[Senate Hearing 112-618]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-618

 
  NATIONAL NUCLEAR SECURITY ADMINISTRATION MANAGEMENT OF ITS NATIONAL 
                         SECURITY LABORATORIES

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON STRATEGIC FORCES

                                 of the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 18, 2012

                               __________

         Printed for the use of the Committee on Armed Services




        Available via the World Wide Web: http://www.fdsys.gov/

                               __________

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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
JACK REED, Rhode Island              JAMES M. INHOFE, Oklahoma
DANIEL K. AKAKA, Hawaii              JEFF SESSIONS, Alabama
E. BENJAMIN NELSON, Nebraska         SAXBY CHAMBLISS, Georgia
JIM WEBB, Virginia                   ROGER F. WICKER, Mississippi
CLAIRE McCASKILL, Missouri           SCOTT P. BROWN, Massachusetts
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
KAY R. HAGAN, North Carolina         KELLY AYOTTE, New Hampshire
MARK BEGICH, Alaska                  SUSAN M. COLLINS, Maine
JOE MANCHIN III, West Virginia       LINDSEY GRAHAM, South Carolina
JEANNE SHAHEEN, New Hampshire        JOHN CORNYN, Texas
KIRSTEN E. GILLIBRAND, New York      DAVID VITTER, Louisiana
RICHARD BLUMENTHAL, Connecticut

                   Richard D. DeBobes, Staff Director

                 Ann E. Sauer, Minority Staff Director

                                 ______

                    Subcommittee on Strategic Forces

                 E. BENJAMIN NELSON, Nebraska, Chairman

JOSEPH I. LIEBERMAN, Connecticut     JEFF SESSIONS, Alabama
JACK REED, Rhode Island              JAMES M. INHOFE, Oklahoma
MARK UDALL, Colorado                 ROGER F. WICKER, Mississippi
MARK BEGICH, Alaska                  ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire        JOHN CORNYN, Texas
KIRSTEN E. GILLIBRAND, New York      DAVID VITTER, Louisiana

                                  (ii)

  
?



                            C O N T E N T S

                               __________

                    CHRONOLOGICAL LIST OF WITNESSES

  National Nuclear Security Administration Management of Its National 
                         Security Laboratories

                             april 18, 2012

                                                                   Page

Patel, Dr. C. Kumar N., President and Chief Executive Officer, 
  Pranalytica, Inc.; Co-Chair, National Research Council 
  Committee on Review of the Quality of the Management and of the 
  Science and Engineering Research at the Department of Energy's 
  National Security Laboratories-Phase 1.........................     9
Shank, Dr. Charles V., Senior Fellow, Howard Hughes Medical 
  Institute; Co-Chair, National Research Council Committee on 
  Review of the Quality of the Management and of the Science and 
  Engineering Research at the Department of Energy's National 
  Security Laboratories-Phase 1..................................    14
McMillan, Dr. Charles F., Director, Los Alamos National 
  Laboratory.....................................................    15
Albright, Dr. Penrose C., Director, Lawrence Livermore National 
  Laboratory.....................................................    22
Hommert, Dr. Paul J., Director, Sandia National Laboratories.....    31

                                 (iii)


  NATIONAL NUCLEAR SECURITY ADMINISTRATION MANAGEMENT OF ITS NATIONAL 
                         SECURITY LABORATORIES

                              ----------                              


                       WEDNESDAY, APRIL 18, 2012

                               U.S. Senate,
                  Subcommittee on Strategic Forces,
                               Committee on Armed Services,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:29 p.m. in 
room SR-222, Russell Senate Office Building, Senator E. 
Benjamin Nelson (chairman of the subcommittee) presiding.
    Committee members present: Senators Nelson, Inhofe, and 
Vitter.
    Majority staff member present: Jonathan S. Epstein, 
counsel.
    Minority staff member present: Daniel Lerner, professional 
staff member.
    Staff assistant present: Hannah I. Lloyd.
    Committee members' assistants present: Ryan Ehly, assistant 
to Senator Nelson; Anthony Lazarski, assistant to Senator 
Inhofe; and Charles Brittingham, assistant to Senator Vitter.

   OPENING STATEMENT OF SENATOR E. BENJAMIN NELSON, CHAIRMAN

    Senator Nelson. Let me today call the hearing to order.
    Senator Sessions is in a budget hearing at the moment, so 
he is not going to be able to join us, but Senator Inhofe is a 
member of the subcommittee and he will be joining us shortly. 
In the meantime, I thought we might get started.
    I have two cans of pop here. I do not intend to drink both 
of them, but when there is only one and you run out, you do not 
have a successor. So it might be a two-drink hearing. 
[Laughter.]
    The purpose of today's hearing is to examine the 
relationship between the National Nuclear Security Agency 
(NNSA), and its national security laboratories. We had a 
similar hearing on this topic on March 14 with the NNSA, and 
today it is the national security laboratories' turn to comment 
on this relationship.
    We also have as a witness the Chairman and Vice Chairman of 
the National Academies of Science panel that examined how this 
relationship is affecting the quality of science and 
engineering at the labs.
    Let me thank all of you for agreeing to testify today. It 
is an exceptionally important hearing but also one whose time 
has come and is due.
    This hearing will examine five issues that have been 
highlighted in part by the recent National Academies of Science 
report on laboratory management.
    First, how can the relationship between the NNSA and its 
laboratories be streamlined to avoid the layers of bureaucracy 
as it currently exists?
    Second, how can the NNSA and its laboratories restore a 
relationship of trust to minimize the detailed reporting 
requirements that have resulted from a lack of trust?
    Third, how can the NNSA be aligned within the Department of 
Energy (DOE) to achieve independence as originally envisioned 
when it was created 12 years ago?
    Fourth, how can your laboratories be viewed as national 
security assets to the U.S. Government as a whole?
    Fifth, can your laboratories, as currently configured and 
funded, meet the current Department of Defense (DOD) nuclear 
stockpile requirements?
    Those are the questions.
    The New Strategic Arms Reduction Treaty (START) brought 
great attention to modernizing the laboratories' infrastructure 
which in many cases dates over 60 years to the Manhattan 
Project. The Budget Control Act has put constraints on the rate 
at which much of this modernization can be achieved, but its 
importance has not been lost on this Congress. That in order to 
safely reduce the number of nuclear weapons deployed, we must 
at a minimum ensure that our infrastructure can maintain these 
fewer numbers of weapons so they are safe, secure, and 
militarily effective.
    Many experts such as former Secretaries Bill Perry and Jim 
Schlesinger have stated the importance of this issue, and as 
recently as last month, General Kehler, the Commander in Chief 
of U.S. Strategic Command (STRATCOM), said before the full 
committee that, ``of all the elements of the nuclear 
enterprise, I am most concerned with the potential for 
declining or inadequate investment in the nuclear weapons 
enterprise that would result in our inability to sustain the 
deterrent force.'' These are very serious words from the 
combatant commander that is charged with ensuring our nuclear 
deterrent and that it is capable of meeting the requirements 
levied on it by the President and the Secretary of Defense.
    As we examine the needs of each of your laboratories and 
the large investments that they require to modernize, we in 
Congress are worried and concerned that these investments will 
not be used to the maximum extent possible if the relationship 
between the NNSA and its laboratories is, as described by our 
National Academies witnesses, ``dysfunctional.''
    I look forward to hearing from each of you in the most 
candid manner possible. We are emphasizing candor, not that we 
would expect anything else, but I want to make sure that it is 
clear that we are really pushing hard because this is your 
chance to inform this subcommittee on the issues we must be 
concerned with to help fix a broken relationship between the 
NNSA and its laboratories as we begin to draft our annual 
authorization bill for DOD and DOE.
    I also have the white paper endorsed by the three 
laboratory directors, and I would like to ask unanimous consent 
that it be entered into the record.
    [The information referred to follows:]
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    Senator Nelson. When Senator Inhofe gets here--my good 
friend and colleague--we will ask him for any opening remarks 
that he may make.
    Now it is an opportunity, if we might just start with Dr. 
Patel and go down the line. I am going to emphasize brevity 
but, on the other hand, not at the risk of candor. Dr. Patel?

    STATEMENT OF DR. C. KUMAR N. PATEL, PRESIDENT AND CHIEF 
   EXECUTIVE OFFICER, PRANALYTICA, INC.; CO-CHAIR, NATIONAL 
  RESEARCH COUNCIL COMMITTEE ON REVIEW OF THE QUALITY OF THE 
 MANAGEMENT AND OF THE SCIENCE AND ENGINEERING RESEARCH AT THE 
 DEPARTMENT OF ENERGY'S NATIONAL SECURITY LABORATORIES-PHASE 1

    Dr. Patel. Thank you, Mr. Chairman. As you so well pointed 
out the importance of the three national laboratories, this 
study dealt with the present state looking at the management of 
science and engineering and how it affects the long-term 
sustainability of these activities while these activities, 
science and engineering, are very important for maintaining the 
nuclear stockpile safety, security, and its reliance.
    Overall, we find that the status of management of science 
and engineering at the laboratories is in good shape, in good 
hands. However, there are a number of issues that need 
immediate attention, and these include, first of all, blurring 
of the responsibilities between NNSA and the laboratory 
managers, undue emphasis on formalities, and management by 
transaction rather than by oversight. The issue of management 
and oversight is not the same. Management at the microscopic 
level slows down individual's capability to be creative. It 
slows down the amount of work that gets done and overall it 
turns out to be less cost-effective than what it should be.
    Yes, there were some problems earlier with respect to 
safety and security, but those are well under control. Now the 
time has come to carry out the management and oversight not by 
transaction but by having the proper systems in place because 
that, as we see from industrial experience, turns out to be the 
most cost-effective way of spending funds which are allocated, 
in this case public monies.
    Mr. Chairman, thank you very much for allowing me to open 
the hearing.
    [The joint prepared statement of Dr. Shank and Dr. Patel 
follows:]

 Joint Prepared Statement by Dr. Charles V. Shank and Dr. C. Kumar N. 
                                 Patel

    Good afternoon Mr. Chairman, Ranking Member Sessions, and members 
of the Strategic Forces Subcommittee of the Senate Armed Services 
Committee:
    My name is C. Kumar N. Patel. I am the President and Chief 
Executive Officer (CEO) of Pranalytica, a company located in Santa 
Monica, CA. Concurrently, I am also a Professor of Physics and 
Astronomy at UCLA. I had the privilege of co-chairing with Dr. Shank 
the Committee on Review of the Quality of the Management and of the 
Science and Engineering Research at the Department of Energy's (DOE) 
National Security Laboratories at the National Research Council. Dr. 
Shank and I will provide the highlights of the committee's findings and 
are available to respond to your questions.
    The National Research Council is the operating arm of the National 
Academy of Sciences, the National Academy of Engineering, and the 
Institute of Medicine of the National Academies, chartered by Congress 
in 1863 to advise the government on matters of science and technology.

                               STUDY TASK

    The National Defense Authorization Act for Fiscal Year 2010 
identified concerns regarding the quality and management of Science and 
Engineering at the three National Security Labs and in turn mandated 
that NNSA task the National Research Council (NRC) to study the quality 
and management of Science and Engineering (S&E) at these Laboratories: 
Los Alamos National Laboratory (LANL), Lawrence Livermore Laboratory 
(LLNL), and Sandia National Laboratories (SNL). The study is being 
conducted in two phases. Phase one, which is completed, concerns 
management of S&E. The second phase will look in detail at selected S&E 
subject areas.
    Health and vitality of science and engineering is critical for the 
long term viability of the National Security Laboratories and their 
ability to support the national defense and security needs, especially 
as they concern our nuclear weapons. The primary mission of these 
laboratories, assuring the safety and reliability of our nuclear 
stockpile, requires that the science and engineering that forms the 
underpinning of the needed technical capability, remain at the 
forefront by having the best possible scientists and engineers and by 
having the best management practices that maximizes the productivity of 
the available resources.
    Our report today addresses the management of the three NNSA 
laboratories with specific emphasis on how management affects the 
quality of the science and engineering needed to fulfill the charter of 
these laboratories. ``Quality of S&E'' for the purposes of the report 
measures the expertise and accomplishments in those areas of science 
and engineering that are necessary to accomplish the laboratories' 
missions. ``Quality of the management of S&E'' measures management's 
capability to build, maintain and nurture S&E personnel and expertise 
for current and future mission needs. Management includes government 
(primarily NNSA and its three site offices), operations (M&O) 
contractors, and onsite laboratory management.
    Our overall conclusion is that the laboratory management is aware 
of the importance of S&E for accomplishing their primary mission and 
that the management is committed to assuring the long term health and 
vitality of S&E. However, we have discerned a number of issues that 
need early, if not immediate, attention to meet the long-term goals of 
excellence of S&E. These include the blurring of the responsibilities 
of NNSA and the laboratory managers, undue emphasis on formalities of 
management, often as a result of congressional reporting requirements, 
an apparent loss of trust between NNSA and the Laboratories and last 
but not the least enormous pressure on the financial resources 
available for carrying out the S&E mission. We recognize that some of 
the onerous reporting requirements arose from serious lapses of safety 
and security matters. But we have also concluded that most if not all 
of the safety and security issues are under control and that it is 
appropriate now to transfer the responsibility for these activities to 
the local management. We have provided a number of recommendations, 
which if implemented would help the laboratory management in carrying 
out their task in a cost effective manner.

                          CONDUCT OF THE STUDY

    To conduct the first phase, the NRC formed a study committee whose 
membership was carefully chosen to provide broad and deep applicable 
expertise and experience in the management of science and engineering 
at major research and development laboratories. The committee members 
include former directors of major government and industry laboratories, 
current and former laboratory executives, and others with relevant 
experience and expertise. The primary mode of gathering information was 
through presentations and testimony from, and discussions with, a 
substantial number of experts. These included current and former 
managers and technical staff associated with the NNSA, the DOE, and the 
laboratories, and the site offices. The study committee's meetings 
included visits to each of the three laboratories for extensive 
discussions with laboratory staff, as well as open public comment 
sessions at which current and former laboratory employees, union 
representatives, and others were given the opportunity to share their 
views and experiences. The committee also examined the most recent 
available management and operations (M&O) contracts, performance 
evaluation plans (PEP), performance evaluation reports (PER), contract 
management plans, parent organization oversight plans, and other 
similar documents for each of the three laboratories.
    The issue of management of these three laboratories is complex, and 
has a long history. Within the mandated terms of reference of the 
study, the committee concluded that the basic questions before it are: 
(1) how well does the current management system support the conduct of 
quality science and engineering now and into the future? (2) are there 
significant management problems that need to be solved? (3) to what 
extent are these problems the result of the change in contractors at 
LANL and LLNL? (4) what are the most important problems, and what does 
the committee recommend to resolve those problems? The committee set as 
its goal the production of a short report that focuses on what it found 
to be most important. Accordingly, our report addresses four topics: 
the contracts; research base and the evolution of the mission; the 
broken relationship; and management of S&E at the laboratories. We will 
speak to these, and then conclude with our observations concerning the 
future.

                             STUDY FINDINGS

Contracts
    The contracting relationships between the DOE and its laboratories 
have in some cases endured for many decades. In 2004, Congress mandated 
that the longstanding contracts with the University of California to 
manage Lawrence Livermore and Los Alamos national laboratories (LLNL 
and LANL) be re-competed. As a result, these two contracts were awarded 
to two independent limited liability corporations (LLCs) that both 
include Bechtel Corporation and the University of California in their 
parent organizations. Subsequently, Congress developed concerns about 
the quality of science and engineering at the Laboratories, including 
whether changes in contracts and contractors may have had a deleterious 
effect on the quality of science and engineering.
    The study committee heard testimony that LLNL and LANL were having 
morale crises as a consequence of the change of management from a 
public entity to a for-profit contractor. A number of current and 
former employees of these laboratories expressed concerns about 
deterioration of morale at the laboratories along with ongoing or 
potential declines in the quality of science and engineering. Many 
attributed those inferred trends to the new M&O contracts and 
contractors. While it is true that all three labs have been under cost 
and funding pressure, we did not find a morale crisis related to 
actions of the new contractors. The costs of the recompeted contracts 
are significantly greater than the previous contracting arrangements; 
this is due primarily to the changes in contractor fees, state taxes, 
and pensions. Some have been concerned that contractors pursuing fee 
might not act in the public interest. The laboratory directors stated 
that while fee is important, their primary objective remains to manage 
the laboratories in the public interest. This concern is an important 
one and constant vigilance will be required.

