimeter in some specific place, and 
you have to put the first sensor in some specific place. That 
sensor is placed in such a manner as if it had been responded 
to appropriately before they were able to do anything at the 
wall, there would have been security forces on site. So you 
have to put the first sensor somewhere.
    Mr. Barton. But my point is you don't let them get close 
enough to take out the wire cutters without somebody noticing 
you. If I were to go to the facility today with a pair of wire 
cutters, hat on that says I am a fake terrorist, I would hope 
somebody would notice that before I started cutting on the 
    Mr. Poneman. Well, I assure you, Congressman, we are taking 
a full review of the full profile. You could see if doing 
something at the outer perimeter fence up at the ridge line 
would be better, but then you are talking about acres and acres 
of security, which is challenging.
    Mr. Barton. You--is the deputy secretary at the Department 
of Energy the number two official?
    Mr. Poneman. Yes, sir.
    Mr. Barton. So you--the Secretary is number one, and you 
are number two?
    Mr. Poneman. Yes, sir.
    Mr. Barton. Could you rank this issue in a priority of 
issues at the Department of Energy for management attention of 
you and the Secretary? Is this a top five issue, a top ten 
issue, top 100 issue?
    Mr. Poneman. Congressman, there is no issue that we are 
dealing with more forcefully and with greater concentration 
than this issue. This is protecting our nuclear material. It 
has top priority.
    Mr. Barton. So this has got the personal serious attention 
of you and the Secretary?
    Mr. Poneman. Hours and hours.
    Mr. Barton. OK, and the gentleman to your right, Mr. 
D'Agostino. Is that close?
    Mr. D'Agostino. Mr. Barton, D'Agostino.
    Mr. Barton. D'Agostino.
    Mr. D'Agostino. Yes, sir.
    Mr. Barton. I would assume that on a day-to-day basis you 
are the person in--ultimately responsible for this at the 
Department, at the--I know you are at the Nuclear Security 
Administration, but I would assume that you are the number one 
person in terms of just thinking about this. Is that correct?
    Mr. D'Agostino. Every day since--every day I think about 
this issue and specifically but every day I also think about 
security in general. This is the number one priority for me. 
Bar none.
    Mr. Barton. Do you believe since it is your number one 
priority that we can fix this problem?
    Mr. D'Agostino. I believe we can fix it. We have work to 
do. It is inexcusable. It is appalling. The language the 
committee has used here I would agree with. We have to work 
aggressively. We have taken unprecedented steps to address this 
particular problem. It is important to hold organizations 
accountable. It is important to hold people accountable for 
this, and we are working through that particular process.
    In addition to the steps we have taken, we believe there 
are more steps to take, and we are working very closely with 
Glenn Podonsky and the HSS organization to make sure we 
actually have that right.
    Mr. Barton. My time has expired, but I want to ask one 
more. Is it possible under current policy at the Department of 
Energy to terminate the contractor who allowed this to happen?
    Mr. Poneman. Sir, we--because of this incident issued what 
we call a show-cause notice to the contractor, which gives them 
a set period to respond. Given the facts that are inconsistent 
with our contractual responsibility to provide security, to 
show cause why the contract should not be terminated.
    Mr. Barton. So the answer is yes, they can be terminated.
    Mr. Poneman. Yes, sir.
    Mr. Barton. OK. Thank you, Mr. Chairman.
    Mr. Stearns. The chairman emeritus was really asking the 
question, I will ask it for him, has anyone been fired because 
of this incident?
    Mr. Poneman. Sir, there have been a number of personnel 
changes. The way the structure----
    Mr. Stearns. No one has been fired, though?
    Mr. Poneman. Oh, no, no, no. There have been a number of 
changes. The two top contractor officials at the site retired 
within 12 days.
    Mr. Stearns. OK.
    Mr. Poneman. A number of other people have been moved out 
of their positions, from the guard force to the contractor as 
    Mr. Stearns. It doesn't sound like anybody has been fired.
    Ms. Christensen, you are recognized for 5 minutes.
    Mrs. Christensen. Thank you, Mr. Chairman. I am going to 
direct my questions at Mr. Poneman, but I would believe that 
Mr. Podonsky might be able to assist in answering.
    The DOE's office of Health, Safety, and Security has been 
able to identify major security flaws within several DOE 
nuclear facility sites through the various security and safety 
oversight inspections that it conducts.
    So, Mr. Poneman, can you talk briefly about the inspections 
the Office of Health, Safety, and Security is currently doing 
across the DOE complex?
    Mr. Poneman. Yes, Congresswoman. We highly value their role 
as our internal independent oversight organization, and 
therefore, the Secretary directed Mr. Podonsky to, A, dispatch 
a team immediately to Y-12; B, to assemble a team that draws 
from other parts of the Department to make sure all of the 
sites in the complex that have Category 1 nuclear materials are 
looked at quickly to see if there are any urgent changes that 
we need to make in other sites; and then the third thing we 
have asked Mr. Podonsky to do is an in-depth, what we call a 
comprehensive inspection by his oversight organization, which 
will take 3 weeks at each of the 12 sites and over the course 
of 12 months do a deep drive, force-on-force testing and make 
sure if there are deeper problems that need to be addressed 
that we can do that.
    Mrs. Christensen. OK, and Mr. Chairman, these assessments 
will certainly be helpful to the committee and perhaps we could 
have DOE come back to us once they have finished those 
    So what kind of inspections did HSS do at Y-12 facility 
before, and what did they find?
    Mr. Poneman. I think I would let Mr. Podonsky address that.
    Mr. Podonsky. Yes, ma'am. In 2008, we did what we call a 
comprehensive security inspection. By definition comprehensive 
means that we do force-on-force, limited scope performance 
testing, we look at personnel security, protection program 
management, physical security systems, material control 
accountability. We look at the entire kaleidoscope of security 
subjects to make sure that we know how effective the 
requirements are being implemented. It is not just an 
inspection to make sure that people are complying, but we also 
take a look to see how they are performing, and it was in that 
inspection that we identified a number of serious problems that 
resulted in findings that the NNSA, according to DOE orders, 
would then be responsible for fixing and putting a corrective 
action plan in place, which they did. Many of those findings, 
we believe, if they were completely fixed and maintained, then 
perhaps the events that occurred in July of 2012 would not have 
    Mrs. Christensen. So when did that take place?
    Mr. Podonsky. That was in 2008, and the report was issued 
in 2009.
    Mrs. Christensen. So you don't believe that all of the 
vulnerabilities were addressed, or they were addressed but not 
    Mr. Podonsky. In all fairness they were addressed in 2009, 
they put together the corrective actions, but then as 2010, 
2011, we believe they deteriorated.
    Mrs. Christensen. Is there any reason that we should be 
worried about other facilities that may be susceptible to 
similar breaches?
    Mr. Podonsky. We should always be looking for improvements, 
Congresswoman, and that is why the Deputy and the Secretary 
directed us to go out and do immediate comprehensive 
inspections of all of our Category 1 facilities.
    Mrs. Christensen. Thank you. The August IG report revealed 
that several of the security mechanisms in place at the Y-12 
facility, if functioning properly, would have allowed personnel 
to quickly identify and locate the intruders. Mr. Friedman, can 
you tell us what those mechanisms were?
    Mr. Friedman. Well, the cameras are a perfect example. They 
have been discussed already during the hearing. They should all 
have been fully functioning, and the maintenance process should 
have been such that high priority maintenance, high priority 
security components would have been repaired within a very 
short period of time, if, in fact, they were--they broke down 
for any--or became inoperable for any reason.