Evolution of the Mission
    An evolution of the laboratory missions to ``National Security 
Laboratories'' is well underway. Deputy NNSA Administrator Don Cook 
presented to the Committee a vision for the laboratories, including a 
governance charter among four agencies (the Departments of Energy, 
Homeland Security, and Defense, plus the Office of the Director of 
National Intelligence) to take advantage of the S&E capabilities of 
these three laboratories. In a time of constrained budgets, broadening 
the mandate to a national security mission helps preserve S&E expertise 
by working on problems posed by partner agencies. Access to this 
problem set helps the NNSA laboratories to recruit and retain S&E 
capabilities beyond what could be achieved solely with available funds 
in the stockpile stewardship program. While such work for others is 
very important for the future of S&E at the laboratories, all three of 
the laboratory directors were very clear that maintenance of the 
stockpile remains the core mission of the labs.
    The committee recommends that Congress recognize that maintenance 
of the stockpile remains the core mission of the labs and that other 
national security mission work contributes to the accomplishment of 
that mission and in that context Congress should consider endorsing and 
supporting in some way the evolution of the NNSA laboratories to 
National Security Laboratories as described in the July 2010 four-
agency Governance Charter for an Interagency Council on the Strategic 
Capability of DOE National Laboratories.
    A crucial part of the laboratories' ability to conduct their 
missions is derived from Laboratory Directed Research and Development 
(LDRD), the primary source for internally directed R&D funding. Among 
its other benefits, LDRD provides a major resource for attracting, 
supporting and training staff at each laboratory.
    The committee recommends that Congress and NNSA maintain strong 
support of the LDRD program as it is an essential component of enabling 
the long-term viability of the laboratories.
    Historically, the laboratories had another source of discretionary 
research spending.
    The weapons program (at each laboratory) had the flexibility to use 
part of its budget to fund a robust research program, in support of the 
core weapons mission. Currently, the weapons program budget is 
subdivided into so many categories with so many restrictions that this 
important flexibility is effectively lost. This loss in funding 
flexibility has significantly reduced the amount of core program 
research being performed at the laboratories. This lessens the appeal 
of the laboratories when recruiting.
    The committee recommends that Congress reduce the number of 
restrictive budget reporting categories in the Nuclear Weapons Program 
and permit the use of such funds to support a robust core weapons 
research program and further develop necessary S&E capability.

Relationship Between the Labs and NNSA Oversight
    We observe that the relationship between NNSA and its National 
Security Laboratories is broken. This very seriously degrades the 
ability to manage for quality S&E. Both NNSA and the laboratories 
recognize the importance of quality S&E, and each believes it is 
working to achieve that goal, but their dysfunctional relationship 
seriously threatens that common goal. This is not a new observation, as 
it has been discussed in previous reports. There has been a breakdown 
of trust and an erosion of the partnering between the laboratories and 
NNSA to solve complex S&E problems.
    The basic substantive relationship between NNSA and the 
laboratories is a Federally Funded Research and Development Center 
(FFRDC) partnership. The management relationship is a Government Owned, 
Contractor Operated relationship. The FFRDC relationship is based on a 
partnership between the government and the laboratory in which the 
government decides what problems need to be addressed, and the 
contractor determines how best to address those problems. There is a 
perception among staff at the three laboratories that NNSA has moved 
from partnering with the laboratories to solve scientific and 
engineering problems to assigning tasks and specific S&E solutions with 
detailed implementation instructions. This approach precludes taking 
full advantage of the intellectual and management skills that taxpayer 
dollars have purchased. Similar issues are found in transactional 
oversight of safety, business, security, and operations. Science and 
engineering quality is at risk when laboratory scientists and engineers 
are not encouraged to bring forth their creative ideas in partnership 
with NNSA to solve problems vital to our national security.
    There is conflict and confusion over management roles and 
responsibilities of organizations and individuals. For example, the 
committee heard reports of mid-level issues being elevated to the 
laboratory director level because there was no clarity about how to 
resolve disputes between a laboratory and an NNSA Site Office. These 
factors do not encourage the stable management that is necessary to 
ensure success of long-term investment and planning. Another example 
was a recent instance in which NNSA HQ tried to overrule a Laboratory's 
best scientific judgment about how to carry out a scientific task. 
Subsequently, language appeared in a congressional report opposing that 
NNSA instruction. A better mechanism should be established for 
resolving technical disputes, and they should definitely not be 
elevated to top NNSA management and congressional levels. A technical 
advisory committee, established at the NNSA level, would be a helpful 
mechanism for filling this gap in S&E management. More generally, such 
an advisory committee could monitor progress on other aspects of roles 
and responsibilities.
    This erosion of the trust relationship is especially prominent with 
respect to Los Alamos, where past failures in safety, security, and 
business practices attracted much national attention and public 
criticism. But it has also spilled over to Lawrence Livermore and 
Sandia National Laboratories. The loss of trust in the ability of the 
laboratories to maintain operational goals such as safety, security, 
environmental responsibility and fiscal integrity has produced detailed 
scrutiny by NNSA HQ and site offices and increased aversion to risk. A 
major byproduct of this has been to create a bias against experimental 
work. The bias is problematic because experimental science is at the 
very heart of the scientific method.
    The committee recommends that NNSA and each of the Laboratories 
commit to the goal of rebalancing the zmanagerial and governance 
relationship to build in a higher level of trust in program execution 
and laboratory operations in general.
    The committee recommends that NNSA and the Laboratories agree on a 
set of principles that clearly lay out the boundaries and roles of each 
management structure, and also that program managers at headquarters, 
the Site Offices, and in the laboratories be directed to abide by these 
principles.
    For example, the committee suggests that, among other measures, the 
Site Manager and the Director and/or Deputy Director of each laboratory 
apply a team-based process to identify and agree on eliminating certain 
oversight procedures that are simply not necessary or related to the 
overall goals of the Laboratory. Similarly, some mechanism should be 
established to filter program tasks at both the headquarters level and 
at the laboratory senior management level to assure that each tasking 
is necessary and consistent with the agreed management principles.
    The committee recommends that the goal of rebalancing the 
relationship and the set of principles laying out the boundaries and 
roles of each management structure be memorialized in memoranda of 
understanding between NNSA and its Laboratories. Performance against 
these understandings should be assessed on an annual basis over a 5-
year period and reported to Congress.

                               THE FUTURE

    A key to ongoing laboratory success has been a strong focus on the 
long-term and on maintaining deep technical capability. Looking 
forward, the new management structure of the Laboratories, which relies 
on the introduction of industrial and other private sector partners, 
must assure that this long-term focus is maintained in words and in 
deeds.
    A great deal of work that has been accomplished over the years in 
safety and security has required extensive effort by the NNSA and the 
laboratories. We believe these efforts have been strengthened to the 
point where they no longer need the current level special attention to 
assure high quality results in laboratory operations.
    The committee recommends that NNSA, Congress, and top management of 
the laboratories recognize that the safety and security systems at the 
Laboratories have been strengthened to the point where they no longer 
need special attention. NNSA and Laboratory management should explore 
ways by which the administrative, safety, and security costs can be 
reduced over time consistent with maintaining high quality efforts in 
these areas, so that they not impose an excessive burden on essential 
S&E activities.
    The committee recognizes that this cannot happen unless the broken 
relationship is fixed, but the committee also recognizes that these 
operational problems contributed to the broken relationship.

    Senator Nelson. My colleague and friend has arrived. In 
case you have any opening remarks, Senator Inhofe, the floor is 
yours.

              STATEMENT OF SENATOR JAMES M. INHOFE

    Senator Inhofe. Thank you.
    I am anxious to pursue this with this panel that we have, 
and I think we have the right people that are here right now. 
The Perry/Schlesinger Commission stated it was alarmed by the 
disrepair and neglect of our nuclear weapons stockpile and our 
complex. Vice President Biden has said maintaining our nuclear 
stockpile and modernization is essential. President Obama had 
said back in December 2010, I recognize that nuclear 
modernization requires investment in the long term. He goes on, 
making the commitment to do what is necessary.
    However, at the same time, we hear from Dr. Michael 
Anastasio of Los Alamos National Lab. He said, I am very 
concerned about that budget profile. That profile delays many 
of the issues that are a concern to us today especially in the 
science and engineering area. Much of the planned funding 
increases for weapons and activities do not come to fruition 
until the second half of a 10-year period. Now, we are seeing a 
lot of that nowadays. They say, yes, we are going to do it and 
the amount is going to be same. However, it is not going to 
happen for 5 more years. I think we can read in there what we 
want to.
    Secretary Gates talked about it. He said, no way can we 
maintain a credible deterrent and reduce the number of weapons 
in our stockpile without either resorting to testing our 
stockpile or pursuing a modernization program. I think we all 
understand. One or the other is necessary. After the New START 
program, we were promised by the administration to have robust 
resources backing behind it, and yet that has not happened.
    So, I think in the full committee, we heard testimony from 
General Kehler, the Commander of STRATCOM, who informed us of 
his concern with the budget and its failure to demonstrate a 
viable, long-term modernization strategy. Our witnesses today 
provide yet another opportunity to assess the adequacy of the 
request. I look forward to hearing from them, our national 
nuclear weapons labs, to better understand the impact of the 
NNSA's budget, what it will have on their ability to certify 
our existing stockpile.
    So I say this and I am anxious to hear the truth from you. 
Can we really do all these reductions? Can we not keep the 
commitment that we made at one time and carry out what you have 
an obligation, in terms of certification?
    So those are my concerns. Have we had one witness' 
testimony so far?
    Senator Nelson. Yes, Dr. Patel.
    Senator Inhofe. Okay, continue and thank you, Mr. Chairman.
    Senator Nelson. Thank you, Senator Inhofe. We stress how we 
have a working relationship, and I look forward to the 
questions here shortly.
    Dr. Shank?

STATEMENT OF DR. CHARLES V. SHANK, SENIOR FELLOW, HOWARD HUGHES 
    MEDICAL INSTITUTE; CO-CHAIR, NATIONAL RESEARCH COUNCIL 
COMMITTEE ON REVIEW OF THE QUALITY OF THE MANAGEMENT AND OF THE 
SCIENCE AND ENGINEERING RESEARCH AT THE DEPARTMENT OF ENERGY'S 
             NATIONAL SECURITY LABORATORIES-PHASE 1

    Dr. Shank. Thank you for the opportunity to describe the 
results of our report on science and engineering management at 
the three national security laboratories.
    I wanted to emphasize in my remarks some of the 
recommendations that we made as a result of our deliberations 
of our committee. We visited all three laboratories. We heard 
from management and staff at all levels.
    First is the evolution of the mission. We heard a 
compelling discussion from the Deputy NNSA Administrator Don 
Cook talking about a new governance charter among four 
agencies, the DOE, the Department of Homeland Security (DHS), 
DOD, and the Office of the Director of National Intelligence 
(ODNI), that would allow the laboratories to make a transition 
from weapons laboratories, to more broadly national security 
laboratories and that these laboratories would use their 
capabilities to tackle problems of importance to all four 
agencies. We think that in a time of constrained budgets and 
the complexity of the Stockpile Stewardship Program (SSP), the 
opportunity to maintain capabilities by working on problems for 
other agencies is a win-win and it is something that we hope 
that this expertise can be taken advantage and it is something 
that is encouraged by Congress.
    Second, I want to spend some time discussing the 
relationship between the laboratories and oversight. We think 
that oversight is an extremely important responsibility of the 
NNSA. However, we observed that the relationship between the 
NNSA and the national security labs appears be broken. We think 
that this seriously degrades the ability to manage quality 
science and engineering, and we recognize having that high 
quality in science and engineering is very important to achieve 
the mission ends, but a dysfunctional relationship seriously 
threatens that goal.
    This is not a new observation. It has been discussed in 
previous reports. We see what appears to be a breakdown of 
trust, an erosion of partnering between the labs and the NNSA 
to solve complex problems. As you are well aware, the basic 
elements of this relationship between NNSA and its laboratories 
are a Federally Funded Research and Development Center (FFRDC) 
relationship. We have seen an evolution of NNSA moving from 
partnering with the laboratories to solve scientific and 
engineering problems to assigning tasks with specific solutions 
and implementation instructions. This approach precludes taking 
full advantage of the intellectual and management skills that 
have been purchased to manage these laboratories under 
contract. In addition, we see issues in transactional oversight 
of safety, business, security, and operations.
    We think that there is a conflict and confusion over 
management roles and responsibility. We think this sometimes 
leads to scientific disputes. We have seen an example, a recent 
instance, in which NNSA headquarters tried to overrule a 
laboratory's best scientific judgment on how to carry out a 
task and subsequently language appeared in a congressional 
report opposing the NNSA instruction. We think a better 
mechanism needs to be made to resolve scientific and technical 
issues. We are recommending that a technical advisory committee 
be established at the NNSA level. That would be a helpful 
mechanism in being able to resolve disputes and look at more 
broadly how the operations of the laboratories can be most 
effectively accomplished.
    The erosion of trust is especially prominent with respect 
to Los Alamos, where past affairs and safety and security and 
business practices have attracted much national attention. But 
it has also spilled over to the other laboratories as well. 
This loss of trust and emphasis on transactional management has 
created an environment in which there has been a bias against 
experimental work. We think that this is a very important issue 
and one that needs to be dealt with.
    We have heard from NNSA and all parties that Los Alamos has 
greatly improved its performance, and we think that it is time 
to recognize that this has occurred and that the laboratories 
have strengthened to the point where they no longer need clear, 
special attention. We are hoping that the relationship between 
DOE and the NNSA can be rationalized and renormalized in a way 
that will make the laboratories both effective and successful 
in their future missions.
    Senator Nelson. Thank you very much.
    Dr. McMillan.

  STATEMENT OF DR. CHARLES F. McMILLAN, DIRECTOR, LOS ALAMOS 
                      NATIONAL LABORATORY

    Dr. McMillan. Thank you, Chairman Nelson. Ranking Member 
Inhofe, thank you. I appreciate the opportunity to speak here 
today.
    I am Charlie McMillan. I am the Director at Los Alamos. I 
bring to this discussion 29 years of experience in the weapons 
program. Nearly 2 decades of that was with my colleagues at 
Livermore. The last 6 years have been at Los Alamos, and for 
about the last year I have been the Director.
    I am proud of the incredible staff at Los Alamos, 
especially during today's budget challenges and the recent 
workforce actions I have had to take at the laboratory. Their 
service to the Nation has been unwavering as it has been for 
the last 70 years.
    Mr. Chairman, the 2010 Nuclear Posture Review (NPR), 
coupled with the 1251 report, set a course for the deterrent 
that in my view was credible and consistent. Now, because of 
budget pressure, I am concerned that we do not yet have a path 
forward for meeting all of our commitments. We continue to work 
closely with our colleagues at both DOE and DOD to find the 
best path forward.
    NNSA governance will inevitably play a key role as we 
address mission and budget challenges.
    The recent National Academy of Sciences report described 
the NNSA laboratory relationship as broken. Those were the 
words you used. It described a lack of trust, burdensome 
oversight, and structural flaws.
    The weapons laboratories have served as trusted technical 
advisors to the government. Today, we are often managed as 
traditional contractors rather than as partners who can provide 
expertise to solve technical issues. Trust has been replaced by 
reliance on operational formality. As the Academy said, this 
approach is a mismatch. It stifles the innovation we must have 
to address challenging issues in our nuclear deterrent. It is 
the ability to innovate that drives the staff, that I have 
responsibility for at Los Alamos, to produce at the highest 
levels for our Nation. I believe that a governance model must 
include the ability to work within a risk framework to 
accomplish goals and priorities set by Congress and the 
administration.
    Mr. Chairman, there are other issues in the nuclear 
enterprise. I am concerned that we are shifting the balance of 
priorities too far toward the near-term at the expense of 
longer-term science needed to address future problems that will 
affect the stockpile. Deferring the construction of the 
Chemistry and Metallurgy Research Replacement-Nuclear Facility 
(CMRR-NF) leaves the country with no known capability to meet 
the current expectation. Those expectations are something like 
50 to 80 pits per year. Furthermore, because of limited and 
aging infrastructure, it will take significant investments to 
produce even 20 or 30 pits per year.
    With appropriate infrastructure investments, we can sustain 
a limited pit manufacturing capability. However, we will need 
to augment new pit production with a pit reuse strategy that is 
still in development. We have available legacy pits that are 
candidates for reuse. I am cautiously optimistic that we can 
reuse some of these pits, but we must do the scientific work to 
further understand the effects of aging and to provide modern 
safety, safety that starts within sensitive high explosive 
systems. If we choose this path, it will require an investment 
over the next 5 to 10 years.
    Let me offer an analogy for you. It is a little bit like 
taking an engine out of a 1965 Ford Mustang and putting it into 
a 2012 Mustang and continuing to meet 2012 emission standards. 
You can probably do it but not without a lot of work.
    Mr. Chairman, we succeed today because of the investments 
our Nation has made over the last 20 years, investments that 
have produced capabilities and insights that are already 
addressing today's challenges. Two examples would be the Dual-
Axis Radiographic Hydrodynamic Test Facility, as well as our 
modern high-performance computing capabilities. We must prepare 
today for the challenges we will inevitably face in the future.
    In closing, I am increasingly concerned. Today, I cannot 
say with confidence that we are on a path to a healthy program. 
The laboratories that we serve are among the greatest, 
supporting the deterrence with knowledge second to none. The 
country needs to decide whether it is willing to maintain this 
level into the future. If so, balanced investments must be made 
in life extension today, as well as in our abilities to solve 
the problems that we will inevitably face in the future. If 
not, we risk both the future of the deterrent and the ability 
of the laboratory to solve issues as they arise.
    Thank you and I look forward to your questions.
    [The prepared statement of Dr. McMillan follows:]

             Prepared Statement by Dr. Charles F. McMillan

    Chairman Nelson, Ranking Member Sessions, and members of the 
subcommittee, thank you for the opportunity to appear before you today.
    I am Dr. Charles McMillan, Director of Los Alamos National 
Laboratory (LANL). My 29-year commitment to America's nuclear weapons 
program encompasses over two decades of service at Lawrence Livermore 
National Laboratory (LLNL) and 6 years at Los Alamos. Following the 
moratorium on nuclear testing, I participated in the discussions that 
helped establish Stockpile Stewardship.
    Since I assumed leadership at Los Alamos almost a year ago, it has 
become clear that our Nation faces a difficult budget situation, and 
hard choices must be made. I am proud of the way that the men and women 
of Los Alamos have played their role in helping to meet these 
challenges with professionalism and innovation. Through difficult 
times, they are maintaining a focus that is delivering on the 
Laboratory's mission. I look forward to working with you as we continue 
delivering national security science in both the present and the future 
by making challenging investment decisions--while keeping faith with a 
workforce that has demonstrated career-long dedication to the service 
of our Nation.
    I continue to believe that the direction laid out in the Nuclear 
Posture Review (NPR) and the 1251 Report provides an appropriate and 
technically sound course. These documents outline a consistent plan 
that, if implemented, would do the work necessary to support the 
Nation's stockpile through modernization of our nuclear infrastructure 
and a warhead life extension program (LEP).
    Now, because of changes in budget and policy priorities, I am 
concerned that we do not yet have a clear path forward for meeting all 
of our commitments to the stockpile.
    The National Nuclear Security Agency (NNSA) governance will play a 
key role in determining both our efficiency and effectiveness as we 
address looming mission and budget challenges. In my view, a strong 
partnership between NNSA and the laboratories, building on the full 
opportunities afforded by our status as Federally Funded Research and 
Development Centers (FFRDC), can serve to reestablish the trust that 
has been a source of solutions in previous challenges.

                               GOVERNANCE

    The National Academy of Sciences (NAS) report on oversight of the 
NNSA labs is the latest in a series of reports that has highlighted 
governance issues for the laboratories: governance that is 
characterized by a lack of trust, burdensome oversight, and structural 
flaws. The issues they identified in their report ring true in my 
experience at the Laboratory.

          ``An erosion of trust on both sides of the relationship 
        shapes the oversight and operation of the laboratories. This in 
        turn has resulted in an excessive reliance on operational 
        formality in important aspects of Laboratory operations, 
        including the conduct of science and engineering . . . '' (NAS 
        report, page 23, emphasis added)

    In my view, we have become so focused on operational formality that 
we risk losing sight of the reasons why the government-owned, 
contractor-operated business arrangements were created in the first 
place. Our common objective is to safely maintain the stockpile using 
best business practices; operational formality is a means to that end. 
As the NAS report states, this formality can be a mismatch when applied 
to creative activities such as science and engineering (report, page 
24).
    I agree with the report's statements on oversight:

          `` . . . 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. NNSA and Laboratory management 
        should explore ways by which the administrative, safety, and 
        security costs can be reduced, so that they not impose an 
        excessive burden on essential S&E activities.'' (NAS 
        recommendation 5-1, page 31, emphasis added)

    While NNSA had an auspicious beginning, the promise of semi-
autonomy has not yet been fulfilled. Duplication and overlap remain 
between the Department of Energy (DOE) and NNSA regulations and 
guidance. As an example, the DOE Office of Health, Safety, and Security 
still plays a significant role in NNSA--despite NNSA having its own 
regulations and guidance.
    Structural issues continue to be a challenge for NNSA:

          ``The 2001 Foster Panel report reiterated the points it made 
        in its previous report, emphasizing that the Secretary of 
        Energy must remove the unnecessary duplication of staff in such 
        areas as security, environmental oversight, safety, and 
        resource management.'' (NAS report, page 51)

    The weapons laboratories are FFRDCs that serve as trusted, 
independent advisers to the government on complex technical issues--
foremost among these being nuclear weapons. For much of the last 
decade, I have seen a trend within NNSA toward treating the 
laboratories more like traditional contractors rather than fully 
employing the capabilities they offer the government through the 
special FFRDC relationship (FAR 35.017).
    A maturing model between the labs and NNSA would include the 
ability to work within a framework to accomplish goals established by 
policies set by Congress and the administration. Changing the type of 
oversight from transactional to strategic can lead to a smaller 
bureaucracy, and thus reduce the size of the infrastructure needed to 
respond to that bureaucracy.
    In the last few months, the NNSA leadership has begun to reengage 
the lab directors in substantive dialogue on program priorities. This 
is a first step toward reestablishing the type of trust that was 
necessary to create the stewardship program. Many steps remain if we 
are to meet the challenge of the next decade: modernizing the stockpile 
at a pace that exceeds our past experience.
    There are examples of increasing burden and in other cases where 
there is a glimmer of hope. I mention two of the latter.

         The Office of Defense Nuclear Security (DNS) has 
        worked to balance the need for robust security with the reality 
        of shrinking Federal security budgets. The DNS engages 
        individual sites to understand programmatic needs and then 
        develops a solid approach that allows work to be accomplished 
        within a well-defined risk envelope.
         In recent months, we have worked with our colleagues 
        at the Los Alamos Site Office to develop a risk-based framework 
        for evaluating computer system security and streamlining 
        documentation required to operate these systems. This framework 
        may reduce a bookshelf of documentation to a single binder.

    While these examples illustrate positive steps to reduce 
administrative costs, they remain the exception in a system that has 
become moribund over many years. Studies such as those cited above have 
examined structural options for NNSA; all have merit, none are perfect. 
Whichever path we adopt for the future governance of the laboratories, 
it is essential that all relevant branches of government are aligned to 
ensure its success.

                         NUCLEAR INFRASTRUCTURE

    The existing Chemistry and Metallurgy Research (CMR) facility at 
Los Alamos is 60 years old, sits on a seismic fault, and, as the 
Congressional Commission on the Strategic Posture of the United States 
said in 2009, ``is already well past the end of its planned life.'' The 
facility is unable to meet the high-volume analysis needed to meet the 
Department of Defense (DOD) expectation of 50 to 80 newly manufactured 
pits per year. Three wings of CMR's six have been closed because of 
their location over the fault and to reduce risk. At the direction of 
NNSA, we are preparing to retire the facility in 2019.
    The decision to defer construction of the Chemistry and Metallurgy 
Research Replacement-Nuclear Facility (CMRR-NF) leaves the United 
States with no known capability to make 50 to 80 newly-produced pits on 
the timescales planned for stockpile modernization. This will affect 
our path forward on the W78 LEP.
    Let me be very clear: CMRR-NF is not a manufacturing facility for 
pits. It fulfills a critical mission in supporting the analytical 
chemistry and metallurgy needed to certify that the plutonium used in 
the stockpile meets basic material requirements. The ability at CMRR-NF 
to quickly analyze and characterize special nuclear materials--to know 
where they were made, their purity, and their chemical and mechanical 
properties--also underpins our work for the Nation in nonproliferation, 
counterterrorism, and treaty verification missions. Pit production 
occurs and will continue in Building PF-4 at Los Alamos. CMRR-NF was 
designed to provide needed capacity for materials characterization, 
waste staging and shipment, non-destructive assay, and vault storage. 
In the absence of CMRR-NF, the limited floor space in PF-4 must be used 
to address these functions, albeit at reduced levels.
    At the direction of NNSA, we are in the process of completing a 60-
day analysis of existing plutonium capabilities within the Radiation 
Laboratory Utility Office Building (RLUOB) at Los Alamos, Superblock at 
Livermore, and other sites. Because of our limited plutonium 
infrastructure, investments that are not in the current plan will be 
required to produce even 20 to 30 pits per year using all of these 
facilities. In this study, LANL is examining accelerating the removal 
of material from the vault in PF-4, expanding the capability of RLUOB, 
and constructing a system to transport materials between PF-4 and 
RLUOB. The not-yet-budgeted costs associated with these changes are 
expected to extend over 5 to 8 years.

                               PIT REUSE

    Pit reuse has been suggested as a way to bridge the shortfall in 
newly-produced pits caused by delaying CMRR-NF construction. The nation 
has pits that are not needed in current systems. These are candidates 
for use in a modernized stockpile. While I am cautiously optimistic 
that some of these pits can be reused, two important issues must be 
addressed before certification for stockpile use:

         First, continued progress in understanding the effects 
        of pit aging.
         Second, the system modifications necessary to ensure 
        that pits designed for use with conventional explosives can be 
        reused in modern, insensitive high explosive systems.

    Both are challenging scientific problems.
    In 2006, the JASON issued a report on plutonium aging based on 
studies conducted by LANL and LLNL. In a letter responding to this 
report to then-chairman John Warner of the Senate Armed Services 
Committee, NNSA said that it ``is imperative that we continue to assess 
plutonium aging through vigilant surveillance and scientific 
evaluation, since the plutonium-aging database only extends to 
approximately 48 years for naturally aged material and 60 years for the 
accelerated aged material. The primary performance database from 
underground testing is even more limited.'' Unfortunately, since this 
letter was written, work in this area has been constrained by funding; 
much work remains to be done.
    The pits that are available for reuse were not designed to provide 
the safety of a modernized stockpile using insensitive high explosives. 
While we have concepts for using these pits in a modernized stockpile, 
the extensive work required to convert these concepts to systems that 
could be certified is yet to be done.
    Consider the following analogy: using old pits in a modernized 
stockpile would be like taking an engine from a 1965 Mustang and 
installing it in a 2012 model while continuing to meet 2012 emission 
requirements. It might be possible, but not without a lot of work, not 
to mention impacts to the other parts under the hood. Furthermore, 
certifying that it would work without ever driving the car would be 
challenging.

                        LIFE EXTENSION PROGRAMS

    As our systems age, LEPs have become necessary to continue 
confidence in the safety, security, and reliability of the stockpile. 
It is in LEPs that we see a return on investments made in long term 
science.
    I am pleased to report that Los Alamos Life Extension activities on 
the W76-1 continue smoothly at the plants with Los Alamos providing 
technical support as needed. We will continue our engagement to monitor 
product quality and ensure that design intent is maintained.
    As you are aware, the Nuclear Weapons Council (NWC) authorized 
Phase 6.3 for the B61 LEP with a first production unit (FPU) in 2019. 
At Los Alamos, we are on a path to meet this deliverable because of 
investments that have been made over many years in the science and 
engineering campaigns. Tools such as the Dual Axis Radiographic Hydro-
Test (DARHT) Facility, high performance computing and the Advanced 
Simulation and Computing (ASC) Program codes that we use to predict 
weapons performance are being applied today to the B61 LEP. We have 
used the investments in these campaigns to develop the technologies for 
gas transfer systems (GTS) so that we can quickly and cost-effectively 
implement specific designs for the B61. Given stable, predictable 
funding at levels consistent with the 6.2A study, I am confident that 
LANL will deliver on its responsibility for the B61.

                           LONG-TERM SCIENCE

    Science is the base that allows LANL to address challenging issues 
that face the stockpile. At LANL we have a scientific workforce that 
includes approximately 2,500 PhDs. They form the core of our scientific 
base. The weapons program directly benefits when these scientists work 
on challenging technical problems using tools such as DARHT, the Los 
Alamos Neutron Science Center (LANSCE), and the ASC Program. Our 
ability to do stockpile work today is the product of these investments. 
Our science and engineering campaigns produced mature technology that 
was ready when needed. Similar investments are needed today to ensure 
that the Laboratory has tools and technologies to be ready for 
tomorrow's challenges.
    In addition to benefiting the Lab's weapons program, we are able to 
leverage these capabilities for broader national interests. They, in 
turn, feed valuable technical insights directly back into the nuclear 
weapons program, including LEPs. Our work in nuclear forensics and 
medical isotope production illustrates these points.

         Nuclear forensics and attribution: Los Alamos 
        delivered a suite of models and databases for National 
        Technical Nuclear Forensics applications, such as modeling 
        debris signatures and other nuclear security applications. 
        LANL's capabilities in this area are a direct outgrowth of the 
        former nuclear weapons testing program where scientists had to 
        study the detailed chemistry of soil samples to determine 
        various characteristics of detonation. Our experts in this area 
        not only help with the current nuclear forensics, they also 
        support the weapons program by helping to reinterpret data from 
        previous underground tests. This information is then used to 
        validate our weapons codes.
         Thanks to the Isotope Production Facility at LANSCE, 
        LANL is a national leader in producing strontium-82 for cardiac 
        imaging and germanium-68 for calibrating proton emission 
        tomography (PET) scanners. Other isotopes, such as aluminum-26 
        and silicon-32, are unique to Los Alamos and are not produced 
        anywhere else in the world. With the demand for short-half-
        lived medical isotopes being one of the fastest-growing needs 
        of health care providers, the industry and medical researchers 
        are looking to Los Alamos to provide a stable supply of these 
        isotopes. Providing these isotopes as a service to the Nation 
        maintains the skills at Los Alamos for producing and handling 
        exotic isotopes.

    Despite difficult and uncertain budgetary scenarios, a careful 
balance between LEPs and science, technology, and engineering must be 
maintained.

                             LOOKING AHEAD

    Just as training and equipping prepare our Armed Forces to fight in 
battle, the science done at the national laboratories prepares our 
employees with the knowledge and tools needed to sustain the stockpile. 
While the balance must shift as we apply our knowledge and tools to 
LEPs, we cannot abandon preparation for the future any more than the 
military can abandon training and equipping, even in the midst of 
fighting a war.
    In general, the budget for Directed Stockpile Work Services has 
seen successive cuts that have hampered progress toward goals set in 
the NPR, especially in the Component Maturation Framework, more 
sustainable hydrotest capability, nuclear safety research and 
development, and Plutonium Sustainment.
    Over the last few months, I have been asked to estimate the budget 
impacts of pit reuse as a way to bridge our manufacturing gap. We are 
still in the early phases of work that would allow pits designed for 
conventional-high-explosive systems to be used in systems using 
insensitive explosives. Should the Nation choose to pursue this path, 
we believe that approximately $50 million per year will be needed for 
the next 5 to 10 years beyond already-planned investments before we 
could certify systems using these pits. Because this work must start 
now if this concept is to be viable for coming LEPs, we are planning 
experiments this summer to gain insight into system behavior. While we 
believe this a promising direction for innovation to meet a national 
challenge, we cannot confidently predict the outcome. There is risk.
    Whether the ultimate decision is to move forward with an 
alternative plutonium approach, or to continue with CMRR construction, 
every day that we do not address the issue is a day in which our risks 
increase. At a minimum, we need access to the $120 million appropriated 
in fiscal year 2012 that will remain after placing CMRR-NF in a stable 
state to make investments supporting a path forward. Furthermore, the 
$35 million already in the budget request for fiscal year 2013 will be 
needed to accelerate PF-4 vault clean-out. Access to these funds will 
allow us to continue making wise investments in our plutonium 
capability. This includes studying a transportation system between PF-4 
and RLUOB, expanded use of RLUOB, and a migration of processes from CMR 
to PF-4. If we are to support the LEPs necessary over the next decade, 
we cannot afford to postpone action to address the Nation's plutonium 
capability.

                             FUNDING ISSUES

    When looking at funding, we must address the issues we see today as 
well as the investments needed to meet challenges in an uncertain 
future. Today, the stockpile requires action--action to address changes 
that we see occurring in the stockpile on timescales that are dictated 
by nature. Chemistry and physics take an unrelenting toll on the aging 
stockpile. As we work to modernize the stockpile, the balance is 
shifting toward today's issues as it must. However, I am concerned that 
short term stockpile needs may be shifting the balance too far to the 
present--putting our ability to care for the stockpile in the future at 
risk.
    I must speak about the difficult budget issues facing LANL this 
fiscal year. While planning in fiscal year 2011 for the increases 
outlined in the 1251 report, LANL was prudent in hiring. Nevertheless, 
as fiscal year 2012 began it seemed unlikely that we would see the full 
planned increase. In November 2011, I established the Laboratory 
Integrated Stewardship Council to ensure that we manage our resources 
in a consistent, conservative manner across the Laboratory. This 
council is chartered with making financial decisions to keep Laboratory 
spending in line with a highly constrained budget.
    For fiscal year 2012, LANL funding across our national security 
accounts is some $300 million lower than it was in fiscal year 2011. In 
the fiscal year 2013 budget request, funding at LANL appears to be down 
another $100 million.
    These cuts made it necessary for me to make the difficult decision 
to move forward with a voluntary separation program to reduce our 
workforce. Just over a week ago more than 550 employees left the Lab. 
Many had decades of experience in the Weapons Program. Despite 
succession planning, we are losing valued employees sooner than 
expected.

                             PENSION RELIEF

    In 2006. Los Alamos made major changes in its pension system. New 
employees are no longer able to enroll in a defined benefits pension 
system. Rather, they are part of a defined contribution plan. While 
this system no longer provides the incentive to remain at the 
Laboratory until retirement, it also relieves LANL of the long-term 
liabilities associated with a defined benefits program.
    The Laboratory remains committed to the benefits promised to 
employees who have, for many years, been participants in the defined 
benefits program--a program that has been closed since 2006. However, 
historically low interest rates coupled with the actuarial rules of the 
Pension Protection Act (PPA) have caused estimates of future 
liabilities to balloon. As a result, the Laboratory has been making 
contributions to the pension plan out of program funds for the last few 
years at well above the $100 million level. While we have increased 
employee contributions, they are only a partial offset to the 
contributions required by the PPA. If interest rates return to levels 
that have been typical over the last 25 years, it will not be long 
before our plan appears to be over-funded.
    Mr. Chairman, I urge Congress to pass the proposed changes to the 
Pension Protection Act (PPA) that include a permanent ``funding 
stabilization'' provision. Today's unusually low interest rates, 
combined with existing pension funding legislation, have artificially 
increased our pension liabilities in the short term. This has reduced 
and will continue to reduce the funding available for the mission by 
tens of millions of dollars per year at a time when mission needs are 
growing and budgets are severely constrained.
    In summary, I believe the proposed ``funding stabilization'' relief 
would provide a substantial amount of funding back to weapons program 
activities without incurring undue risk in pension funding over the 
long term.