    Also, we found another was compensatory measures. The 
compensatory measures are implemented when there is a 
mechanical failure. They were in place for much too long, and 
therefore, they lost their character as a short-term measure to 
address a problem in the immediate term but not the long term 
as it was intended.
    Mrs. Christensen. And who is responsible for that, for 
maintaining the cameras? Was it the contractor, was it----
    Mr. Friedman. Well, the contractor had primary 
responsibility, but there certainly was responsibility on the 
part of the site officials, the Federal site officials as well.
    Mrs. Christensen. Well, you know, the incident, as has been 
said, makes it clear that independent DOE oversight of NNSA and 
its contractors is very important, and I look forward to seeing 
the outcome of DOE's inspections throughout the nuclear complex 
and the actions taken in response to these inspections.
    Thank you, Mr. Chairman. I yield back.
    Mr. Stearns. Thank the gentlelady.
    Mr. Terry from Nebraska is recognized for 5 minutes.
    Mr. Terry. Thank you, Mr. Chairman, and first I just want 
to say that I appreciate the gentlelady, Diane DeGette's 
questions about some legislative language, and I happen to 
agree with her position, and I think most of us do, that we 
need more oversight, efficient oversight, force-on-force. I 
mean, we can't do enough here to make sure that they are 
secure. So we have to change a culture.
    But I want to go back to the cameras, because as I 
understand security, it isn't that sensors are number one and 
then cameras are number two, and there is kind of list that you 
go down. Sensors and cameras are part of the same. They are 
yin, and they are yang. Sensors go off, you view the cameras to 
see what is occurring. So I think that would be critical, but 
yet it was deemed not to be critical. Is that correct, Mr. 
    Mr. Poneman. Yes, sir. On both points. It is critical, and 
it was not deemed to be critical.
    Mr. Terry. Yes, and so how long were--I don't know if we 
established how long the cameras were not operating, how many 
weeks, days, months.
    Mr. Poneman. In at least one instance the IG report noted 
the camera was broken on the order of 6 months.
    Mr. Terry. Six months.
    Mr. Poneman. Yes, sir.
    Mr. Terry. Six months for something that universally at 
this table you would deem cameras as critical.
    Mr. Poneman. Yes, sir, and indeed----
    Mr. Terry. Someone there made a decision that they weren't 
critical. Who was that, or what entity makes that decision?
    Mr. Poneman. That was something that would have been in the 
hands of the M&O contractor to propose what----
    Mr. Terry. It would be a guess.
    Mr. Poneman [continuing]. And what is not and then it would 
be up to the Federal oversight to be cognizant of that and to 
be allowing it to continue.
    Mr. Terry. I appreciate it. Did you want to say something?
    Mr. D'Agostino. No, just--I was making sure my microphone 
was off because I thought I saw the light on. I wanted--I agree 
with--the Deputy Secretary said it absolutely right. We have a 
contract with our M&O contractor down in Y-12 to take care of 
this equipment, put it on a high priority. The camera 
maintenance was not prioritized to be fixed. Our Federal 
oversight should have caught that. That information as it is 
floated in reports and oversight from the program side in 
Washington should have been able to pick that data out. As the 
Inspector General said, there were indicators in our reports, 
but when there are too many indicators, the real indicator gets 
lost in the noise, and so the important thing here is on 
oversight, in my opinion, and I do greatly----
    Mr. Terry. That is what we want.
    Mr. D'Agostino. Yes, sir. That we have to make sure our 
oversight is done not only in the quantity but in the quality 
that allows us to----
    Mr. Terry. Absolutely.
    Mr. D'Agostino [continuing]. Pick out these flags and not 
have the important indicators buried in reports. That is an 
important thing from my standpoint.
    Mr. Terry. Very good. I am just curious, Mr. Poneman. How--
these were down, cameras were down for 6 months. Once they were 
fixed, evidently they were fixed within a couple days after the 
incident. Is that correct?
    Mr. Poneman. Yes, sir. They have all been fixed, sir.
    Mr. Terry. What was wrong with the cameras?
    Mr. Poneman. I don't know what was wrong the cameras, but I 
think Mr. D'Agostino put it very well.
    Mr. Terry. Mr. D'Agostino, do you know what was wrong with 
the cameras?
    Mr. D'Agostino. Not in a specific way. We can get--take 
that question for the record and get back to the committee.
    Mr. Terry. Mr. Podonsky, do you know?
    Mr. Podonsky. I have an inspection team on the site right 
now, and what I understand were those two particular cameras 
that were out. One was an inner workings of the camera. It took 
24 hours to fix that. The other one was a trip switch that had 
to be just flipped on.
    Mr. Terry. A trip switch. What does that mean?
    Mr. Podonsky. I am not a systems engineer, but that----
    Mr. Terry. Is that a circuit breaker?
    Mr. Podonsky. A circuit breaker was flipped.
    Mr. Terry. So all they had to do was look at it and go like 
that, and that camera would have worked again?
    Mr. Podonsky. That is what my inspectors are telling me.
    Mr. Terry. But it was down for 6 months. So I guess to 
conclude in the last 40 seconds, Mr. Friedman, you made a 
comment regarding we need a scalpel, not a cleaver.
    Mr. Friedman. I did.
    Mr. Terry. I may disagree. When you have that level of 
incompetence, to keep the same people and organization in place 
probably isn't a good decision. There we probably need a 
    I yield back.
    Mr. Stearns. Ms. Schakowsky is recognized for 5 minutes.
    Ms. Schakowsky. Thank you, Mr. Chairman. I want to focus on 
a more fundamental question involved in all of this. That is 
the use of a private contractors altogether. You know, we made 
a decision in--as a country in 1828, that we would be protected 
here at the Congress, members of Congress and the public, by 
people who wear the badge, and I am looking at the recruiting 
Web site, and it says, ``Wear the badge, feel the honor, the 
moment of transformation when you slip into the uniform. Put on 
the badge and join our elite ranks. What does it take to join 
this prestigious team? A deep sense of patriotism, unyielding 
dedication to protecting the public, and a passion for the 
American way of life are just the beginning.''
    DOE is the largest non-defense department contractor and 
agency in the Federal Government, and this is probably one of 
the most sensitive missions; stewardship of the Nation's 
nuclear weapon stockpile. And when you look at who the 
contractor--the company that holds the security contractor is 
WSI Oak Ridge. It is my understanding that this is a local 
branch of G4S Global Solutions, formerly known as Wackenhut, 
the same company that recently apologized to the British 
Parliament for failing to provide enough security guards for 
the London Olympics, and that they also own the company, Armor 
Group, which was involved in serious abuses, including sexual 
hazing and disgusting photos we were all privy to at the U.S. 
Embassy in Cabo in 2009.
    Now, I don't understand, one, why this company has any role 
to play. I would like to know if you have any concerns about 
the performance of this particular company. If the government 
has taken any steps to hold both B&W Y-12 and WSI Oak Ridge 
accountable for the security breach and any other misconduct. I 
have seen reports that the current contracts for B&W expire 
September 30, and WSI's contract ends November 30 and wondered 
if we are going to get rid of them, and perhaps even more 
fundamentally, I wonder if anybody has really looked at, done a 
cost analysis of what it would be to have someone with pride 
wear the badge of the United States of America, be in the line 
of command, and guard something as sensitive as this rather 
than hiring these private outside contractors.
    That is a lot of questions, but I would like to at least 
    Mr. Poneman. These are profound questions, Congresswoman, 
and they come in two sections. I am going to address each of 
our concerns.
    The question you raised about whether the protective force 
should be Federal employees or contractor employees is a 
longstanding question that has been looked at back to the late 
1940s when it first went in the direction that it did for 
security contractors being hired. What you said about that 
sense of mission and patriotism, that is what we believe should 
be held by all of us, including contractors. We say that we all 
work for the President.