                                CLOSING

    The fundamental premise of Stockpile Stewardship is that a healthy 
program can sustain a workforce able to make technically sound 
decisions supporting the stockpile, using the scientific tools they 
have developed. Today we are well-positioned to make these decisions 
because of the investments the country has made over the last two 
decades. However, I'm increasingly concerned that we may no longer be 
on a healthy path. As our budgets at LANL are reduced, our risks 
increase. Some risks may be acceptable, but I am sure that there will 
be a point at which those risks become unacceptable.
    Thank you, Mr. Chairman, for the opportunity to testify today.

    Senator Nelson. Thank you.
    Dr. Albright?

   STATEMENT OF DR. PENROSE C. ALBRIGHT, DIRECTOR, LAWRENCE 
                 LIVERMORE NATIONAL LABORATORY

    Dr. Albright. Mr. Chairman and Senator Inhofe, thank you 
for the opportunity to testify before the subcommittee.
    I have submitted my full statement to the subcommittee, 
which I ask be made part of the hearing record.
    Senator Nelson. Without objection.
    Dr. Albright. If I may, I will now make a brief opening 
statement.
    This is a challenging period for the Federal Government 
with many priorities that require attention at a time of budget 
austerity. This is also the case for the Nation's SSP, 
including those activities at Lawrence Livermore National 
Laboratory.
    I think it is worth reminding ourselves why we have a SSP. 
It was formally begun in the 1990s and it is really an 
ambitious experiment. It is founded on the premise that the 
expertise of a workforce and the judgments that they make that 
results from a detailed understanding of the fundamental 
science of how nuclear weapons work can serve as a substitute 
for the expertise and judgment that we historically developed 
back in the days when we had multiple and frequent design 
efforts and we did testing in the desert.
    It is important to note that at the time we stopped nuclear 
testing, we really did not think we understood well enough how 
weapons work. It is why we had the tests. There were a great 
number of empirical factors and approximations that were built 
into the weapons design process that allowed efforts to 
proceed, but there was also a landscape of test failures that 
had, over time, indicated our lack of understanding of the 
basic underlying science. Hence, for stockpile stewardship to 
work, we needed to learn far more about the physical processes 
that transpire in the functioning of a weapon.
    We have actually been quite successful in developing many 
of those science tools, in fact, probably more successful than 
many of the proponents, when the program started, would have 
imagined. But developing those tools remains extremely 
challenging. Our knowledge of the basic underlying physics is 
embodied ultimately in computer models. These models utilize 
scientifically justified approximations, and they are rendered 
more and more accurate by improvements in computing power and 
by controlled experiments that we do at Livermore and other 
laboratories at Los Alamos to determine some of the important 
needed parameters. The idea here is to represent what we 
believe to be reality.
    However, the thing you have to always worry about with 
these models is that they cannot become holy writ. It is 
absolutely crucial that they be tested repeatedly against 
experiments conducted at relevant physical conditions so that 
the assumptions and approximations embedded in the models can 
be verified and corrected as needed. To do otherwise is to 
invite disaster.
    Hence, the pillars of the SSP have included both the 
development of independent analytical capabilities utilizing 
the world's most capable computing platforms at Lawrence 
Livermore, at Los Alamos, at Sandia, but also the development 
of experimental facilities to collect data on the conditions 
that are relevant to the operation of a nuclear weapon. It is 
worth noting that every nuclear state that has abjured testing 
is following the same approach to maintaining their stockpile.
    Of course, the scientific understanding of nuclear weapons 
is not an end all by itself. It is rather a process that 
underlies our capability to maintain the stockpile. It informs 
our annual assessments. It informs how we react to issues that 
are raised during the surveillance program, and it informs how 
we conduct our life extension programs (LEP).
    We are very excited about the recent accomplishments that 
we have made in this program, and I highlight many of these in 
my written testimony. But we are also very concerned about 
impediments to current programs and the long-term success of 
stockpile stewardship. So let me stress four points.
    First, without sustained support for nuclear weapons 
science, stockpile stewardship will eventually fail.
    Second, provided that support is sustained, we do remain 
optimistic about the prospects for long-term success of this 
science-based stockpile stewardship. The skills that we derive 
from the science base, as I said earlier, enable the Nation to 
maintain a safe, secure, and effective deterrent and deliver on 
very challenging LEPs.
    Third, recognition and support of the NNSA laboratories 
serving as national security laboratories is actually very, 
very important to that nuclear stockpile mission. It 
complements and enhances the workforce. It adds depth and 
breadth and strength to the laboratories' capabilities.
    Then finally, the NNSA laboratories would perform their 
vital national security mission far more effectively if they 
were managed as trusted partners of the Federal Government and 
governed in a more streamlined and cost-effective way 
consistent with the original intent of the FFRDC construct.
    Thank you for your attention, and I will be pleased to 
answer your questions during the hearing.
    [The prepared statement of Dr. Albright follows:]

             Prepared Statement by Dr. Penrose C. Albright

                      OPENING REMARKS AND SUMMARY

    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to testify today on the National Nuclear Security 
Administration Management of its National Security Laboratories. I am 
Parney Albright, Director of the Lawrence Livermore National Laboratory 
(LLNL).
    LLNL is one of the Department of Energy's (DOE) National Nuclear 
Security Administration (NNSA) nuclear design laboratories responsible 
for helping sustain the safety, security, and effectiveness of our 
Nation's strategic deterrent. In addition to our stockpile stewardship 
efforts, we also leverage our capabilities to develop innovative 
solutions to major 21st century challenges in nuclear security, defense 
and international security, and energy and environmental security. I 
thank the committee for your continuing support for the important work 
we do.
    This is a challenging period for the Federal Government, with many 
priorities that require attention at a time of budget austerity. This 
is also the case for the Nation's Stockpile Stewardship Program (SSP), 
including the activities at Livermore. We are very excited about recent 
and prospective major accomplishments, which I will highlight, but we 
are also very concerned about impediments to current programs and long-
term success in stockpile stewardship. In particular, I stress four 
points:

         Without sustained support for nuclear weapons science, 
        stockpile stewardship will eventually fail.
         We remain optimistic about the prospect of long-term 
        success of ``science-based'' stockpile stewardship provided 
        that support is sustained. The skills deriving from a solid 
        science base will enable stockpile stewards to maintain a safe, 
        secure, and effective deterrent and deliver on challenging 
        life-extension programs.
         Recognition of and support for the NNSA laboratories 
        serving as ``national security laboratories'' will better help 
        the United States meet a broad set of 21st century security 
        challenges. These broader activities complement our nuclear 
        weapons responsibilities, adding depth, breadth, and strength 
        to the laboratories' capabilities.
         The NNSA laboratories would perform their vital 
        national security mission much more effectively if they were 
        managed as trusted partners of the Federal Government and 
        governed in a more streamlined/cost-effective way, consistent 
        with the original intent of the Federally-Funded Research and 
        Development Center (FFRDC) construct.

                        NUCLEAR WEAPONS SCIENCE

    The SSP, which formally began in the 1990s with the decision to 
enter into a moratorium on nuclear testing, is an ambitious experiment. 
It is founded on the premise that the expertise of a workforce (and the 
judgments they make) that results from a detailed understanding of the 
fundamental science of how nuclear weapons work can serve as a 
substitute for the expertise (and judgment) developed historically 
through multiple and frequent design efforts--efforts that ultimately 
had to be proven in nuclear tests. To add to the complexity of this 
enterprise, this new workforce must deal with weapons that will be 
deployed well beyond their initially intended service lifetimes, and 
over time upgraded with the (highly desirable) safety and security 
features called for by the recent Nuclear Posture Review--features that 
represent changes to previously tested configurations of those weapons.
    It is important to note that at the time we stopped nuclear 
testing, we did not understand well enough how weapons worked (which is 
why we had to test); there were a great number of empirical factors and 
approximations built in to the weapons design process that allowed 
efforts to proceed, but with that there was a landscape of test 
failures that indicated our lack of understanding of the basic 
underlying science. Hence, for stockpile stewardship to work, we needed 
to learn far more about the physical processes that transpire in the 
functioning of a weapon. When the SSP was initiated, the nuclear 
stockpile was in good shape, which meant that we had a window of time 
to develop necessary nuclear weapons science tools and knowledge before 
more difficult-to-deal-with problems would likely arise.
    Developing these science tools has been--and remains--extremely 
challenging. Our knowledge of the underlying basic physics is 
ultimately embodied in computer models. These models utilize 
scientifically justified approximations--rendered more and more 
accurate by improvements in computing power, and by controlled 
experiments that determine needed parameters--to represent what we 
believe to be reality. However, these models cannot become ``holy 
writ;'' it is crucial that they be tested repeatedly against 
experiments conducted at relevant physical conditions, so that the 
assumptions and approximations embedded in the models can be verified 
and corrected as needed. To do otherwise is to invite disaster. Hence, 
the pillars of the SSP have included both the development of 
independent analytic capabilities--utilizing the world's most capable 
computing platforms--at Lawrence Livermore and Los Alamos national 
laboratories (each laboratory with differing approaches to modeling the 
underlying physics); but also the development of experimental 
facilities to collect data at the conditions relevant to the operation 
of a nuclear weapon. It is worth noting that every acknowledged nuclear 
state that has abjured testing is following the same approach to 
maintaining their stockpile.
    Of course, the scientific understanding of nuclear weapons is not 
an end, but rather, as noted above, a process that underlies our 
capability to maintain the stockpile. First, each laboratory director 
provides an annual assessment of the stockpile. Hence, a crucial 
component to the SSP is the ongoing surveillance of the stockpile and 
the development of better surveillance methods. Again, here, the 
underlying premise of the SSP--that developing a detailed understanding 
of fundamental weapons science will lead to a workforce with the 
judgment and intuition heretofore developed through new weapons design 
and testing--is critical. If an issue is identified in a stockpile 
weapon, we as a nation need to know whether it can be ignored, fixed in 
the field, or is critical enough to call into question the reliability 
of a portion of the deterrent.
    Finally, that judgment and experience must be turned toward Life 
Extension Programs (LEPs) that both sustain the extant stockpile and 
also allow for critical improvements in its safety and security. These 
advancements will in some cases result in deviations from fully tested 
configurations, and hence rely heavily on improvements in our 
understanding of fundamental weapons science. Furthermore, even if a 
weapon system were to have its lifetime extended without any deviations 
from the prior design, the reality is that component manufacturing 
processes change with time, some materials are no longer available, and 
no ``blueprint'' is sufficiently detailed to fill in all the decisions 
made historically on the production line. Certifying any weapon 
requires a workforce that understands the fundamental scientific 
aspects of nuclear weapons.
    The full spectrum of SSP activities--a fundamental understanding of 
weapons science (based on theory and, crucially, experiments); its 
application to assessments; stockpile surveillance and development of 
better surveillance methods; dealing with significant findings and 
fixes; and LEPs--all serve to sustain the stockpile, exercise the 
skills and judgments of stockpile stewards, and, importantly, train the 
next generation of stewards. When the next round of LEPs for the extant 
stockpile is expected to begin in the 2030s, the people executing those 
LEPs will have been trained by people who themselves have never engaged 
in the development of a new design, nor executed a full nuclear test.
    SSP depends on stockpile stewards being fully capable of 
identifying issues that arise in stockpiled weapons; resolving those 
issues through minor fixes or LEPs; and certifying the safety, 
security, and performance of the modified weapon without conducting a 
nuclear test. Strong support of all aspects of the SSP is required, 
because questions about safety, security, and performance will arise as 
long as the United States has nuclear weapons. Laboratory scientists 
and engineers must have the wherewithal to find and address problems, 
and the Nation must have confidence in their ability to do so.
    We have made remarkable progress in developing the necessary 
computational and experimental tools and in using them to gain 
knowledge about key issues. We are attending to the immediate needs of 
the stockpile. Today, however, the hard challenges are now much closer 
as weapons age beyond their intended service life and important work to 
resolve key issues in nuclear weapons science remains to be done.
    As noted briefly above, the simulation codes must have much higher 
fidelity than those originally used in the design of the weapon. 
Evaluating the performance of a weapon ``as designed'' is one issue; 
evaluating it when materials have aged and anomalies are present is 
much harder. Materials age at an accelerated rate when confined for 
years in the radioactive environment inside a nuclear weapon. The 
improved physics models required for science-based SSP are very complex 
(e.g., turbulence and the interaction of intense radiation with matter) 
and necessitate powerful computers. However, these codes--which embody 
our state of knowledge--must be tested against data.
    Data collection about nuclear weapons performance falls into two 
broad categories: information pertaining to dynamics of the primary 
implosion and information pertaining to the nuclear explosion itself.
    We collect data about the hydrodynamics of a weapon primary 
implosion at LLNL's Contained Firing Facility (CFF) and at the Dual 
Axis Radiographic Hydrodynamics Test (DARHT) Facility at Los Alamos 
National Laboratory (LANL). For example, in fiscal year 2010, one of 
our large-scale tests explored advance safety and security concepts 
that could be used in future LEPs; another demonstrated advanced 
capabilities for assuring weapon performance. Through marked 
improvements in diagnostics, we are obtaining greater amounts of higher 
fidelity data about implosion dynamics. These data are compared to pre-
shot predictions of results--performed with our most advanced 
computers--and gauge how well our physics models work.
    Other key experimental facilities managed by Livermore that provide 
information about non-nuclear performance include the High Explosives 
Applications Facility (HEAF), where state-of-the-art diagnostics are 
used to study the performance of aging high explosives in nuclear 
weapons, and the Joint Actinide Shock Physics Experimental Research 
(JASPER) Facility at the Nevada National Security Site. A two-stage gas 
gun, JASPER is used to produce an extremely high-pressure shock wave in 
plutonium and collect material properties data critical to the 
simulation codes. JASPER completed mandated upgrades in fiscal year 
2011 and now operates as a Hazard Category 3 nuclear facility. Since 
JASPER returned to operation, five plutonium shots so far have 
collected vital data for LLNL and LANL.
    A critical gap in our understanding of nuclear weapons science is 
the need for experimental data pertaining to the behavior of materials 
at the extreme conditions of a functioning nuclear weapon (100 million 
degrees temperature and 10 billion atmospheres pressure). With the 
National Ignition Facility (NIF) (and lesser but complementary 
capabilities in the Omega laser at University of Rochester's Laboratory 
for Laser Energetics and the Z-machine at Sandia National Laboratories 
(SNL)), it is now possible to gather high-energy-density (HED) science 
data at a precision and experimental rate that simply would not be 
possible by other means. Crucially, the NIF holds the promise of 
probing experimentally the conditions in a nuclear weapon that occur 
during the initial detonation--in particular, the boost process that 
determines the performance of the primary, which, in turn, drives the 
overall performance of the weapon. The ability to anchor the simulation 
codes with ignition data is pivotal to any discussion of design margins 
and performance.