    Now, there have been a number of reports, including GAO 
reports, that have weighed the pros and cons, of which there 
are many, but it comes down to something that I think Mr. 
Gaffigan said well in his testimony. There is no substitute for 
management, and you have to stay----
    Ms. Schakowsky. Well, talk to me about this particular 
company. Haven't they done enough to preclude them from being 
hired? I mean, how many apologies have to be issued?
    Mr. Poneman. That is the segue to the second part of your 
question. Now, in this particular case the first thing we did 
was we found that since the contract structure had an 
independent contract for the protective force, this aggregated 
from some of the systems that your colleague mentioned, we put 
Wackenhut under the M&O contractor so we had a single command. 
Point one. Point two, we then issued the show-cause notice that 
said given these security breaches that were experienced at Y-
12, the contractors which would include both the M&O contractor 
and Wackenhut or WSI at the site, show cause why the contract 
should not be terminated. And the third point is on your point 
about the contracts soon to expire, any subsequent competition 
would be informed by the record of the contractors in their 
last term of service under contract. So that would very much 
influence any decision, and there would, therefore, be 
    Ms. Schakowsky. Let me just say, if this were part of the 
normal chain of command of people who wore the badge of the 
United States of America, these people were out, they would be 
sanctioned, there would be some consequence immediately for 
that. It seems to me a company who has been engaged in the kind 
of practices that they have, first of all, should be off the 
list of contractors, and I think we ought to reconsider this 
issue of whether or not private contractors are appropriate for 
this level of sensitive mission.
    And I yield back.
    Mr. Friedman. May I just point out, if I might, that in 
November of 2011 we in our management challenge report for the 
Department of Energy, we recommended that we take a close look 
at how the structure and the provision of protective forces at 
the DOE facilities around the country, including, by the way, 
Argon and Fermi, and one of the options that we put on the 
table was, in fact, federalizing the workforce. It is a very 
complicated issue. It goes back a long time as the Deputy 
Secretary indicated, but we think it is time to relook at that 
issue, and we agree with you there.
    Mr. Stearns. The gentlelady's time has expired.
    Dr. Burgess is recognized for 5 minutes.
    Mr. Burgess. So if I just heard you correctly, Mr. 
Inspector General, you said it is now, you feel it is now time 
to relook at the issue. You know, there was a situation in 
2007, six cruise missiles, each loaded with a nuclear warhead, 
mistakenly loaded on a B-52 bomber at Minot Air Force Base and 
transported to Barksdale, North Dakota, to Louisiana. The 
warheads were supposed to be removed before the missiles were 
taken from storage. The missiles with the nuclear warheads were 
not reported missing and remained mounted to the aircraft at 
both Minot and Barksdale for 36 hours. The warheads were not 
protected by various security precautions required for nuclear 
weapons. They never left the base, no one sprayed paint on 
them, no one protested, but Secretary Gates demanded the 
resignation of the Air Force Secretary and Chief of Staff of 
the Air Force.
    Where is the sense of urgency here? I haven't heard it this 
morning. Mr. Terry said scalpel and cleaver, he prefers a 
cleaver. I don't understand why these individuals are free to 
be here in the hearing room today. Why are they not 
incarcerated? My understanding is they have been charged with 
both criminal trespass, which is a misdemeanor, and destruction 
of Federal property, which is a felony. My understanding is one 
of the individuals is a repeat offender. Do they pose a flight 
risk? I don't know. They don't seem like reliable individuals. 
It is hard to be against a nun and a house painter and an 
electrician, whatever their professions are, but at the same 
time why are they even here in this hearing room? Why are they 
not being held in detention somewhere? What is to prevent them 
from doing the very same thing tomorrow night or the night 
    Mr. Barton posed a very good question. Carrying a Bible to 
a secured nuclear facility is one thing, but it could have been 
anything. It could have been anything. Where is the sense of 
urgency to stop this problem? The POGO folks, the oversight 
guys that are always posting stuff said the Boy Scouts would 
have done a better job. So where is the sense of urgency?
    Mr. Poneman. Congressman, there is, if that is directed to 
me, there is no greater urgency that we face in the complex. We 
are working this every day, all day, and we have from the day 
of the incident, and we immediately took the actions to remove 
the guards who were responsible, we immediately fixed the 
cameras, we immediately dispatched teams, we immediately took 
the general from our Pantex facility who is an expert at 
security and sent him up to make sure that the best practices 
that are enforced in Pantex, and we have done this from day 
one, and we continue to do it, and we are going to keep working 
at it until we feel confident that it--the job has been well 
    Mr. Burgess. Have those guards been fired? I think the 
answer to that question is, no, they have been reassigned. Are 
they going to be barred from working on any sort of similar 
security arrangement in the future? I don't think we have 
gotten an answer to that. Who in the agency is taking 
responsibility? Secretary Gates asked for the resignation of 
the Assistant Secretary of the Air Force. Where is that 
accountability in this situation, which I would submit is no 
less serious than what occurred in Minot, North Dakota.
    Mr. Poneman. We agree with the seriousness, Congressman. 
That is precisely why we have got General Finan doing the 
internal reviews. We have taken the people who were on the line 
in terms of our own Federal oversight and reassigned them to 
permit that review to be unimpeded, and we will follow every 
fact trail to the end of the earth and find out what happened. 
We will, as Secretary Gates did, hold people responsible.
    Mr. Burgess. Well, I think the response was much more 
immediate in Secretary Gates' situation.
    Mr. Friedman, Inspector General Friedman, on the issue of 
compensatory measures, one of the Federal officials according 
to your report, this is--I am referencing here the special 
report in the inquiry of the security breach at the National 
Nuclear Security Administration's Y-12 national complex under 
compensatory measures on page 4. You say one of these Federal 
officials also indicated that they had been instructed not to 
evaluate and report on how the contractors were conducting 
business. Is that an accurate statement?
    Mr. Friedman. That is an accurate statement.
    Mr. Burgess. Well, if that is the case, as long as they 
were doing an adequate job was the other part of that 
statement. In this case were they doing an adequate job in 
deciding how to accomplish their security mission for the 
Department of Energy?
    Mr. Friedman. As the very essence of our report is we think 
    Mr. Burgess. So I guess my question to you is, I mean, you 
are the law enforcement person here. You are the Inspector 
General. Where is the accountability that you are going to 
extract because they clearly failed at their mission?
    Mr. Friedman. Well, you are right in your characterization 
of what my job is and included, by the way, effectuating the 
arrest of the three trespassers, and we are proceeding on that 
case, and your earlier point, Doctor, is--Dr. Burgess, is 
exactly correct. The judicial system is now the timing 
mechanism. It is not the Department of Energy or the Office of 
Inspector General.
    With regard to your second point is we generally do not 
identify particular individuals, there are cases where this 
does occur, who ought to be fired. That is the responsibility 
of management to take our report and the other information they 
have available to them and make whatever judgments they see to 
make with regard to firing individuals, personnel actions, or 
disassociating the Department from certain contractors who have 
not acted well.
    Mr. Burgess. These are individuals who walked through the 
so-called fatal force zone. At Los Alamos several years ago I 
saw a force-on-force exercise out there. It was pretty 
impressive, all of the tools that they had at their disposal. 
Why was none of that used?
    Mr. Friedman. Dr. Burgess, I am sorry. I really--could you 
repeat the question? I am sorry.
    Mr. Burgess. At Los Alamos in 2005----
    Mr. Friedman. Right.