         STOCKPILE STEWARDSHIP PROGRAM SUCCESSES AND CHALLENGES

    My discussion of recent successes and challenges in the SSP will 
largely focus on NIF, high-performance computing, and the W78 LEP, 
which are crucial to long-term success.
The National Ignition Facility (NIF)
    NIF was commissioned at LLNL in 2009, and since then, the 192-beam 
laser has been performing very reliably as a high-precision 
experimental tool. During fiscal year 2011, a total of 286 shots were 
fired on NIF, with 62 shots for the National Ignition Campaign (NIC) 
and 50 shots for stockpile stewardship and HED science applications. 
Over 100 shots were fired in January and February of 2012--a record 
performance for complex shots. The demands for experimental time are 
high. Even with NIF operating 24 hours a day, 7 days a week, the 
requests for shots in fiscal year 2012 total more than 500 days.
    Researchers are executing the program to achieve fusion ignition 
and energy gain, and the wide range of record breaking experiments 
results to date demonstrate the enormous utility of NIF as a users' 
facility for nuclear weapon science, broader national security 
applications, frontier science, and pursuit of fusion power for energy 
security. We are making excellent progress toward transforming NIF into 
a users' facility in fiscal year 2013.
    NIF Laser Performance
    In March 2012, NIF delivered a record-setting 1.875 million joules 
(MJ) of ultraviolet laser light to the center of the facility's target 
chamber. NIF generates nearly 100 times more energy than any other 
laser. This shot met a major milestone and exceeded NIF's design 
specification of 1.8 MJ. NIF is now able to conduct routine operations 
at full power. Very importantly, the recordsetting event was also one 
of the most precise shots ever fired at NIF. The laser's precision and 
enormous flexibility in how to use the beams make possible the fielding 
of many different types of ignition and HED science experiments for 
which more than 50 different types of diagnostic instruments, many 
developed specifically for NIF, are providing exceptional data for a 
wide range of types of experiments.
    Support of Stockpile Stewardship
    NIF has already made a pivotal contribution to stockpile 
stewardship with resolution of the ``energy balance'' issue after a 
series of experiments performed last year. The issue was originally 
identified during the era of nuclear testing and it has remained a 
significant anomaly for 40 years--an anomaly that in the past was an 
important reason for full nuclear testing. Over the last decade, 
experiments on a variety of experimental facilities contributed to 
improving the understanding of this anomaly and pointed to its likely 
source. LLNL researchers developed a sophisticated computational model 
that better simulated nuclear weapons performance and, in particular 
the specific aspects of performance that could possibly explain the 
anomaly. The unique capabilities of NIF were required to validate 
simulation results. With resolution of the energy balance anomaly, LLNL 
and LANL will have more confidence in assessments of the current 
weapons, which continue to change with age, and will be able to make 
better-informed choices in upcoming LEPs.
    Additional SSP-supportive experiments were conducted in fiscal year 
2011-2012 to study how materials that are normally solids behave when 
subjected to unprecedented pressures--in this case tantalum and carbon. 
These experiments are important stepping stones toward understanding 
the more complex material behavior of substances like plutonium. fiscal 
year 2013 is projected to be a very busy year for SSP experiments at 
NIF. Future plans call for a wide range of types of experiments to be 
performed by LLNL and LANL to better understand the physics of boost 
(thermonuclear burn in the primary explosion) and answer questions 
crucial to stockpile assessments, investigation of significant 
findings, and certification of LEPs.
    The National Ignition Campaign
    The goal of the National Ignition Campaign (NIC) is to compress and 
heat a millimeter-size target filled with deuterium and tritium to 
achieve fusion ignition and energy gain (at least as much energy output 
as input). The NIC team is also transitioning NIF to routine operations 
as a highly flexible HED science experimental facility. NIC, which 
concludes at the end of fiscal year 2012, is managed for NNSA by the 
Laboratory and includes many national and international partners, 
representing national laboratories, academia, and industry.
    NIC is making substantial progress in the quest to achieve fusion 
ignition and burn. Activities are progressing through a series of 
milestones with ignition and burn as a major milestone scheduled for 
the fourth quarter of fiscal year 2012. The goal is to compress the 
cryogenically-cooled fusion fuel to a very small volume (compressed by 
more than a factor of 10,000 in density) and create a central ``hot 
spot'' that ignites and consumes a larger amount of surrounding 
hydrogen fuel. The goal is to turn mass into energy. A series of four 
shocks that must be precisely shaped and timed are used to implode the 
capsule and ignite the fuel.
    NIC researchers are conducting a series of experiments to optimize 
the target implosion following the standard scientific approach of 
interweaving experiments and theory. These experiments occur at 
energies, temperatures, and pressures that have never before been 
probed, and hence that are well outside of the domain where our 
simulation models have been anchored--a domain that approaches the 
conditions inside a nuclear weapon. Through the iterative process of 
pre-shot prediction, experiment, and post-shot data analysis, new 
ground is being broken on the path to ignition. We are learning new 
physics and gaining a more fundamental understanding of thermonuclear 
reactions. This information is being used to continue improving our 
models as we move through the program, which in itself is testimony to 
the need for anchoring data and skepticism of models that are based 
solely on theory or are validated outside the domain of interest.
    NIC (and more generally, the SSP) is a grand challenge with many 
scientific and engineering obstacles that test the skills and ingenuity 
of NNSA laboratory researchers. So far, we have overcome many obstacles 
and I have confidence that the NIC team will reach its objective of 
fusion ignition and burn. Others around the world see great value in 
having NIF-like capabilities and share confidence that the goal is 
within reach. China, Russia, and France are all committing to build (or 
have started to build) large laser systems for inertial confinement 
fusion (ICF); the United Kingdom works closely with NIF; and Japan and 
Korea are making substantial investments in ICF.
High-Performance Computing (HPC)
    HPC is and always has been a defining strength of our Laboratory. 
SSP advances have required continuously pushing the envelope in HPC. As 
part of NNSA's Advanced Strategic Computing (ASC) program, we work 
closely with U.S. computer manufacturers to improve capabilities, and 
every generation of state-of-the-art computers pioneered at LLNL or 
LANL has later found broad application in making U.S. industry able to 
develop better products more quickly. Livermore is currently bringing 
into operation two highly capable machines: ``Sequoia'' and ``Zin''.
    Sequoia
    In January 2012, the IBM technical team began installation of the 
first four racks of Sequoia, the next leap forward in computing 
capability; the last of the 96 racks arrive this month. This next 
generation ``BlueGene/Q'' technology operates at an order of magnitude 
faster than previously deployed systems. Sequoia, which includes 1.5 
million processors and 6 million threads, is capable of record-setting 
20 petaflops (20 quadrillion, or a million billion, floating point 
operations per second). Sequoia is also record-breaking in power 
efficiency--at over 2 billion calculations per watt, it is nearly 50 
percent more power efficient than any competing technology. Our goal is 
to have the machine fully performing science simulations before the end 
of 2012 and dedicated to classified computing in mid-2013.
    Sequoia is an important step toward even larger computers that are 
needed to run predictive models of boost physics and thermonuclear burn 
processes in nuclear weapons. Equally importantly, considerable effort 
has gone into development of improved methods to efficiently 
characterize and bound margin to failure and its uncertainties. 
Quantification of Margin and Uncertainty (QMU) provides the 
underpinning of our assessment and certification processes. Rigorous 
implementation of QMU requires running many thousands of high fidelity 
simulations to map out the impact of uncertainties on weapon 
performance, which, in turn, requires more powerful computers.
    Zin
    In March 2012, LLNL completed installation and began classified 
computing on Zin, a machine with 1 petaflop performance. As part of the 
ASC Tri-Lab Capacity Cluster 2 (TLCC2) program, similar computers are 
being installed at LANL and SNL to increase computing capacity. LLNL 
led the vendor selection to procure standardized hardware and software 
environment through TLCC2 so that the laboratories would realize 
significantly reduced costs, increased efficiencies, and enhanced 
collaboration. Zin provides a substantial boost to classified computing 
at LLNL, and full deployment of TLCC2 will allow users from all three 
laboratories to begin preparing their codes on the actual architecture 
that they will experience when Sequoia goes into service.
    High-Performance Computing as a National Security Imperative. To 
meet the demanding needs of SSP, we urge support for an initiative to 
reach the challenging milestone of exascale computing (a billion 
billion calculations per second) by 2020. LLNL is working with other 
NNSA and DOE laboratories to formulate a strategy for how to achieve 
this ambitious goal. Exascale computing is also critical to our role as 
a broad national security laboratory, with Livermore bringing to bear 
on critical problems HPC as one of our principal strengths. Modeling 
and simulation of complex systems to understand and predict their 
behavior is key to solving challenging problems in national security, 
energy security, and economic competitiveness. Other nations equally 
recognize the value of leadership in HPC to their futures. Sequoia puts 
the United States back in the lead (surpassing Japan and China) and it 
is critical that we sustain leadership by reaching exascale performance 
level before competitor nations.
The W78 Life-Extension Program (LEP)
    In June 2011, LLNL and the U.S. Air Force launched a concept 
development study to extend the life of the W78 Minuteman III warhead. 
The W78, which is the dominant system for the ICBM leg of the Nation's 
nuclear deterrent, is well beyond its planned service life and will 
reach 40 years before the LEP production begins. We need to address 
concerns identified in the surveillance of W78 that do not now affect 
performance. The LEP process, which begins with concept development 
(Phase 6.1), will take at least a decade to complete. As the program is 
conceived, production would start in fiscal year 2023.
    The concept development study is evaluating different LEP 
approaches including refurbishment, reuse, or replacement of weapon 
components. As required by the Department of Defense (DOD), the study 
encompasses options that improve safety and security features and that 
make the warhead adaptable for deployment on SLBMs as well as ICBMs. At 
the end of the study, which should conclude this year, the California 
team (LLNL and SNL-California) will report findings and recommendations 
to the DOD/NNSA Project Officers Group. A key issue is the 
manufacturability of LEP components and systems--cost-efficiency, waste 
reduction, and avoidance of use of hazardous materials are important 
factors.
    In addition to meeting the critical need to extend the service life 
of the W78, the LEP serves the long-term need to work on the full 
spectrum of stockpile stewardship activities--including warhead 
development from physics and engineering design through production 
engineering. This is an essential part of hands-on training to increase 
skills and expert judgment. The young scientists and engineers who 
worked on the W87 LEP in the 1990s are now the technical leaders for 
the W78 LEP, and they are training the next generation of leaders.
Other Stockpile Stewardship Program Successes and Challenges.
    Assessments and Directed Stockpile Work (DSW)
    LLNL completed Cycle 16 of the Annual Stockpile Assessment with 
support from the newly implemented Independent Nuclear Weapon 
Assessment Process to strengthen peer review. Cycle 16 benefited from 
reduced uncertainties and increased scientific rigor due to improved 
simulation models, results of recent plutonium aging experiments, and 
better fundamental nuclear data deriving from joint work with LANL. 
Livermore also effectively managed its Significant Finding 
Investigation workload and its stockpile surveillance activities. 
However, our weapon assessments and DSW support activities are funding 
constrained, and of the systems in the stockpile, the B83 bomb and W80 
cruise missile warhead are the least supported. With the fiscal year 
2013 proposed budget, we will likely have to curtail activities that 
impact our ability to assess the performance of these systems. Funding 
for technology development to improve certification and safety is also 
very constrained.
    Facilities
    LLNL sustained very nearly 100 percent availability of its mission-
critical and mission-dependent facilities throughout fiscal year 2011 
as part of its Readiness in Technical Base and Facilities (RTBF) 
effort. However, we have not been able to keep pace with the needs for 
reinvestment in the Laboratory's aging overall infrastructure. LLNL 
receives less RTBF funds (by a factor of greater than two) than any 
other site in the complex. RTBF activities include our ongoing effort 
to prepare for shipping from the site special nuclear material 
requiring the highest level of security protection. More than 93 
percent of the material has been removed and the work is on schedule to 
be completed in 2012. Important programmatic activities continue at the 
Laboratory's Superblock Facility and this well-maintained facility 
stands ready to support NNSA's new plutonium strategy with the planned 
delay in construction of the Chemistry and Metallurgy Research 
Replacement-Nuclear Facility (CMRR-NF) at LANL.
    Additional Budget Burdens
    The Lawrence Livermore National Security (LLNS), LLC, Defined 
Benefit Pension Plan up to now has been sufficiently funded that 
contributions have not been legally required. However, with interest 
rates at an historic low, liabilities have grown dramatically since 
mid-2009. As a consequence, statutory requirements of the Pension 
Protection Act of 2006 are forcing LLNS to act, and NNSA has granted 
LLNS approval to begin employee and employer contributions in fiscal 
year 2012. By starting now, we save NNSA almost $200 million through 
fiscal year 2022. I urge Congress to examine whether the provisions of 
the Pension Protection Act, designed to protect private sector pension 
plans, are appropriate for the NNSA complex of laboratories and plants. 
If a Pension Protection Act waiver/exception/modification is not 
enacted, $88 million will have to be diverted from programmatic work in 
fiscal year 2013.
                 llnl as a national security laboratory
    For many years, LLNL employees have applied their very special 
capabilities to develop innovative technical solutions to help meet a 
broader set of national needs. Work for NNSA on nuclear 
nonproliferation and counterterrorism, the Office of Science and others 
in DOE, other Federal agencies, and additional sponsors (e.g., in U.S. 
industry), is very important and has long been integrated into our 
mission and contribution to national security in the broadest sense. 
Our notable accomplishments in fiscal year 2011-2012 include:

         Radiation Detection. LLNL researchers developed the 
        first plastic material capable of identifying nuclear 
        substances such as uranium and plutonium from benign 
        radioactive sources. The new technology could be used in large, 
        low-cost detectors for portals to reliably detect nuclear 
        substances that might be used by terrorists.
         Emergency response. Operating around the clock for 22 
        days, LLNL's National Atmospheric Release Advisory Center 
        provided up-to-date atmospheric dispersion predictions, plume 
        projections, and radiation dose estimates to agencies in the 
        United States and Japan responding to the Fukushima nuclear 
        reactor disaster.
         Low-collateral-damage munition. The U.S. Air Force 
        funded LLNL in May 2010 to rapidly develop the design for a new 
        low-collateral damage munition (BLU-129/B). Fielding of the 
        munition was approved in September 2011. The effective 
        integration of experiments with HPC simulations enabled quick 
        and effective optimization of munition performance while 
        meeting demanding engineering requirements.
         Cyber security. LLNL has created new capabilities for 
        cyber-security work sponsors to provide real-time situational 
        awareness inside a large computer network using a distributed 
        approach to monitoring for anomalous behavior.
         Space situational awareness. LLNL has developed 
        detailed physics-based simulations to provide real-time 
        analysis of space flight safety risks, and we are designing new 
        prototype collision-warning mini-sensors for deployment in 
        orbit.
         Rapid development of new pharmaceuticals. Working with 
        an industrial partner, LLNL researchers applied sophisticated 
        computer models to sift through a large range of possibilities 
        and identify three efficacious drug candidates in 3 months 
        (normally a 2- to 5-year process).
         Industrial partnering in HPC. In March 2012, LLNL 
        selected six pilot projects to partner with industry to 
        accelerate the development of energy technology using LLNL's 
        (unclassified) HPC resources through the Livermore Valley Open 
        Campus (adjoining LLNL and SNL-California).

    It is widely appreciated that the NNSA laboratories are unique (in 
terms of capability, talent, scale, and dedication to mission) national 
resources that should be more broadly applied to address pressing 21st 
century needs in defense and international security, energy security, 
and innovations to enhance economic competitiveness. As a dual benefit, 
the activities crucially add depth, breadth, and strength to the 
laboratories' technical base, which is important to long-term success 
in stockpile stewardship. Managing for High-Quality Science and 
Engineering at the NNSA National Security Laboratories, recently 
prepared by a National Academy of Sciences (NAS) committee at the 
behest of Congress, recommended ``that Congress recognize that 
maintenance of the stockpile remains the core mission of the Labs, and 
in that context consider endorsing and supporting in some way the 
evolution of the NNSA Laboratories to National Security Laboratories . 
. . '' Formal recognition of our national security mission 
responsibility would be very beneficial--as would steps to help lower 
operating costs at the laboratories and simplify the processes for 
arranging interagency work.
       the laboratories as trusted partners in national security
    Employees at the NNSA laboratories and plants are dedicated to 
national service. At the laboratories, we take on careers because we 
believe we can ``make a difference'' working with outstanding 
colleagues at state-of-the-art facilities on nationally important 
problems. As Federally-Funded Research and Development Centers 
(FFRDCs), our management contracts in principle place the day-to-day 
responsibility for national security research in the hands of non-
Federal employees in order to ensure that staff and infrastructure of 
the highest quality are available and dedicated to the missions of our 
government sponsors. In this model, the government decides ``what'' 
needs to be done and provides the funding, and the laboratories decide 
``how'' to assure the needed capabilities are available, and then how 
best to accomplish those tasks within the federally defined 
constraints. This partnership with the government should indeed be a 
partnership
    The national laboratories, along with the plants, are the sinew and 
muscle of the nuclear weapons enterprise; they are the corporate 
memory, the execution arm, and the infrastructure. In many ways, they 
fulfill the same role within NNSA as does the uniformed military within 
DOD. Such a relationship works well when there is mutual trust between 
the partners, a clear understanding of roles and responsibilities, and 
a shared vision and clear focus on mission.
    The Managing for High-Quality Science and Engineering at the NNSA 
National Security Laboratories report by the NAS committee speaks of 
the broken relationship between NNSA and the laboratories, stemming 
from a fundamental lack of trust. We need to return to a strong 
partnership between the government and the laboratories with active 
engagement of the laboratory directors in collaborative strategic 
discussions with NNSA management about program direction, health of the 
laboratories, and mission priorities.
    The NAS committee's findings are not new. America's Strategic 
Posture, issued in 2009 as the final report of the Congressional 
Commission on the Strategic Posture of the United States, is highly 
critical of the governance structure and ``micromanagement and 
unnecessary and obtrusive oversight.'' An investigation of other FFRDC 
governance models should be able to provide alternatives and help 
affect a cultural change in the way the laboratories are managed. We 
need to move from a duplicative, multi-layered, and poorly aligned 
governance system to a more streamlined, cost-effective approach that 
would restore a focus on mission and a trusted partnership. An 
operational way to do this is to provide a level of funding for 
oversight that is consistent with best practices for other FFRDCs. The 
savings, which could be substantial--within the government and at the 
laboratories, which have to absorb the costs of transactional 
oversight--could be reinvested to make for stronger programs and 
healthier laboratories.
    As an example of how other agencies approach FFRDC governance, the 
Jet Propulsion Laboratory (JPL) is an instructive (but by no means 
unique) example. There are significant differences between JPL and 
LLNL; even so, the contrast in the FFRDC relationship is striking. JPL 
is a $1.5 billion center with more than 5,000 employees, managed by the 
California Institute of Technology as an FFRDC for the National 
Aeronautics and Space Administration (NASA). NASA governs the agency 
with three-agency level councils and the center directors are members. 
The Site Office at JPL performs no assessments and Headquarters 
performs Mission and Environment, Health, and Safety reviews three 
times per year. In contrast, over 1,300 external audits were performed 
at LLNL in fiscal year 2011 as part of NNSA's transactional oversight.
    NNSA monitors performance at LLNL using an annual Performance 
Evaluation Plan (PEP). In fiscal year 2011, the PEP had 11 Objectives, 
42 Measures, 79 Targets, 5 Award Term Incentives, 12 Multi-site Targets 
(all but 2 applicable to LLNL), and a large number of supporting 
metrics to gauge performance. The DOE/NNSA Site Office at Livermore 
defines 324 elements in their management assessment plans. JPL and NASA 
dispensed with the PEP approach, deciding that it interfered with a 
focus on mission.
    There is one area where we have seen improvement toward an 
effective partnership with NNSA: reform of security policy and 
procedures. The effort, which began about 2 years ago, is led by NNSA's 
Defense Nuclear Service (DNS) and is collaborative with NNSA sites and 
contractors. DNS formed combined teams (Federal and contractor) of 
subject matter experts (e.g., in Information Security and in Physical 
Protection). The goal was to review and replace DOE Office of Health, 
Safety and Security orders with a more streamlined set of NNSA policies 
(NAPs) that provide the security directors at NNSA sites greater 
flexibility to meet their particular needs. So far, two NAPs have been 
created, which is saving an estimated $37 million per year in operating 
costs at LLNL alone. Seven more NAPs are in the pipeline and expected 
to be released soon.