    Mr. Burgess [continuing]. I was given a demonstration of 
the force-on-force exercise that would be instituted were there 
a serious security breach. I would submit that this was 
serious. Got through four fences. They had something the size 
of a Bible. Where was--what would it have taken to institute 
that force-on-force----
    Mr. Stearns. The gentleman's time has expired. You go 
    Mr. Friedman. The answer--well, my answer to your question, 
Dr. Burgess, is really the following. One of the--and I--the 
fact that the nun, one of the trespassers is here today makes 
this even more meaningful, I suppose, is we have testimony from 
sharp shooters who were on the protected force at the site, 
that if the trespassers, if they had clear sight of the 
trespassers, they might have taken them out or attempted to 
take them out at that time. So the aggressive force that you 
witnessed on the force-on-force exercises at Los Alamos exists, 
at least theoretically, at Y-12 as well.
    Mr. Stearns. To confirm them, you had snipers at Y-12?
    Mr. Friedman. Well, I don't want to characterize their 
abilities. They are highly trained, very professional, 
paramilitary, former Seals, very competent individuals in terms 
of their physical abilities and the training generally. Clearly 
there was a breakdown in this case, but you should not believe 
that these are people who are not equipped to do the job when 
they have to do the job.
    Mr. Stearns. I understand. The gentlelady from Florida, Ms. 
Castor, is recognized for 5 minutes.
    Ms. Castor. Thank you, Mr. Chairman, and let me start by 
expressing my dismay over this security breach. It is appalling 
on all levels for the government and for the private 
contractors that had responsibility here.
    Last night the Washington Post published a story noting 
that the security lapses that allowed three protesters, 
including an 82-year-old nun, to gain access to the secure Y-12 
area at Oak Ridge National Lab, that those security lapses had 
been identified by government investigators 2 years before the 
break in. According to the Post a 2010, classified report by 
DOE inspectors found that, ``security cameras were inoperable, 
equipment maintenance was sloppy, and guards were poorly 
    Mr. Poneman, are you aware of this report?
    Mr. Poneman. Yes, ma'am.
    Ms. Castor. Is what is being reported accurate?
    Mr. Poneman. Obviously it is a classified report. We would 
be very happy to go into it in closed session, and I would 
suggest we defer.
    Ms. Castor. What can you tell us now?
    Mr. Poneman. What I can tell you is what we have been very 
clear about, which is the characterization that you have used 
and your colleagues have used. ``Appalling'' is apt, that as 
Mr. Gaffigan has testified it is not just a matter of finding 
the thing that is wrong and fixing it but sustaining that level 
of effort and that we, therefore, had a breakdown up and down 
the chain, including a sense of complacency that something like 
this could not happen, and we are vigorously doing everything 
we can to root that out and to put in place more effective 
    Ms. Castor. Can you tell us that after that 2010, report 
came out that it was reviewed with Babcock and Wilcox, your 
contractors, Wackenhut, WSI Oak Ridge?
    Mr. Poneman. I can tell you that that is what is supposed 
to happen with those kind of reports. In terms of what happened 
with that particular report, we would have to come back to you. 
I don't know exactly----
    Ms. Castor. And Mr. D'Agostino, did I see you nod that it 
was reviewed with the contractors?
    Mr. D'Agostino. Yes, ma'am. As part of standard practice 
all independent inspection reports by the Health, Safety, and 
Security organization are briefed to both the Federal officials 
and the contractor officials at each site. Given the 
consistency of Mr. Podonsky's organization doing these 
inspections, which he could confirm, but there is no doubt in 
my mind that there is, that these reports are in their hands, 
they get copies, they are copied on the reports, they have the 
    I do as well. I get, typically get the report, I read the 
executive summaries, I am briefed by Mr. Podonsky's 
organization to give me the overall sense of the conditions. 
That is standard practice. The key, though, for me in this 
particular case is it is not enough just to read an executive 
summary and take a high-level look at the findings and get a 
brief by the organization. I actually have to read every page 
of that report.
    Ms. Castor. Who is responsibility is it then to sit down 
with the contractors, with Babcock and Wilcox, Wackenhut, WSI 
Oak Ridge to go through that? Did you do that, Mr. Podonsky?
    Mr. Podonsky. Ma'am, what we do and we have been doing for 
2 decades, is we independently assess the performance of the 
contractor and the feds on the site, and then we issue a report 
that is validated, and I won't bother to explain all the 
details, but it is a very rigorous process. So we spend----
    Ms. Castor. I wonder if anyone here at the table read that 
report in 2010, and actively discussed it personally with the 
    Mr. Podonsky. I will tell you that when the team is on site 
as they are right now at other sites, including Y-12, they 
actively validate daily----
    Ms. Castor. I am just wondering if any of you here had that 
report and had that discussion with the contractors.
    Mr. Podonsky. I read my reports. Yes, ma'am.
    Ms. Castor. And then did you----
    Mr. Podonsky. And then it is up to the line to discuss with 
them, with their contractors and with their own staff how they 
are going to correct it. We don't----
    Ms. Castor. So you didn't have any personal conversations 
on the phone or in person with the contractors? I am just 
wondering if anyone, if it was anyone's responsibility to do 
that or if anyone did that here.
    Mr. D'Agostino. Ma'am, it is my responsibility to make sure 
my organization and my security organization does exactly that, 
go over the details of the report. As I mentioned earlier, I 
get the executive summaries, I get a brief by the independent 
inspection organizations on these reports, which I did in this 
particular case, and the key is--and so I count on my security 
organization to go through the details page by page----
    Ms. Castor. OK. Thank you, and Mr. Friedman, I have--your 
recent Y-12 report suggests that there may have been systemic 
failures to address maintenance issues at Y-12. I would like to 
know in a broader perspective were the problems you saw at Y-12 
symptomatic of larger issues here at this agency or the DOE?
    Mr. Friedman. Well, symptomatic in the sense that we have 
concerns about the whole notion of contract administration and 
contractor oversight and how that is effectuated throughout the 
Department, yes. In terms of security, you know, to be totally 
candid with you we have--we issued a report on a compromise of 
a force-on-force exercise in 2004. So we have had some 
continuing--at Y-12 but that----
    Ms. Castor. And then back on the accountability for the 
contractors, are there any penalties built into these 
contracts? I understand that you have now taken action, began 
proceedings to fire the management contractor, the subsidiary 
of Babcock and Wilcox, but are there any penalties built into 
these type of contracts so that if a breach like this occurs, 
not only do personnel lose their jobs but there is some payment 
back to the DOE or the government?
    Mr. D'Agostino. The government always has the ability to 
reach back and look at past performance and make adjustments 
consistent with the contract, and our plans are to do just that 
in this case, ma'am.
    Mr. Stearns. The gentlelady's time has expired.
    The gentlelady from Tennessee is recognized for 5 minutes.
    Mrs. Blackburn. Thank you, Mr. Chairman, and I thank you 
all for your patience. I hope that it is not lost on you that 
this is something that concerns us tremendously, and having 
served in the State Senate in Tennessee, knowing how proud 
individuals in that part of the State are of that facility, 
having visited the facility many times myself, I think not only 
did you have a security breach, but you have now what you are 
seeing is a breach of the public trust in that area. You are 
charged with keeping that facility safe. You are charged in 
keeping the employees at that facility safe, and it is such--
the ineptness and the negligence is mindboggling as we look at 
    Now, I want to go back to this 2010, report. A report comes 
out in 2010, and you review this report. Now, you have to 
review it with the contractors. Am I right there, Mr. Podonsky? 
I think----
    Mr. Podonsky. Yes. We validate the content----
    Mrs. Blackburn. OK.