                            CLOSING REMARKS

    My overall message is a ``good news'' story with a note of caution. 
With continuing investments in HPC and with NIF coming on-line as a 
unique experimental facility to gather necessary input and validation 
data for nuclear weapons science simulation codes, science-based 
stockpile stewardship is on the path to success. However, vigilance and 
strong partnerships are required to sustain program support so that 
there will be skilled and motivated stockpile stewards as long as the 
Nation relies on nuclear deterrence.
    All of us at LLNL look forward to serving as a trusted partner in 
the Nation's national security enterprise and are proud to provide 
innovative science and technology to meet a broad set of national 
security needs. We thank you for your continuing support.

    Senator Nelson. Thank you.
    Dr. Hommert?

  STATEMENT OF DR. PAUL J. HOMMERT, DIRECTOR, SANDIA NATIONAL 
                          LABORATORIES

    Dr. Hommert. Chairman Nelson, Ranking Member Inhofe, thank 
you for the opportunity to testify.
    I would like to request that my full testimony be made part 
of the record.
    Senator Nelson. Without objection.
    Dr. Hommert. I am Paul Hommert, Director of Sandia National 
Laboratories, a multi-program national security laboratory.
    I would like to begin by putting my testimony in an overall 
context. It is my view that we have entered a new era for the 
U.S. nuclear deterrent, a period when the nuclear weapons 
enterprise must address for the first time modernization of the 
stockpile, which depends critically on the use and continued 
advancement of the tools of stewardship; targeted upgrades to 
the production infrastructure; and maintenance of the current 
stockpile through a modernization transition period. Such 
imperatives create funding demands not seen in recent decades 
and will require risk-based prioritization of the program, 
along with continued emphasis on strong program management and 
cost-effectiveness.
    With this background, now let me discuss the four major 
points of my testimony.
    I am pleased to report that the appropriated fiscal year 
2012 budget will allow Sandia to complete the 6.2A cost study 
for the B61 LEP and initiate full-scale engineering development 
at a pace consistent with fiscal year 2019 first production 
unit (FPU) with the scope agreed by the Nuclear Weapons 
Council.
    Furthermore, the President's fiscal year 2013 budget 
request to Congress, if authorized and appropriated, does 
provide sufficient funds for Sandia to support the fiscal year 
2019 FPU schedule for the B61-12.
    However, I must emphasize that beginning now consistent and 
timely, multiyear is vital if the B61 LEP schedule is to be 
maintained.
    Second, the schedule and scope of the B61 LEP relate to 
strong technical drivers, which are discussed in my classified 
September 2011 annual stockpile assessment letter. I recommend 
the members read the letter, and I welcome the opportunity to 
discuss it further.
    Beyond the B61 program, as we move forward on 
modernization, we must have a clear understanding and broad 
agreement about the vision for our stockpile 20 years from now. 
That vision must be robust in the face of current and future 
treaty obligations, evolving policy direction, stockpile 
technical realities, our infrastructure capabilities, and 
fiscal constraints. I believe such a vision is possible and 
emerging and we are actively supporting DOD and NNSA as they 
work through this planning.
    Finally, I am encouraged by the recent discussion 
concerning governance of the NNSA laboratories. In my view, 
reinvigorating the government-owned and contractor-operated 
model, which implies government oversight at the strategic 
rather than transactional level, offers the potential for 
improvements in operational performance, contractor 
accountability, and cost-effectiveness at the labs with 
attendant cost savings on the Federal side.
    With respect to fiscal constraints, we recognize the 
funding required at Sandia for the B61-12 is significant. In my 
full testimony, I outline steps we have taken to control costs. 
These include changes to pension and medical benefits, 
leveraging the work we do for other Federal agencies, and the 
utilization of the tools of stewardship. Throughout this 
program, we will continue to see further cost efficiencies.
    I just mentioned the work that we do for other Federal 
agencies. I strongly believe that today it is no longer 
possible for my laboratory to continue to deliver consistently 
on the commitments to the nuclear weapons program without the 
synergistic interagency work that attracts top talent, hones 
our skills, and provides stability through the nuclear weapons 
program cycles.
    Regarding talent, I am pleased to tell you that we have 
been able to recruit to Sandia top talent to support the full 
range of our national security programs. Specifically since 
fiscal year 2010, we have hired about 300 outstanding advanced 
degreed scientists and engineers directly into the weapons 
program. Of these, well over one-half are recent graduates 
anxious to begin their careers working on the Nation's nuclear 
deterrent. It is very important that we provide them with a 
stable environment to pursue the multiyear learning it takes to 
technically steward the Nation's nuclear stockpile now and into 
the future. To enable their success, we must strive for a 
national commitment to the program, for in the end the Nation's 
deterrent rests on the strength of our people.
    Let me close by summarizing the key points.
    Authorization and appropriation of the fiscal year 2013 
budget request and consistent, timely multiyear funding are 
critical to a fiscal year 2019 FPU for the B61.
    The schedule and the scope for the B61-12 is based on 
strong technical drivers.
    We need a broadly agreed, 20-year detailed vision for our 
nuclear deterrent.
    We are staffed and ready to execute the B61-12.
    Operational performance, productivity, and cost-
effectiveness can be increased at the laboratories by 
improvements to the government construct under which we 
currently operate.
    Thank you and I welcome your questions.
    [The prepared statement of Dr. Hommert follows:]

               Prepared Statement by Dr. Paul J. Hommert

                              INTRODUCTION

    Chairman Nelson, Ranking Member Sessions, and distinguished members 
of the Senate Armed Services Subcommittee on Strategic Forces, thank 
you for the opportunity to testify. I am Paul Hommert, President and 
Director of Sandia National Laboratories. Sandia is a multiprogram 
national security laboratory owned by the U.S. Government and operated 
by Sandia Corporation \1\ for the National Nuclear Security 
Administration (NNSA).
---------------------------------------------------------------------------
    \1\ Sandia Corporation is a subsidiary of the Lockheed Martin 
Corporation under Department of Energy prime contract no. DE-AC04-
94AL85000.
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    Sandia is one of the three NNSA laboratories with responsibility 
for stockpile stewardship and annual assessment of the Nation's nuclear 
weapons. Within the U.S. nuclear weapons enterprise, Sandia is uniquely 
responsible for the systems engineering and integration of the nuclear 
weapons in the stockpile and for the design, development, 
qualification, sustainment, and retirement of nonnuclear components of 
nuclear weapons. While nuclear weapons represent Sandia's core mission, 
the science, technology, and engineering capabilities required to 
support this mission position us to support other aspects of national 
security as well. Indeed, there is natural, increasingly significant 
synergy between our core mission and our broader national security 
work. This broader role involves research and development in 
nonproliferation, counterterrorism, energy security, defense, and 
homeland security.
    My statement today will provide an update since my testimony of 
March 30, 2011, before this subcommittee. Starting from an overall 
perspective of the nuclear weapons program and the challenges facing us 
since the end of the Cold War, I will refer to the following major 
issues:

    (1)  modernization programs with emphasis on the B61 Life Extension 
Program (LEP),
    (2)  U.S. nuclear stockpile assessment,
    (3)  status of the capability base needed to support our mission,
    (4)  nonproliferation,
    (5)  broader national security work,
    (6)  workforce, and
    (7)  governance.

    These issues will be viewed within the context of the 
administration's request to Congress for the fiscal year 2013 budget 
and of the appropriated fiscal year 2012 budget.

                     MAJOR POINTS OF THIS TESTIMONY

    1.  For the nuclear weapons enterprise to meet the B61 LEP scope 
and schedule as decided by the Nuclear Weapons Council in December 
2011, it is essential that the funding levels in the President's fiscal 
year 2013 budget request to Congress be authorized and appropriated. In 
addition, funding disruptions that could result from a fiscal year 2013 
continuing resolution would have an almost immediate impact on our 
ability to meet the fiscal year 2019 first production unit schedule for 
the LEP. Therefore, if the schedule is to be met, plans for 
uninterrupted execution under a possible continuing resolution will be 
needed.
    2.  The schedule and scope of the B61 LEP relate to strong 
technical drivers, which are discussed in my September 2011 annual 
stockpile assessment letter. I recommend that members read the letter, 
and I welcome the opportunity to discuss it in an appropriate venue.
    3.  Beyond the B61 LEP, further planning is needed to determine the 
details of the modernization activities consistent with the 2010 
Nuclear Posture Review framework. The planning update needs to reflect 
the current plutonium strategy, improved understanding of modernization 
costs, and technical state of the stockpile; it also needs to be 
consistent with overall fiscal constraints. We are supporting 
Department of Defense (DOD) and NNSA planning efforts currently 
underway.
    4.  I am encouraged by the recent discussion concerning governance 
of the NNSA laboratories. In my view, reinvigorating the government-
owned and contractor-operated model, which implies government oversight 
at the strategic rather than transactional level, offers the potential 
for improvements in operational performance, contractor accountability, 
and cost-effectiveness at the laboratories, with attendant cost savings 
on the Federal side.

               PERSPECTIVE OF THE NUCLEAR WEAPONS PROGRAM

    It is my view that we have entered a new era for the U.S. nuclear 
deterrent. The nuclear weapons enterprise must address for the first 
time the following imperatives: modernizing the nuclear weapons 
stockpile, which depends critically on the use and continued 
advancement of the tools of stewardship, upgrading production 
infrastructure in a targeted manner, and maintaining the current 
stockpile through a modernization transition period. Such an 
environment creates funding demands not seen in recent decades, and it 
will require risk-based prioritization of the program, along with 
continued emphasis on strong program management and cost-effectiveness.
    The current nuclear stockpile was largely developed, produced, and 
tested in the 1970s and 1980s, during the Cold War. It was the time of 
the arms race, as new nuclear systems were frequently being developed 
and fielded.
    After the 1992 moratorium on underground testing, the nuclear 
weapons program went into its next phase, science-based stockpile 
stewardship. The advanced tools and deeper scientific understanding we 
developed in that period have been applied to our annual assessment of 
the stockpile, to stockpile maintenance activities such as replacement 
of limited-life components, and to the qualification of the W76-1 LEP. 
Science-based stockpile stewardship has been successful in generating 
the required scientific competencies and resources and attracting 
talented staff, but it was not accompanied by a broad-based effort to 
modernize the nuclear arsenal.
    Now, some 20 years after the end of the Cold War, we have a 
stockpile that has become significantly smaller and older. Considering 
the average age (27 years) of the stockpile and our insights into the 
stockpile, we have clearly reached a point at which we must conduct 
full-scale engineering development and related production activities to 
modernize the nuclear arsenal. This work can be accomplished only by 
relying on the tools of stewardship and a revitalized, appropriately 
sized production capability. Let me restate that, in my view, the 
nuclear weapons enterprise has never before faced the combined need to 
modernize the stockpile, address production infrastructure, and further 
stewardship while sustaining major elements of the current stockpile.
    The new era of the nuclear deterrent is guided by the strategic 
framework for U.S. nuclear weapons policy outlined in the 2010 Nuclear 
Posture Review and associated documents, such as the fiscal year 2012 
Stockpile Stewardship and Management Plan. However, in the past year, 
several factors have required further detailed planning to confidently 
establish the basis for sustaining and modernizing our nuclear 
deterrent. These factors include changes in the plutonium strategy, a 
deeper understanding of modernization costs, and the technical state of 
the stockpile. As we move forward, we must have a clear understanding 
and broad agreement about the vision for our stockpile 20 years from 
now. That vision must be robust in the face of current and future 
treaty obligations, evolving policy direction, stockpile technical 
realities, our infrastructure capabilities, and fiscal constraints. I 
believe such a vision is emerging, and we are actively supporting the 
DOD and NNSA as they work through this planning. Simultaneously, we are 
ensuring that Sandia is positioned to fulfill its responsibilities in 
support of the Nation's nuclear deterrent. We are confident in our 
ability to do so.

                            BUDGET OVERVIEW

    I am pleased to report that the appropriated fiscal year 2012 
budget will allow Sandia to both complete the 6.2A cost study for the 
B61 LEP and initiate full-scale engineering development at a pace 
consistent with a fiscal year 2019 first production unit. In this 
context, I wish to extend my thanks to the key authorization and 
appropriation committees of Congress for having approved reprogramming 
of fiscal year 2012 funds to achieve the full budget level required to 
complete our work. Without reprogramming, staffing would have been 
impacted at a number of nuclear weapons enterprise sites, including 
Sandia. In my view, fiscal year 2013 is critical to sustaining 
modernization at the schedule and scope required by recent Nuclear 
Weapons Council decisions and the overall framework of the Nuclear 
Posture Review. Within this section, I will focus on key elements 
required for Sandia to execute its near- and long-term responsibilities 
and the manner in which the fiscal year 2013 budget request to Congress 
reflects those requirements.
The B61 Life Extension Program
    Sandia supports the administration's fiscal year 2013 budget 
request to Congress, which addresses funding for the B61 life 
extension. If fully appropriated, the fiscal year 2013 site splits for 
Sandia provide the necessary budget growth that permits Sandia to meet 
program requirements. fiscal year 2013 is crucial for the B61 as all 
component designs must be brought to a level that ensures successful 
system qualification on the path to fiscal year 2019. We will complete 
detailed cost estimates for the required scope of the B61 program in 
June of this year; however, from work we completed in 2011, we know 
with high confidence that the level of funding included in the fiscal 
year 2013 budget request is commensurate with the technology maturation 
and integration that must be conducted in fiscal year 2013 in order to 
meet the required schedule.
    Last year I testified that the B61 LEP would complete the cost 
estimation for the full-scope B61 LEP in fiscal year 2011. Indeed, a 
detailed cost study was completed on schedule that met all the DOD and 
NNSA objective requirements. As it became clear that the cost of 
meeting all objective requirements with delivery in fiscal year 2017 
would exceed near-term resource availability, the B61 LEP system design 
team was directed to examine reduced-scope options, which meet a 
renegotiated set of threshold requirements that would represent 
acceptable risk for the weapon system going forward. This work led to 
the scope accepted by the Nuclear Weapons Council in December 2011, 
which reduces the cost of the program while ensuring a modernized B61 
that meets military threshold requirements and addresses technical 
concerns expressed in my annual stockpile assessment letter from 
September 2011. While I strongly support this scope, it is important to 
recognize that the new program does have increased risk resulting from 
the partial reuse of components and the loss of schedule margin. The 
schedule is now driven tightly by technical realities in the current 
system. The reuse of certain components further heightens the 
importance of a robust surveillance program.
    I cannot emphasize enough the significance of timely funding 
authorization and appropriation. Consistent, predictable multiyear 
funding is vital for the fiscal year 2019 B61-12 first production unit 
as it allows for the seamless progression of development, 
qualification, and production and for development of the necessary 
workforce. Plans for uninterrupted execution under a possible 
continuing resolution in fiscal year 2013 will be needed if the 
schedule is to be met. The success of the B61 LEP also requires the 
necessary support for the nuclear explosive package agency (Los Alamos 
National Laboratory) and the production complex.
    The B61 LEP represents the largest nuclear weapon product 
development effort that the nuclear weapons complex has undertaken 
since the 1970s, an effort roughly three times that of the W76 Trident 
II SLBM warhead LEP, which is now in production. We recognize that the 
funding levels required at Sandia for this program are significant. 
Therefore, we are focused on efforts to reduce cost over the life of 
the program and to manage with full transparency and commitment to 
program rigor. Examples of our efforts include: (1) actions we have 
taken to reduce, by over $1 billion, labor costs associated with 
Laboratory-wide pension and medical care over the coming decade; (2) 
maximum leverage we have sought from other weapon development efforts 
and from the work we do for other Federal agencies; and (3) consistent 
use of the tools of stewardship to reduce the costs of weapon 
qualification by comparison with historical efforts. Throughout this 
program, we will continue to seek further cost efficiencies. For 
example, the governance reform efforts being considered also afford the 
opportunity for further savings.
    My last comment on the B61 program has to do with staffing. For 
this life extension, we have now approximately 30 product realization 
teams working to complete the Weapon Development and Cost Report and 
being prepared to initiate full-scale engineering design of components 
and subsystems upon entry into Phase 6.3. We aggressively staffed this 
program in fiscal year 2011 to accomplish our objectives on the current 
schedule. In July 2010, we had a core of approximately 80 staff on the 
B61 project. By the end of fiscal year 2011, we had staffed to more 
than 500. This group includes experienced weapon designers, individuals 
with design and program management experience from other large non-
nuclear-weapon programs at Sandia, and many new professionals who 
represent the future intellectual base of our deterrent. It has been a 
challenge to assemble this team, but we have done so. Major 
instabilities in funding will make it difficult to keep this team 
stable and will lead to amplified schedule and cost impacts if we need 
to periodically reassemble the team.
Further Modernization Efforts
    The B61 LEP is one in a series of programs with timelines extending 
to 2035 that have been documented in the fiscal year 2012 Stockpile 
Stewardship and Management Plan. Among them are the W88 Alteration 
(ALT), the modernization of elements of our ballistic missile 
capabilities, and a possible weapon system associated with long-range 
stand-off delivery vehicles.
    Sandia is pursuing work on the W88 ALT, which involves replacing 
the Arming, Fuzing, and Firing (AF&F) system and other nonnuclear 
components. The W88 ALT is scheduled for first production unit in 
December 2018, driven by the overall Navy program and schedule, 
components reaching their end of life, the need for additional 
surveillance quantities, and alignment with the common fuze developed 
for the Air Force for the W87.
    The Nuclear Posture Review recommended ``initiating a study of LEP 
options for the W78 ICBM warhead, including the possibility of using 
the resulting warhead also on SLBMs to reduce the number of warhead 
types'' (p. xiv). A larger vision of an interoperable set of ballistic 
warheads has matured since the release of the Nuclear Posture Review 2 
years ago; this approach will support a more flexible, responsive, 
resilient stockpile for an uncertain future. Indeed, the Phase 6.1 
concept assessment study for this modernization effort is nearing 
completion, and Sandia provided the warhead systems engineering and 
integration. We are fully leveraging the work we have done over the 
past several years on modular warhead architectures and adaptable 
nonnuclear components, including a recent study focused on a modular 
AF&F design.
    By being adaptable to several weapon systems, our modular AF&F 
approach leads to significant cost savings. Using an envelope of the 
requirements for the W78, W88, and W87, our study concluded that the 
modular AF&F approach is technically feasible. While the modular AF&F 
cannot be identical in each weapon system because the nuclear explosive 
package is different, it can be designed to be adaptable, with many 
common components and common technologies. In each life extension, we 
will also make appropriate improvements in safety and security, which 
are enabled in part by miniaturization of electronics. Savings in 
weight and volume, at a premium in reentry systems, can be used for 
those additional safety and security features. The results of the W78 
LEP Phase 6.1 concept assessment study are planned for briefing to the 
Nuclear Weapons Council Standing and Safety Committee later this year.
Stockpile Surveillance and Assessment
    Stockpile surveillance and assessment play a crucial role in 
assuring the nuclear deterrent. Findings from conducting this program 
provide us with knowledge about the safety, security, and reliability 
of the stockpile, provide the technical basis for our annual stockpile 
assessment reported to the President of the United States through the 
annual assessment process, and inform decisions about required elements 
of the LEPs and their timelines.
    Multiple drivers heighten the importance of the surveillance 
program. Among them are the following: an unprecedented age of the 
stockpile, which includes many subsystems that were not originally 
designed for extended life; smaller stockpile numbers; and for at least 
the next 20 years, surveillance of a stockpile that will contain 
simultaneously both our oldest weapons and life-extended weapons, which 
must be examined for possible birth defects and for further aging of 
reused components.
    If fully appropriated, the fiscal year 2013 site splits for Sandia 
provide the resources to meet our highest priority surveillance needs, 
which include conducting planned system tests--both flight and 
laboratory tests--but they limit the pace at which we can implement 
additional component tests and develop new diagnostics needed to 
improve our predictive capabilities. These predictive capabilities, 
which provide a better understanding of margins, uncertainties, and 
trends, are needed to ensure lead times necessary to respond to aging 
issues that would have the potential to reduce stockpile safety, 
security, or reliability. To minimize the risk to the stockpile, given 
the realities of the current fiscal environment, we are implementing a 
risk-based prioritization of our surveillance activities. Success in 
this important area will require continued strong budget support in the 
out-years.
Essential Infrastructure and Capabilities
    Sandia's capabilities are essential to its full life cycle 
responsibilities for the stockpile: from exploratory concept definition 
to design, development, qualification, testing, and ultimately to 
ongoing stockpile surveillance and assessment. Let me point out a few 
examples.
    The NNSA complex transformation plan designated Sandia as the Major 
Environmental Test Center of Excellence for the entire nuclear weapons 
program. Our facilities and equipment in this area are extensive: (1) 
20 test facilities at Sandia; (2) the Tonopah Test Range in Nevada; and 
(3) the Weapon Evaluation Test Laboratory in Amarillo, TX. We use 
environmental test capabilities to simulate the full range of 
mechanical, thermal, electrical, explosive, and radiation environments 
that nuclear weapons must withstand, including those associated with 
postulated accident scenarios. In addition to these experimental and 
test facilities, Sandia's high-performance computing capabilities are 
vital tools for our mission responsibilities in stockpile surveillance, 
certification, and qualification, and they have proved to be 
indispensable in our broader national security work.
    I am very pleased that funding for the completion of the Test 
Capabilities Revitalization Phase 2 is included in the administration's 
fiscal year 2013 budget request for weapons activities. This funding 
will enable us to renovate our suite of mechanical environment test 
facilities, which are essential to support the design and qualification 
of the B61 life extension and subsequent life extensions.
    The administration's fiscal year 2013 budget request also includes 
funding for the initial Tonopah Test Range upgrades in recognition of 
this facility being an essential mission requirement. However, 
sustained investment over multiple years is necessary to complete the 
required scope of the upgrades. Development flight tests will be 
conducted at the Tonopah Test Range for the B61 life extension.
    I am equally pleased that the new budget request addresses the 
beginning of a recapitalization program for our silicon fabrication 
facility, the requirements for which I addressed in my testimony last 
year. I will restate that Sandia stewards for the nuclear weapons 
program, as well as for the Department of Energy's (DOE) 
nonproliferation payloads, the microelectronics research and 
fabrication facility, where we design and fabricate an array of unique 
microelectronics, specialty optical components, and 
microelectromechanical system devices. The fiscal year 2013 budget 
request includes funding for the first year of a 4-year program that 
will recapitalize the tooling and equipment in our silicon fabrication 
facility, much of which dates back about 15 years in an industry where 
technology changes almost every 2 years. For completion of the program, 
commitment to multiyear funding is required. Recapitalization will 
reduce the risk for delivering the B61 LEP and ensure production of the 
radiation-hardened components required by the W88 ALT and all future 
reentry system LEPs. As we go forward on modernization, our 
microelectronics fabrication facilities, which form the basis of our 
trusted foundry, will be critical to ensuring the integrity of our 
supply chain.
Nonproliferation
    Sandia's portfolio of nonproliferation activities contains a full 
array of programs aimed at combating the proliferation of weapons of 
mass destruction. Working collaboratively with Los Alamos and Lawrence 
Livermore national laboratories and several other DOE laboratories, we 
are:

         developing technologies to ``convert, remove, and 
        protect'' nuclear and radiological materials that could be used 
        in nuclear and radiological weapons,
         conducting international work for material protection,
         increasing effectiveness in large-scale field 
        experimentation for nonproliferation test monitoring and arms 
        control,
         ensuring that the on-orbit satellite program meets 
        current requirements and adapts to future monitoring 
        challenges,
         developing ground-based systems for more effective 
        seismic monitoring;
         enabling other countries to develop nuclear security 
        centers of excellence, and
         conducting international work in support of 
        cooperative threat reduction programs.

    In addition to working with other laboratories, we are engaging 
globally with international partners in more than 100 countries to 
reduce the threat of proliferation. Our primary customers for this work 
are the NNSA, Department of State, and DOD. As a general comment, I 
will state that nonproliferation funding has shown stability at Sandia. 
The administration's fiscal year 2013 Budget Request to Congress 
continues that trend, with budget increases in certain areas and 
reductions in others. I am pleased to see balanced increases both in 
the technologies that respond to immediate national security needs and 
in the R&D necessary to sustain the flexibility to meet future national 
security requirements. In particular, the long lead time for satellite 
monitoring systems requires a sustained commitment to leading-edge R&D. 
This budget demonstrates that commitment and will enable the national 
labs to attract ``the best and the brightest,'' who are eager to 
participate in exciting R&D projects with an enduring impact on U.S. 
and global security.
Synergy between Our Nuclear Weapons Mission and Broader National 
        Security Work
    Today's national security challenges are highly diverse. The NNSA 
laboratories are contributing solutions to the complex national 
security challenges. Indeed, as mentioned in the fiscal year 2011 
Stockpile Stewardship and Management Plan Summary, ``while NNSA nuclear 
weapons activities are clearly focused on the strategic deterrence 
aspects of the NNSA mission, they also inform and support with critical 
capabilities other aspects of national security'' (p. 7). In turn, to 
sustain and sharpen these competencies, Sandia relies on its broader 
national security work. The symbiotic relationship between the nuclear 
weapon mission and broader national security missions prevents 
insularity and creates a challenging, vigorous scientific and 
engineering environment that attracts and retains the new talent that 
we need. Such an environment is essential to succeed against the 
challenges we now face. The following example highlights the way in 
which this symbiotic relationship works.
    Sandia has led the development of real-time processing and high 
performance-to-volume ratio technologies for synthetic aperture radar 
(SAR). Both technologies were made possible by our extensive design and 
development work for radars for nuclear weapon fuzing. The technologies 
have been leveraged and are currently used by the DOD. The extensive 
SAR work has sharpened our radar design competencies and kept Sandia 
aligned with advances in radar technology, such as radio-frequency 
integrated circuits. We are now applying these modern technologies to 
the design of the replacement radar for the B61 LEP and the W88 ALT.
    This symbiotic relationship enables leveraging not only 
capabilities and technologies, but also engineering practices and 
processes. One of these areas with direct application across business 
areas and customers is cost management. A new cost management process 
was developed and successfully implemented during our work on fuze 
development for the U.S. Navy. Once work was delivered within the 
Navy's cost targets, many of the staff transitioned to work on the 
large satellite programs, where additional processes were developed for 
cost and change control. Once again, after delivery of expected 
results, many of those same staff transitioned onto NNSA's current 
LEPs, including the B61 LEP. This synergistic rotation of staff across 
business areas and the lessons learned from a diverse set of customers 
and programs have created an environment of cost control and provided a 
set of cost management processes and practices that are now being 
implemented on NNSA's current programs. In a climate of fiscal 
responsibility, Sandia is finding innovative solutions to control cost.
    Today it is no longer imaginable that the laboratories could 
deliver consistently on the commitments to the nuclear weapons program 
without the synergistic interagency work that attracts top talent, 
hones our skills, and provides stability through the nuclear weapons 
program cycles. Government commitment for the broad national security 
work of the laboratories is essential for the United States to ensure 
the preeminence of our nuclear weapons and to enable multidisciplinary 
technical solutions to other complex and high-risk national security 
challenges.
Workforce
    Our talented people are our most fundamental capability. Given the 
scope and nature of our work, it is mandatory to continue attracting, 
retaining, and training a highly capable workforce committed to 
``exceptional service in the national interest.'' To do so, we must: 
(1) ensure that our work is aligned with the national purpose; (2) 
create a climate of innovation and creativity that inspires our 
workforce; and (3) create a balanced work environment that is both 
responsive to the fiscal realities of our times and attractive to the 
talented staff we need in the future.
    At Sandia, we have been proactive about hiring new staff into the 
weapons program, as experienced staff retired. The modernization 
program provides opportunities for the new technical staff to work 
closely with our experienced designers: from advanced concept 
development to component design and qualification, and ultimately to 
the production and fielding of nuclear weapon systems. Since the 
beginning of fiscal year 2010, we have hired approximately 300 
outstanding advanced-degree scientists and engineers directly into the 
weapons program as we execute modernization. Of these, well over one-
half are essentially new graduates anxious to begin their careers 
working on the Nation's nuclear deterrent. It is very important that we 
provide individuals such as these with an environment where they can 
undertake the multiyear learning it takes to technically steward the 
Nation's nuclear stockpile now and into the future. Indeed, in the end, 
the Nation's deterrent rests upon the strength of our people. We have a 
new generation of scientists and engineers prepared to take on that 
challenge now that we have entered the modernization era, but we must 
strive to provide the stability, focus, and national commitment that 
will enable their success.
    As I testified last year before this subcommittee and as I stated 
above, fiscal realities have forced us to reduce costs by addressing 
the funding liabilities in our pension program, restructuring the 
healthcare benefits, and simplifying internal processes. All these 
actions were necessary, but they can go no further without compromising 
our ability to attract and retain.
Governance
    Finally, I would like to state that I am much encouraged by the 
recent broad discussion around NNSA's oversight of the national 
security laboratories. Future improvements, as recommended by the 
National Academy of Sciences study ``Observations on NNSA's Management 
and Oversight of the Nuclear Security Enterprise'' will allow us to 
reinvest needed resources back into the mission.
    A strategic oversight model is needed, which will bring to the 
forefront the need for such governance principles as mission clarity, 
commitment to using the robust construct of federally funded research 
and development centers, and commitment to the full use of the 
government-owned and contractor-operated model.
    We understand that effective government oversight of our operations 
is essential. However, I am concerned that the magnitude and detailed 
level of our current oversight model can impede our efforts to 
continually improve our safety, security, environmental, and cost 
performance. It is also not evident that the oversight model under 
which the NNSA laboratories operate is comparable to that of other 
federally funded entities engaged in similar work. I encourage the 
administration and Congress to consider improvements in this area.

                              CONCLUSIONS

    As stated in the 2010 Nuclear Posture Review, ``as long as nuclear 
weapons exist, the United States will maintain a safe, secure, and 
effective nuclear arsenal'' (p. iii). Having embarked on the new era of 
the nuclear deterrent, we are guided by the strategic framework for 
U.S. nuclear weapons policy outlined in the 2010 Nuclear Posture Review 
and associated documents, such as the fiscal year 2012 Stockpile 
Stewardship and Management Plan. However, in the past year, several 
factors have required further detailed planning to confidently 
establish the basis for sustaining and modernizing our nuclear 
deterrent. Among these factors are changes in the plutonium strategy, a 
deeper understanding of modernization costs, and the technical state of 
the stockpile. As we move forward, we must have a clear understanding 
and broad agreement about the vision for our stockpile 20 years into 
the future. I believe such a vision is emerging, and we are actively 
supporting the DOD and NNSA in their planning efforts. Simultaneously, 
we are ensuring that Sandia is positioned to fulfill its 
responsibilities in support of the Nation's nuclear deterrent. We are 
confident in our ability to do so.
    Sandia supports the administration's fiscal year 2013 budget 
request to Congress. Seamless progression of development, 
qualification, and production on the B61 LEP requires funds 
appropriated in a timely manner in fiscal year 2013 and all subsequent 
years to meet the goal of a first production unit in fiscal year 2019. 
Our commitment to the demanding and solemn responsibility for stockpile 
modernization, stewardship, and annual assessment is unwavering. It 
also comes with an obligation to be second to none in science and 
engineering and to steward the Nation's resources efficiently. Sandia 
is committed to fulfilling its service to the Nation with excellence 
and judicious cost management. The fact that the three national 
security laboratory directors were invited to speak before you today 
and answer your questions is a clear indication of the leadership role 
of Congress in authorizing a sound path forward for U.S. nuclear 
deterrence.