    Mr. Podonsky [continuing]. To the contractors and the 
    Mrs. Blackburn. OK. Now, with the site, who is the buck 
stops here? Who is--do you have a guy who makes the decision at 
that facility that says, these are serious issues?
    Mr. Podonsky. That would be the site manager, the Federal 
site manager.
    Mrs. Blackburn. OK. The Federal site manager. Did that 
individual make that decision that this was serious, and did 
they hold Babcock and Wilcox and WSI responsible and say, we 
are going to tie your money up until you straighten this out?
    Mr. Podonsky. I would tell you from the independent 
oversight perspective that is what is supposed to happen, and 
then we as an organization brief it up as Administrator 
D'Agostino said, we did brief him and his security staff back 
in Washington. So it is up to Administrator D'Agostino to then 
make sure that the corrective actions through the site manager 
    Mrs. Blackburn. Mr. D'Agostino, did you follow up with the 
site manager?
    Mr. D'Agostino. Yes, ma'am.
    Mrs. Blackburn. Did the site manager say we have taken 
action to fix these security lapses?
    Mr. D'Agostino. Yes, ma'am. In the 2009, report that was 
    Mrs. Blackburn. When did he show proof that he had taken 
    Mr. D'Agostino. The--I will have to get you the exact month 
that he showed proof, but we had validated the closure of all 
of the findings, including the cameras----
    Mrs. Blackburn. OK. Then who is responsible that it didn't 
get done?
    Mr. D'Agostino. The problem----
    Mrs. Blackburn. Let me ask you this. Have any of you been 
on the ground at the Y-12 facility?
    Mr. D'Agostino. Yes, ma'am.
    Mr. Podonsky. Yes, ma'am.
    Mrs. Blackburn. All of you have been there?
    Mr. Poneman. Yes, ma'am.
    Mr. Gaffigan. Yes, ma'am.
    Mr. Friedman. Yes, ma'am.
    Mrs. Blackburn. So all of you went, and all of you looked 
at this physical facility, and all, each of you reviewed the 
items that were pointed out and made sure boxes were checked 
that they had been repaired and signed off on this. Am I right 
on this?
    Mr. Poneman. No, ma'am. I visited this site----
    Mrs. Blackburn. OK. Mr. Poneman.
    Mr. Poneman [continuing]. On earlier occasions, and as you 
know having visited the site, it is an impressive site.
    Mrs. Blackburn. Yes, it is.
    Mr. Poneman. And the problem----
    Mrs. Blackburn. And it deserves to be protected.
    Mr. Poneman. And it deserves for the site, for the people 
of the Nation, absolutely correct. One of the problems here is 
you have an evidence that looks like invincibility, but we had 
specific shortcomings that were not adequately identified or if 
they were fixed, the system was not fixed to the point that it 
was sustained. These are the things that we are trying to get 
our arms around right now.
    You are absolutely right. It has to have that kind of top 
    Mrs. Blackburn. See, it just seems incomprehensible that 
you could have said we have this report, we are doing this 
review, we have these problems, the problems are not fixed, are 
not fixed to completion. How could you continue the contract if 
they are not completed, and I have to tell you, listening to 
you all this morning, I got to tell you something. This is 
classic bureaucratic pass the buck. It is not my problem. It is 
somebody else's problem. Well, it is your problem.
    Mr. Poneman. Congresswoman----
    Mrs. Blackburn. You are charged with the responsibility of 
protecting these facilities, and we are charged with conducting 
the appropriate oversight for this, and to say, well, I 
reviewed it and so and so said--somebody somewhere has to say 
are the cameras working, are the fences complete. If you have 
got, what is it, 200 false alarms, you should know that there 
is a problem with something causing the false alarms. You know 
it is wildlife in this area. Is that not correct? So you fix 
it, but you don't allow it to continue and continue to pay the 
contract and then have something like this occur where you have 
individuals inside this facility. The security culture and the 
safety culture demands a better product from you all.
    Mr. Poneman. Congresswoman, in terms of the priority that 
it deserves and in terms of the cultural requirement to be ever 
vigilant, you are absolutely correct. That is why within days 
of actually knowing about the problems, the problems that had 
been identified had been fixed, and we are now about the 
business of making sure, A, that we don't have problems like 
that anywhere else in the system, and B, that we take 
permanent, sustained, and sustainable measures to make sure 
that it is----
    Mrs. Blackburn. Sir, my time has expired, but I would offer 
that you fixed them after you were embarrassed, and you fixed 
them 2 years too late.
    I yield back.
    Mr. Stearns. The gentlelady's time has expired.
    The gentleman from Texas, Mr. Green, is recognized for 5 
    Mr. Green. Thank you, Mr. Chairman. A question for everyone 
on the panel. The National Defense Authorization Act was passed 
by this chamber earlier this year, allows the National Nuclear 
Security Administration sites to adopt OSHA workplace standards 
in lieu of the NNSA present standards.
    Can anyone on the panel tell me the differences between 
what NNSA's present standards and the standards the House NDAA 
would allow? In addition, the OSHA standards provide more 
protection. Would OSHA standards provide more protection for 
the workers at those nuclear sites, and would OSHA standards be 
easier to enforce?
    Is OSHA stronger than what was original standards?
    Mr. Poneman. We have very strong standards, Congressman, in 
the Department of Energy. There are some similarities between 
OSHA standards and DOE standards, but there are some unique DOE 
requirements because of our unique nuclear responsibilities for 
such materials as Beryllium and so forth. So we are informed by 
those standards, but the standards that the DOE employs are 
specific to the DOE complex and are unique requirements.
    Mr. Green. You can apply both, whichever is the toughest. 
Obviously your standards or OSHA standards, I guess, for 
safety. Is there any--is national, nuclear security standards 
stronger than OSHA?
    Mr. Poneman. Well, the OSHA standards, Congressman, and my 
colleagues may wish to join me in explaining this, apply to 
general industrial safety.
    Mr. Green. Yes.
    Mr. Poneman. And where we can apply globally recognized 
standards that apply to industrial safety, we do that. That is 
an efficient thing to do to use validated peer review standards 
such as OSHA. However, when there are those unique requirements 
that pertain to the use of Beryllium and other things that are 
unique to our complex, we need special DOE-tailored standards.
    Mr. D'Agostino. And if I could just agree with everything 
the Deputy Secretary said. We have, we follow DOE directives on 
safety. Safety is critically important, and we are inspected by 
independent inspection, Mr. Podonsky's organization, as well as 
we have our own safety inspection standards. We don't believe 
that OSHA broadly applied is the way to go. We believe after 
years of analysis and work in developing DOE directives on 
safety that we have the right set. It is something that 
requires constant vigilance, constant attention to detail as 
this security situation has pointed out. We really do have to 
continue to keep eyes on the ball here, sir.
    Mr. Podonsky. May I amplify on that, Congressman?
    Mr. Green. Sure.
    Mr. Podonsky. The Administration made it clear that the 
legislation that was proposed would hinder the Secretary's 
ability to manage safety and security at--within the NNSA, and 
specifically to your question on OSHA versus the standards that 
we have, our standards are much stronger. In fact, the 
Administrator for OSHA would like to move OSHA more towards the 
DOE standards, but because their hazards are of not the same 
magnitude as ours, it is rather difficult.
    Mr. Green. Well, and obviously I have trouble with OSHA 
standards. I represent an area of maybe not as--but refineries 
and chemical plants, and our standards, sometimes the company 
standards are tougher than OSHA, and I can understand that.
    The testimony by the Inspector General and the GAO 
submitted today indicate that have been persistent safety 
problems at NNSA sites for the past decade. The GAO reported 
between 2000, and 2007, there were 60 serious accidents or near 
misses, including worker exposure to radiation, inhalation of 
toxic vapors, electrical shocks, and again, I am interested in 
learning what DOE and NNSA are doing to protect the workers. Is 
60 violations in 7 years, particularly dealing with the type of 
substances that you have to do, it seems like that would be an 
awful lot.
    Mr. Poneman. Congressman, when it comes to anything 
nuclear, even one incident is one too many.
    Mr. Green. Yes.
    Mr. Poneman. And I can assure you that we take gravely 
seriously our commitment and our responsibilities for the 
safety of our workers, of the neighbors of the facilities, and 
of the general public. We have addressed issues up, down, and 
sideways relating to improving our safety culture. The 
Secretary and I have both spent days and weeks going out to the 
sites, telling people they should feel free to come forward to 
    Mr. Green. I have one more question. Let me get--Mr. 
Gaffigan, your testimony states that the problem of NNSA 
oversight is not a matter of being excessive or overbearing but 
ineffective. What recommendations would you provide for the 
oversight to be less ineffective, and what steps can be--you 
report to the DOE in taking to make sure that oversight of the 
labs is as effective as possible?
    Mr. Gaffigan. And I this applies to both safety and 
security. We have not found the problems to be the standards 
themselves. I think the standards are good. They are out there. 
They do find the problems, they do come up with good corrective 
action plans, and the thing that we think they fall short on 
over and over again, this is kind of deja vu all over again 
with both the safety and the security side, and we have reports 
going back to the early 2000s and beyond. The same issue of 
they identified the problem and then they come out with 
corrective action, and it is not sustained, and I think you 
found in the testimony today talking about 2008, when the first 
report came out, 2009, 2010, whatever these issues were 
floated, yes, it looks like some action was taken, but it 
wasn't sustained. And that seems to be the problem over and 
over again.
    Mr. Green. OK. Thank you, Mr. Chairman.
    Mr. Stearns. Thank the gentleman.
    I recognize Mr. Gardner, the gentleman from Colorado, is 
recognized for 5 minutes.
    Mr. Gardner. Thank you, Mr. Chairman, and I have heard 
members of the committee as well as panelists before this 
committee describe what happened as inexcusable and as 
appalling, but I would also say that it has become a little bit 
of a theme. If you look at some of the background material that 
we have been given before this committee hearing and the 
memorandum, it talks about committee hearings that were held, a 
series of Energy and Commerce Committee hearings held in 1999, 
that talks about 15 hearings held and numerous GAO 
investigations requested in 2004, and 2005, and 2008, and 2009. 
We have heard about reports in March of 2010.
    I have in my district 50 intercontinental ballistic 
missiles, Minutemen III, located in my district, and recently I 
went to F. E. Warren Air Force Base, where I viewed the 
preparations that they go under to monitor the sites, the 
missile alert facilities, and the material that they are 
protecting. And certainly I don't think at any point was I 
concerned that they were becoming numb to an alarm that was 
going off, because as I sat in the facility there were alarms 
going off because a tumbleweed blew up against an electronic 
surveillance barrier, and they knew where to look for that, and 
they certainly checked it out and verified it. And it happened 
multiple times a day as you can imagine on the eastern plains 
of Colorado, where you have wildlife, where you have 
tumbleweeds, where you have high wind, where you have snow that 
builds drifts that may cause an alert. Watching the shadows on 
the video monitor of the drifts to make sure that nothing was 
    And yet we continue to see this theme that it sounds like 
you know what is wrong, it sounds like you have identified the 
problem, but I don't know that we have had the government 
picture in place that actually accomplishes the protections 
that we need of what obviously is a critical matter of national 
    And some of this, some of these questions have been asked 
before. Some of them have been talked about here, but I do want 
to follow up and do a little bit of repeating of what has 
    And so, Mr. Friedman, Mr. Friedman, in your report, in your 
IG report you say that one official in NNSA was talking about 
how, talking about how--excuse me. Had been instructed not to 
evaluate and report on how the contractors were conducting 
business, and we talked a little bit about the contractors, 
whether or not they have done an adequate job deciding how to 
accomplish the mission. We have talked about effective 
    And so I guess the question is actually not for you, Mr. 
Friedman, but to Mr. D'Agostino. How do we make sure that we 
have the management that we need to--for a contractor to make 
decisions if the Federal side officials are not able to 
evaluate how the contractor is doing their job?
    Mr. D'Agostino. Mr. Gardner, that is the question is to 
make sure, it is my responsibility to make sure that my Federal 
overseers in the program understand that my expectation is that 
they do oversee the contractor in this high hazard, highly 
important, critical missions of nuclear safety and nuclear 
security and that we have an independent oversight structure in 
place to check that we are actually doing that particular 
    In this particular case you referenced a quote I think from 
Mr. Friedman's report. We had clearly a situation that was 
unacceptable, was inexcusable, and this is why we are 
conducting reviews because we want to understand what happened 
in the translation of oversight that we have people at our site 
offices thinking that they cannot and should not and are not 
allowed to oversee the contractor in that way. So we want to 
track this down, we want to get this review done and General 
Finan's review as the Deputy Secretary had mentioned, clearly 
is a step towards digging beyond just what we have been--and 
some of the pieces we have been talking about on specific 
numbers of cameras, which is important, but we want to get to 
that underlying thing that allows us to sustain oversight, 
effective oversight in the right way, and as Mr. Friedman's 
report said, so it in a risk-based way where our attention is 
based on the most, the highest, most important activities.
    Mr. Gardner. Do you carry out perimeter checks? I mean, do 
you carry out perhaps drills or tests that may breach a 
perimeter just to check for response?
    Mr. D'Agostino. Yes, but we clearly need to do more of 
these and do what----
    Mr. Gardner. How many--how often do you carry those out?
    Mr. D'Agostino. Those checks, right now those checks are 
now being ascribed every time we conduct a visit from 
headquarters that we are going to do that check. We are going 
to have federalized----
    Mr. Gardner. How often were they carried out before the 
incident at Y-12?
    Mr. D'Agostino. They were carried out on a regular basis.
    Mr. Gardner. What is a regular basis?
    Mr. D'Agostino. Regular basis is on a weekly basis by their 
protective force. We expect our contractor have a performance 
assurance system. They have to prove to the Federal Government, 
we have a contract with them, that they are checking 
themselves, and so they----
    Mr. Gardner. And are you reviewing those checks?
    Mr. D'Agostino. Yes, sir. Those checks get reviewed. The 
challenge is to make, is to have these checks done in such a 
way that they actually could test conditions on the ground, not 
the fact that we have a contractor knowing that something is 
going to happen so they are ready to go.
    Mr. Gardner. Yield back. Thank you.
    Mr. Stearns. The gentleman yields back.
    The gentleman from Massachusetts, Mr. Markey, is recognized 
for 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman, very much, and thank 
you, Sister, Meghan Rice, for being here. Thank you for your 
actions. Thank you for your willingness to focus attention on 
this nuclear weapons buildup that still exists in our world and 
how much we need to do something to reduce it. We don't need 
more nuclear weapons. We need fewer nuclear weapons. We don't 
need more hostility with Russia. We need less hostility with 
Russia. We thank you. We thank you for your courage.
    I went to Immaculate Conception Grammar School, Malden 
Catholic, Boston College, and Boston College Law School. So I 
went to catholic school every day for 20 years, and I am very 
influenced, of course, by everything that the nuns taught me. 
It is important that was nuns on the bus, not under the bus, 
which a lot of people would like for you, Sister. They think 
you should be punished and not praised, but what you have done 
is you have shown the lackness, the laxness of the security at 
our nuclear weapons facilities, and but you have also pointed 
out that we still have an out-of-control nuclear arms race with 
an out-of-control budget building more nuclear weapons in our 
own country, and for that you should be praised, because that 
is ultimately what the Sermon on the Mount is all about.
    And I think along Sister Simone Campbell, speaking at the 
Democratic Convention about the Ryan budget, that you can't 
build more nuclear weapons and cut Medicaid and cut Pell Grants 
and cut Medicare at the same time. It is not just the 
arithmetic doesn't add up if you say you are balancing the 
budget, but the morality end of it. It is just wrong, and so 
what you did, Sister, was just so memorable to me in pulling up 
all of those classrooms that I was in all those years, just 
hearing that message. And so I thank you for that, and I hope 
that the members of this committee can learn from what you are 
saying and what Sister Campbell is saying and perhaps just 
reflect that in the incredible commitment that too many members 
have to building more nuclear weapons when we don't have any 
targets anymore for those nuclear weapons.
    And some people just think of the Defense budget as a jobs 
bill. No. It should just be what enhances our security, and if 
you can't justify it on that basis, you just can't maintain it 
because it adds to the instability on the planet.
    So, Mr. Poneman, let me just go to you. The United States 
Enrichment Corporation is possibly the most troubled company 
that has a pending loan guarantee application at the 
Department. It is rated at below junk bond status. It has been 
warned that it is at risk of being delisted from the stock 
exchange, which prompted the USEC to warn its shareholders 
could be put into default on all of its debts. It lost more 
money last year than the entire Solyndra Loan Guarantee was 
worth, and despite repeated DOE bailouts totaling almost $1 
billion and free uranium and other subsidies in just the past 8 
months the total value of the company is only about $62 
million. And despite the clear signs of impending bankruptcy, 
the Department requested another $100 million from Congress for 
USEC for fiscal year 2013.
    Mr. Poneman, will the Department actually provide these 
funds to USEC even if USEC continues to be at risk of being 
delisted from the stock exchange and defaulting on all of its 
    Mr. Poneman. Congressman, let me be very clear. The thing 
that the United States Department of Energy is focused on is 
maintaining a domestic source of enriched uranium so that while 
we still have the deterrent that we need to defend America, we 
can get the tritium and so forth we need----
    Mr. Markey. I understand that, but USEC's American 
centrifuge project in Ohio plans to use foreign-made technology 
for everything from pumps to cooling systems. They have even 
asked from Congress to pass legislation to get favorable tariff 
treatment on these imports, and USEC's Kentucky facility relies 
on French pumps to move the enriched uranium and waste through 
the machines.
    If DOE really believes it needs American technology to meet 
its tritium needs, why does it allow USEC to rely so heavily on 
foreign technology?
    Mr. Poneman. To be very clear, Congressman, that is, 
whether there are some parts that are foreign, the technology 
and the intellectual property is owned by the United States of 
America, and the United States Department of Energy has taken 
every step to ensure that in the event that USEC is not able to 
carry of its responsibilities, that we have access both to the 
machines and to the intellectual property to assure that our 
trading requirements can still be met.
    Mr. Markey. But are you going to give them money even if 
they are going bankrupt?
    Mr. Poneman. To me, to us, Congressman, the question is not 
a specific company and its status. The question is the 
capability for the Nation. We will do what we need to to make 
sure that we still have the deterrent that we need to defend 
    Mr. Markey. Well, I just disagree with that 100 percent. I 
just think if we are going to have a loan guarantee program and 
Solyndra is going to be criticized, then we have to criticize 
the United States Enrichment Corporation as well, and we should 
find a way indigenously of doing it but not subsidizing 
companies that are going bankrupt. It is just wrong.
    Mr. Poneman. Congressman, to be very clear, precisely 
because the underwriting criteria of the loan program guarantee 
could not be met by USEC, the Department entered into a far 
different arrangement, a much more modest arrangement for 
research demonstration and development program, which would 
vouchsafe the technology stayed safe in American hands, even if 
the loan guarantee could not be qualified as under the 
underwriting criteria it could not. The program that we have in 
place will reduce the technical risks and reduce the financial 
risks if it works out, and we have very strong safeties to make 
sure that the U.S. taxpayer interest is well protected.
    Mr. Stearns. The gentleman's time has expired.
    Mr. Markey. That is junk bond status.
    Mr. Stearns. The gentleman's time has expired.
    The gentleman from Virginia is recognized for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman.
    Back to the subject of this hearing, I got a couple of 
questions. I have heard that everybody is processing reports 
and going over all of this. Can I assume that you all will 
bring a report to us as well highlighting what went wrong, what 
is being done to rectify that?
    Mr. Poneman. Congressman, we not only recognize it. We 
embrace the oversight responsibilities of this subcommittee, 
and we will surely bring that to your attention.
    Mr. Griffith. And Mr. Chairman, I think probably the 4 
years in we might want to have a revisit on this subject even 
if brief, even if only a brief hearing on that matter.
    Thank you, Mr. Chairman.
    Also, there has been talk of and I don't care who responds 
because several people have mentioned that there was--the 
debate over federalization had been going on for years, and it 
was being looked at again, and I am sitting here, and there may 
be some great reason for it, but I am new, and I am just trying 
to solve problems, but have we ever thought about attaching at 
least for the protection of the perimeter an installation of 
the United States Army?
    Mr. Poneman. Congressman, the first thing that we have done 
in this particular instance is make sure with the force that we 
have and the arrangements that we have that we are safe and the 
material is secure. We have already said we need to look at 
exactly the kinds of questions you are asking to see if it can 
be done better. It has been looked at many times. I do think 
that Mr. Gaffigan put his finger on something very important 
when he said whatever the organizational arrangements, and I 
think this is what the past GAO reports indicated, there was no 
substitute for strong management oversight. So whether it is a 
federalized force or whether it is a contracted force, there is 
no substitute for getting that strong direction and leadership.
    Mr. Griffith. Historically the United States Army seems to 
have done a pretty good of that.
    Mr. Poneman. We are very proud of the U.S. Army.
    Mr. Griffith. That being said, Mr. Friedman, I am new to 
this, but my understanding is is that this has been going on 
for some time with various problems, and what else should we be 
doing as a committee to make sure that we don't have another 
problem 6 months, 2 years, 5 years from now, and as a part of 
that, you know, should we be making more site visits to see 
whether or not the cameras are switched on ourselves?
    Mr. Friedman. Well, I will respond to your question, Mr. 
Griffith, but it is a little presumptuous on my part to tell 
the subcommittee how to conduct its oversight.
    Mr. Griffith. Well, I am looking----
    Mr. Friedman. So I would tell you this. I think periodic 
hearings on these specific matters would be worthwhile. I think 
more site visits, boots on the ground from the subcommittee's 
point of view to see what is going on, comparing and 
contrasting from your perspective what goes on at the various 
Department of Energy sites and seeing if there are anomalies 
that you might point out, and finally, sort of the $64 
question, which I don't know has been asked, is the question of 
resources, and there are resource issues, and perhaps, I know 
you are an oversight committee, but obviously you have 
appropriations responsibilities as well, and that might be an 
area in which you could focus your attention. In other words, 
do they have the resources to do that job, are they properly 
positioned to do that.
    Mr. Poneman. I would just add, Congressman, we would 
welcome any and all members of the subcommittee to the site. We 
think that would be a very, very useful exercise and helpful.
    Mr. Griffith. All right. Mr. Chairman, I see no need to 
pile on. Everybody has said what happened was bad and we want 
to fix it, but I am happy to yield my time to any member who 
might with to have that time.
    Mr. Stearns. OK. I will take a little bit and then the 
gentlelady from Tennessee.
    Mr. Friedman, you indicate more resources but wasn't it a 
case where they just didn't check the circuit breakers on one 
of the cameras?
    Mr. Friedman. Well, I am not suggesting that the 
Congressional appropriation was inadequate. What I am 
suggesting is that in terms of maintenance, which is one of the 
key issues here, we were told that there were not enough 
maintenance individuals to take care of the backlog of existing 
equipment while they implemented and installed a new system. So 
the pie simply was not large enough to take care of both. That 
is the sort of resource issue that I was referring to, and I 
apologize if I didn't make that clear.
    Mr. Stearns. But you would admit that checking circuit 
breakers doesn't require more resources, and one of the key 
cameras didn't--no one checked the circuit breaker. It wasn't 
    Mr. Friedman. Well, I would suggest to you, Mr. Chairman, 
that when somebody takes a closer look at it, it was more than 
a mere circuit breaker, but I am not in a position to affirm 
that positively but----
    Mr. Stearns. OK. The gentleman from Virginia reclaims his 
    Mr. Griffith. Reclaiming my time, Mr. Chairman, I would say 
that the other question that I have is is that there must have 
been more than just one or two cameras out. Either that or 
these folks had some inside information. My guess is is that 
your entire perimeter was exposed or else they wouldn't have 
been able to just waltz in the way they did. Either that or 
they knew which cameras weren't working. It sounds like to me 
the whole thing was down.
    And I yield back, Mr. Chairman.
    Mr. Stearns. The gentleman's time has expired.
    Mr. Scalise is recognized for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
holding this hearing, and I have a number of questions, but I 
first want to respond to some of those comments made by the 
gentleman from Massachusetts. You know, first of all, to try to 
equate in some way building nuclear weapons to protect this 
country and reforming Medicaid, which is an incredibly broken 
system that is depriving many people of good healthcare and 
equating that as a moral, I have no idea what place that has in 
this debate. You know, maybe some people haven't been paying 
attention what has been going on in the world.
    I mean, we just saw yesterday on the 11th anniversary of 
September 11 that there is turmoil in this world and especially 
in the Middle East. You know, not only what happened in Libya 
and Egypt yesterday but also you look at what is happening in 
Iran, you know, while some people here might want to eliminate 
our nuclear force and our capabilities to defend this country, 
Iran is currently developing and may have nuclear capabilities 
at this time, and there is a bipartisan group in Congress that 
recognized that threat, and while President Obama might not 
have time to meet with Benjamin Netanyahu to talk about the 
threat to Israel, one of our greatest allies in the world, 
there is a bipartisan group in Congress who do recognize that 
treat and support the efforts, not only of Israel to defend 
themselves, but of this country and the actions that we ought 
to be taking that we are not to address the threat of Iran, as 
well as the nuclear threats all around the world and the fact 
that we can't do it by disarming ourselves. I mean, America is 
the beacon of the world in large part because of our strength, 
and peace through strength has worked over time. It is what 
ended the Cold War, and yet there are some people that want to 
think that now that the Cold War is over, they just want to 
ignore history.
    And so, you know, I think that history repeated itself 
yesterday, and those who ignore it are doomed to have it repeat 
itself, and we can't let that happen, and that is why the 
Department of Energy has a responsibility to protect the 
arsenal that we have, and you know, I think what our hearing is 
really focusing on is what kind of job is being done. You know, 
I looked at the Inspector General report, and I have some 
questions about that.
    First, I want to just open it up to the whole panel. In 
February the National Research Council issued a report which 
concluded in part, I quote, ``The study committee recommends 
that the NNSA, Congress, and top management of the laboratories 
recognize that safety and security systems at the laboratories 
have been strengthened to the point where they no longer need 
special attention.'' This was written in February.
    I want to ask if any of you all want to comment on that, 
and first of all, do you agree with it? I strongly disagree 
with that conclusion by the National Research Council, and I 
think what happened with this breach just 2 months ago shows 
that, in fact, they haven't been strengthened, but this 
conclusion says they are strengthened. Mr. Poneman, do you want 
to comment?
    Mr. Poneman. Congressman, very important points and just 
briefly on your first point, that is exactly why President 
Obama has made clear that in our nuclear posture review that 
non-proliferation is the top objective, and we have been to 
every effort to stop Iran from obtaining nuclear weapons.
    Mr. Scalise. I would disagree. I would think if you look at 
the actions that this administration has taken, it has been 
inadequate to stop Iran from developing the capabilities that 
everybody that honestly looks at it, especially Israel, which 
is faced with the evisceration, says that they are carrying 
forward with. So, I mean, to say that this administration has 
taken actions to stop Iran from advancing their nuclear 
capability is just wrong.
    Mr. Poneman. Sir, with all due respect, we have negotiated 
to curtail and to pull out highly enriched uranium, natural 
uranium that had been enriched in a facility. We are sparing no 
effort to stop that, but I want to go back to your NRC question 
about the report.
    We strongly, strongly believe that continued and, in fact, 
enhanced vigilance in oversight is required. The job of----
    Mr. Scalise. Well, did you agree with that conclusion that 
security has been strengthened to the point where it no longer 
needs special attention? Do you agree with that conclusion or 
do you not?
    Mr. Poneman. No. Security always, always needs to be----
    Mr. Scalise. OK. So you disagree.
    Mr. Poneman. It will never be done.
    Mr. Scalise. Mr. Friedman, you did the Inspector General, 
you are part of the Inspector General report. What is your 
response to the conclusion that they had just in February?
    Mr. Friedman. I disagree with that aspect of the conclusion 
based on our work. We treat these matters as--on our management 
challenge list as components of the management challenge list. 
While there have been some improvements and some setbacks in 
certain areas, we don't think their position is----
    Mr. Scalise. Thank you, and I hope that the Department 
looks closely at your report and some of the reports of those 
who were on the ground, those people that were tasked with 
maintaining security at this facility. I mean, it looked like a 
Keystone Cop operation where the officer there wasn't even 
paying attention to what was going on, wasn't even really 
securing the facility after the people who broke in came and in 
essence surrendered to them. They just kind of looked around, 
and it took a second supervisor to come before they finally 
took some action.
    But I think it shows--and it wasn't, he wasn't the only 
one. I mean, there was reports that people on the--at the 
facility for months didn't know even how many cameras weren't 
even working. They had no idea what was working, what wasn't 
working, and some of this had been problematic for months. And 
so I think there was a culture there, and I don't know if that 
permeated at the other facilities, too, because this wasn't--Y-
12 wasn't the only facility. So I don't know if this is a 
culture of neglect and lax security, but clearly there is a 
difference because as I pointed out, you know, you look at what 
National Research Council said. They said the security is fine, 
and it is not.
    And so I hope that there will be real accountability and 
not just people reassigned, but people ought to be removed, and 
a new culture needs to be installed.
    And with that I yield back the balance of my time.
    Mr. Stearns. Thank the gentleman. I believe we have had a 
very good attendance by the subcommittee. I want to thank the 
witnesses for their patience and participation.
    I ask unanimous consent that the contents of the document 
binder be introduced into the record and to authorize staff to 
make any appropriate redactions.
    Without objection, so ordered. The documents will be 
entered into the record with any redactions that staff 
determines are appropriate, and I remind all members that at 
12:30 we are going to have a meeting and a briefing, and all 
members on the subcommittee are invited. It is over in the 
visitor's center, and you can talk to staff if you want the 
actual room number.
    And, again, we want to thank our witnesses, and the 
subcommittee is adjourned.
    [Whereupon, at 12:12 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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