    Senator Nelson. Thank you.
    We will do a 7-minute round. Senator Inhofe has to attend 
another hearing. So I will defer to him.
    Senator Inhofe. I appreciate that.
    I just returned from Afghanistan, and I will say the same 
thing to you that I said to some of the commanders there. There 
are a lot of things that we need that we are not getting. They 
are not adequately funded. This is true at the labs. This is 
not your fault. You did a great job. All three of you are doing 
a great job with the hand that you are dealt, but I think we 
need to deal you a better hand, if I have said that right, Mr. 
Chairman.
    Let me just mention a couple of things that I would like to 
get on record. Then I do have to go to the Senate Foreign 
Relations Committee because I am actually the ranking member 
there.
    The fiscal year 2013 budget for the NNSA makes a number of 
significant changes to the nuclear weapons complex 
modernization plan the President supported when he asked for 
the Senate to ratify the New START treaty. Some of you were not 
really involved on a lot of those discussions, but in 
attempting to get the votes necessary for the New START treaty, 
commitments were made that affect you.
    By deferring a major construction project at Los Alamos, 
the NNSA effectively terminated a key enabler necessary to meet 
STRATCOM requirements as well as the confidence necessary to 
support the future reductions. During our hearing in March, 
General Robert Kehler, the head of STRATCOM, testified that he 
is concerned with the lack of a plan and strategy to meet 
STRATCOM requirements. According to General Kehler, he will be 
``concerned until somebody presents a plan that we can look at 
and be comfortable with and understand that it is being 
supported.''
    So, Dr. McMillan, Dr. Hommert, and Dr. Albright, if you 
would just answer these questions, I would like to get you on 
the record.
    Do you share General Kehler's concerns?
    Dr. McMillan. Senator Inhofe, why don't I start since CMRR 
is my responsibility?
    If I could, Mr. Chairman, I failed to ask to get my written 
comments into the record. So if they could please be included.
    Senator Nelson. Without objection.
    Dr. McMillan. I would say we do not yet have a plan. In 
that I agree with General Kehler. However, from my perspective, 
I see a substantial amount of work going on both with DOD and 
with DOE, and at the laboratory we have been involved with that 
work to develop a plan.
    I mentioned elements of that development in my testimony 
which is to talk about the concept of pit reuse. In my view, a 
plan is more than a concept. A plan involves ideas, a project 
plan, and funding that is consistent with that, and we are not 
yet at that stage.
    Senator Inhofe. Okay.
    Comments, Dr. Albright? Basically do you agree with General 
Kehler?
    Dr. Albright. Yes, I would say I generally do agree with 
him. I would just make the caution that because of the deferral 
of CMRR, the technical solutions that we are looking at for our 
LEPs are constrained in a certain way that we are, I think, I 
would say, cautiously optimistic that we can accommodate those 
constraints, but it is by no means a done deal.
    Senator Inhofe. Not with the current resources you have.
    Dr. Albright. With the current resources we have. The issue 
here gets around to pit reuse and how you can accommodate that 
pit reuse within the constraints of the NPR.
    Senator Inhofe. Do you generally agree with that, Dr. 
Hommert?
    Dr. Hommert. I would share General Kehler's view that right 
at this moment we do not have a plan, as I mentioned in my oral 
statement. It is very important that we can see what the 
stockpile we want to have 20 years from now because when you 
back up from that, we have to make technical choices or begin 
scientific work today that would position us to have that 
stockpile in the future. I am encouraged that I think such a 
plan can be developed, but we do not have that in hand today.
    Senator Inhofe. The three of you heard me say in my opening 
statement that the commitment on behalf of the administration 
to modernize the nuclear weapons complex was a key element in 
the ratification of the New START treaty. Were you aware of 
that? Okay.
    Do you agree that modernization is universally recognized 
as essential to the future viability of the nuclear weapons 
complex and the prerequisite for future reductions? You would 
generally agree with that statement?
    Dr. Hommert. I would say that modernization from a 
technical standpoint is required for the U.S. stockpile, yes.
    Senator Inhofe. Is it true that this budget would result in 
a--and I am going to name some delays here--the 2-year delay in 
the B61 LEP and also delay of the completion of the W76 LEP by 
4 years and then by 3 years the W78, W88 LEP, those three 
extensions? This budget would result in those extensions?
    Dr. Hommert. Yes. The budget is consistent with the 
timeframe.
    Senator Inhofe. Lastly, I would say, does your budget 
provide the resources necessary to meet the DOD requirements?
    Here is what I am trying to get at. These are not trick 
questions or anything. I am very much concerned. It harms those 
of us who are trying to expand this program trying to meet the 
commitments that are out there that we should be meeting as a 
committee. We are on your side, but when we do not get you on 
record saying that there are some inadequacies we do not have 
much to hang our hat on. I am concerned about this, about the 
requirements.
    First of all, you talk about a letter that you sent. I am a 
little confused because I hear now and then the term 
``certification.'' Do you folks have to certify and is this in 
the form of a letter? How does that work?
    Dr. Hommert. We are required annually to submit a letter to 
the Secretary of Energy and the Secretary of Defense, each 
individually stating our technical view of the annual 
assessment of the stockpile as to its safety and reliability.
    Senator Inhofe. And modernization and----
    Dr. Hommert. Requirements that might flow from that.
    Senator Inhofe. That is good.
    Dr. McMillan. In addition, when a system first enters the 
stockpile system, Senator, we certify it at that point, and 
then we review it annually to make sure that things have not 
changed in a way that would cause us to have----
    Senator Inhofe. You are actually certifying for that point 
in time, that snapshot.
    Dr. McMillan. That is right, and then we review that.
    Senator Inhofe. All right. The subcommittee has been told 
that 1 or 2 years of additional funding will not be sufficient 
to put the U.S. nuclear weapons enterprise back on a sound 
footing. I believe, having visited with the STRATCOM people, 
that their requirement is for NNSA to generate up to 80 nuclear 
pits per year, and the NNSA will not be able to achieve that 
rate until a new CMRR facility is in operation.
    How critical are the uranium processing facility and the 
chemistry and metallurgy research replacement nuclear 
facilities to our future stockpile?
    Dr. McMillan. Senator, I have responsibility for that 
facility, so let me start.
    The purpose of that facility, just to make sure we are all 
on the same page, is that it provides the analytical 
capabilities to ensure the quality. It provides analytical 
capabilities that can serve in nonproliferation/
counterproliferation missions. It is simply the ability to 
handle the number of samples that would be required when we 
produce pits in PF4 that we need that for. At this point, 
without CMRR, we do not have a way that I know of to be able to 
make as many as 50 to 80 pits.
    Senator Inhofe. I see.
    Dr. McMillan. We can make, with investments that we do not 
yet have, we could make maybe 20 to 30 with the facilities we 
have.
    Senator Inhofe. That is a very good answer, a good answer 
to the question. Any disagreement with that?
    The last thing I want to mention, Mr. Chairman--I know my 
time expired and I do need to get back upstairs. But relating 
to these two $5 billion buildings, I do not quite understand. I 
have heard a lot of views on this that those funds and 
resources could be used elsewhere more effectively. Is there a 
reason that the two buildings have to be $5 billion buildings? 
Have you all looked into that and made recommendations?
    Dr. McMillan. Again, I have looked very hard at that 
because of my responsibilities, and I can assure you that I 
pressured my team substantially on that.
    What you always have with buildings like this is you have a 
range of prices. Our current estimate at Los Alamos is 
something in the region of $3.7 billion, but I can tell you as 
delay occurs, we are moving toward the upper end of that range. 
The range that--your $5 billion is closer to the top end of 
that range.
    But as a manager, I feel a deep responsibility for the 
taxpayers' dollars, to use those as efficiently as we can, and 
I can assure you I have worked closely with my teams to get the 
costs as low as we can while ensuring safety for the material 
that we handle.
    Senator Inhofe. I appreciate your answer, and I think it is 
significant because a lot of the things that are happening 
there, delays, things that were not in my opinion agreed upon 
in advance when they signed the New START treaty, are budget-
driven. So you look for places where the budget is on the other 
side of it. It just appears to me that some of that could be in 
better use.
    I appreciate it, Mr. Chairman, your allowing me to do this 
so I can get back to my other committee.
    Senator Nelson. Thank you very much, Senator. I appreciate 
very much your being here.
    Dr. Shank, your recent study finds a lack of trust between 
the NNSA and its laboratories. I think you have outlined it as 
the relationship as oversight over transactions versus 
oversight over processes. Can you tell us a little bit how you 
determined that lack of trust to draw that conclusion?
    Dr. Shank. In our discussions, we visited all three 
laboratories. We talked to site managers. We talked to all 
parties involved. We looked at the core issue of how one does 
oversight and does oversight effectively. If you do oversight 
with a trusted organization, you create an overall system and 
you audit that system. If you do oversight where there is a 
lack of trust, you want to look at every transaction. You want 
to look every time something moves. You want to look at every 
safety activity.
    We said, well, the really core problem is reestablishing 
trust so that one could put together a structure so that the 
laboratories could have very cost-effective oversight with 
fewer people more cost-effectively and begin to look how one 
does oversight in the industrial part of our society. We think 
it is eminently doable, but it means a very different way of 
going about doing this business.
    Sandia has a model that they have attempted to put in 
place. It has been more than a decade in coming. It is not 
making progress. It seems to me, unless we do something 
different, we will be stuck with our current situation.
    So, my view of this is there is a time now to think about 
not just doing oversight, but doing more effective oversight 
with less cost and that really is going to use some kind of 
national standards, taking advantage of other agencies that 
could do oversight, that do oversight more broadly and begin to 
make the laboratories look like not only other industry but 
even some other national laboratories in places outside NNSA.
    Senator Nelson. You are not suggesting that there not be 
oversight. What you are saying is you just cannot have 
oversight over every transaction, every movement, everything 
every day.
    Dr. Shank. Correct. Oversight is absolutely essential to 
assure the American taxpayer that the dollars are being spent 
well. We are in no way saying that that should be in any way 
done with less intensity. It should be done more efficiently, 
and when you do not trust an organization, you look at every 
movement. When you have trust and the laboratories have 
qualified through a process to have a system--they do not just 
have a system. You have to go through a qualification process--
then you monitor that system and it is a more effective way of 
doing business. It is the way industry does this kind of thing.
    Senator Nelson. Monitoring and auditing.
    Dr. Shank. Through auditing.
    Senator Nelson. I am going to ask each of the directors. 
Dr. McMillan, do you agree with what Dr. Shank has said?
    Dr. McMillan. I do. If I could just maybe add a little to 
what Dr. Shank said.
    I think the operational issues of trust may be where things 
show up most for me, and by that, I do not just mean how people 
feel about it, but rather what shows up day-to-day at the 
laboratory. I firmly agree with the importance of oversight 
because we are in a government-owned/contractor-operated 
situation, there are substantial liabilities. So the government 
has, in my view, an important governmental function in ensuring 
that we who have the responsibility for managing those 
facilities are doing it well and carefully.
    Senator Nelson. Do you agree that the current situation 
involves a lack of trust?
    Dr. McMillan. I certainly see that at the operational 
level, just as Dr. Shank described it, the evidence being that 
so many of the transactions are individually monitored. Yes.
    Senator Nelson. Dr. Albright, do you agree that there is 
this lack of trust?
    Dr. Albright. Yes, I do, and let me elaborate just a little 
bit.
    The real issue here, I think, is part of it is the 
unwillingness of the government to allow the people who they 
have actually hired to operate these facilities to make 
rational assessments of risk and operate the facilities and 
make the trades that they need to make in order to do the 
mission.
    But I think the even larger issue is the idea that we at 
the national laboratories--we are the corporate memory. We are 
the sinews and muscle and the brains of the nuclear complex. We 
need to operate as partners with the Federal Government, not as 
suppliers or vendors in the kind of contractual model that, I 
think, really is a more pervasive attitude.
    So I think we have to restore this idea that we are really 
linked arm-and-arm. We are here for the mission, both the 
government side and the laboratories. We each have a role and 
responsibility to play, and we ought to be allowed to do that.
    Senator Nelson. Dr. Hommert?
    Dr. Hommert. Yes, I would agree. I would just say that the 
terminology ``lack of trust'' to me equates to not functioning 
at the system level. I actually believe that the model we 
operate today, even from the government perspective, is not a 
highly effective oversight model in achieving an integrated 
overall improvement in the operational performance, the cost-
effectiveness, the productivity of the institutions, which I 
think at a system level we share the same goal. I think we are 
actually not progressing on that as effectively as we could 
because of the model we operate in.
    Senator Nelson. If there were trust, then it would be much 
easier for the oversight to move away from transactional to 
more directional because you have been hired to do what now 
they do not trust you to do without their oversight. Right? 
Understandable. Thank you.
    Senator Vitter, you have arrived. Do you have some opening 
comments you might like to make or would you like to go to some 
questions?
    Senator Vitter. Mr. Chairman, I do not. I will wait until 
the questions and discussion, if that is appropriate now or a 
little later.
    Senator Nelson. Okay, thank you. We are taking 7-minute 
rounds.
    Dr. Patel, your study found that the autonomy in the 
laboratories has significantly declined as FFRDCs, a hallmark 
of DOE dating back to the Manhattan Project which has given 
rise to scientific excellence. Can you explain this perhaps in 
a little bit more detail?
    Dr. Patel. Yes. Thank you, Mr. Chairman.
    What do I mean by autonomy? By autonomy, we mean a task is 
given and then it is monitored not on a transaction basis but 
on a performance basis, performance which is based on a system 
of checks and balances that, as the work is carried out, that 
are put in place.
    What has happened and what we observed through our visits 
to the three laboratories, as well as discussions with a number 
of scientists, engineers, and mid-level managers, is that many 
of the decisionmaking capabilities no longer exist with them, 
resulting in a more short-term look at how science and 
engineering are carried out and much of the long-term planning 
often does not get done principally because of the 
transactional oversight that I just mentioned and we have heard 
about earlier.
    So one issue is how do we go about getting to this issue of 
autonomy. I think especially in the science and engineering 
area where the work gets carried out not over a yearly period, 
but it is also over several years, and the importance of it 
cannot be minimized because that is what provides the 
underpinning of the primary responsibility of the three 
laboratories for the nuclear stockpile. In order to do that, 
what is required is a level of trust but, more than that, an 
understanding on the part of NNSA and other managers that the 
laboratory directors are the people who are closest to the real 
problems and should be given an opportunity to plan a program 
which assures the long-term reliability of the science and 
engineering, which then in turn impacts upon the long-term 
reliability of the nuclear stockpile.
    The second issue with autonomy is an increasing amount of 
non-scientific and non-technical operational oversight of what 
gets done, and this very quickly results in some parts of the 
activity seem to be being discouraged. Especially experimental 
activities where a young scientist or an engineer wants to 
carry out an experiment to assure that certain expectations, 
certain modeling calculations are right, those are often slowed 
down. The ultimate result is that the autonomy which should 
reside with the young people in deciding how to get things done 
is not there. It leads to, over the long-term, difficulty in 
hiring the kind of outstanding people the laboratories need.
    I believe that a good example of an autonomous laboratory 
which produces a lot from my personal experience is Bell 
Laboratories where I managed all of their physics and material 
science activities for a fair period of time. We were given 
overall responsibility to ensure that the physics or material 
science that was needed by the company was there, but we were 
not told how to do each and every single experiment. Yes, we 
were audited at the end of the year. Yes, we were required to 
provide progress reports, but nobody second guessed us in terms 
of what we were doing. I think that level of autonomy should 
come back to the laboratory directors for us to assure that our 
taxpayers' dollars get us the biggest bang for the buck.
    Senator Nelson. Thank you.
    Dr. McMillan, do you agree that there has been pressure on 
the independence of your laboratory compared to prior years?
    Dr. McMillan. I think there are two areas for that, Mr. 
Chairman.
    First, let me refer back to the annual assessment process, 
the annual assessment of certification. In that regard, I feel 
no pressure on the outcomes of our studies, and were there any 
pressure there, I would be deeply concerned.
    However, in the types of activities that Dr. Patel 
described, I share his concern. In particular, he talked about 
the assignment of tasks and then monitoring to see that they 
are finished. I would add to that ensuring that that assignment 
is at the right level because if the assignment is at a very 
low level, it becomes do this, do that, do the other thing. On 
the other hand, if it accomplishes this goal, I think that 
draws on the laboratory's skills.
    Finally, as Dr. Patel mentioned in Bell Labs, I think there 
are other examples that we need to look to today to understand 
relationships between the government and FFRDCs. Here, I think 
of places like the Jet Propulsion Laboratory, the Applied 
Physics Laboratory at Johns Hopkins, et cetera. We have 
examples, and I think looking at those examples for models 
could be very helpful.
    Senator Nelson. Dr. Albright?
    Dr. Albright. I actually have nothing to add. I think Dr. 
McMillan hit the nail right on the head.
    Senator Nelson. Thank you.
    Dr. Hommert?
    Dr. Hommert. Yes, I agree, Mr. Chairman. I would just add 
that I think this is a very pragmatic issue for us. As we 
approach modernization, it is very important that we can look 
to best leverage the funds. If we are tasked at a very fine 
level, we lose some of the ability to leverage and achieve 
overall cost-effectiveness and productivity as we try to 
accomplish modernization.
    Senator Nelson. Senator Vitter?
    Senator Vitter. Thank you, Mr. Chairman, and thanks to all 
of you for being here and, more importantly, for your work.
    Like a lot of members on the subcommittee and otherwise, I 
have a single, very basic, fundamental concern which is funding 
for all this activity really being dramatically cut and changed 
since the New START treaty was passed in a way that is 
inconsistent with some of the fundamental discussions, 
including the section 1251 updated report that led to it being 
passed. That is my big, big concern here. There are plenty of 
other areas of concern, but that is my big concern.
    So, Dr. Hommert, let me start with you because I think you 
signed onto a letter that is a clear example of the scenario I 
am talking about. In December you wrote Senators Kerry and 
Lugar as chairman and ranking member of the Senate Foreign 
Relations Committee with other national laboratory leadership 
saying that, ``we are very pleased by the update to the section 
1251 report as it would enable the laboratories to execute our 
requirements for ensuring a safe, secure, reliable, and 
effective stockpile,'' et cetera. Also, ``it clearly responds 
to many of the concerns that we and others have voiced in the 
past about potential future year funding shortfalls and it 
substantially reduces risk to the overall program.''
    Since then, we passed New START and since then the budgets 
have suffered. So what is your current assessment of our 
staying on that promised section 1251 report path?
    Dr. Hommert. It is clear that since that letter, which I 
think was probably late 2010, some of the conditions have 
changed. We have a different plutonium strategy that will 
require, as Dr. McMillan can speak to, a different approach. We 
have a better understanding of the costs of modernization, and 
I think that right now, as I mentioned earlier, we do not yet 
have a plan that is completely closed and by that I mean with 
an authorized and appropriated budget plan in multiyears that 
would lead me to believe the same level of confidence at that 
time. I believe we can get to that. Of course, in the 
intervening time, we have faced additional fiscal constraints 
overall which have clearly impacted the budget effort. So some 
further work is necessary to achieve that same level of 
confidence going forward at this point.
    Senator Vitter. Today, as we speak, would you be prepared 
to sign the same type of letter and express the same level of 
confidence?
    Dr. Hommert. I would not be able to do that today without 
seeing the details of the plan of how we would move the 
entirety of the stockpile through a modernization period given 
the current constraints we have.
    Senator Vitter. The changes that have occurred, including 
strategy that affects spending--do any of those justify in your 
mind the level of budget cuts that we have seen in proposals 
since that assurance to Congress since the section 1251 report 
update?
    Dr. Hommert. Let us see. I believe that we have pressure on 
both sides, downward pressure on the budget, also some cost 
estimates that in the intervening time both in the facility 
space and in the modernization effort require a new risk 
position on the program overall. We do not have that plan yet 
defined. So I guess I cannot quite answer that. What I can say 
is that clearly the budget picture is more constrained from 
both the costs of the enterprise and also the overall fiscal 
constraints that you are dealing with. That requires a new plan 
which we do not have at this point fully developed.
    Senator Vitter. Dr. McMillan, I would like to ask you the 
same general sorts of things. You say in your testimony today 
that you, ``continue to believe that the direction laid out in 
the NPR and the 1251 report provides an appropriate and 
technically sound course.''
    Dr. McMillan. That is correct.
    Senator Vitter. Now, first of all, I assume when you say 
the 1251 report, you mean that update.
    Dr. McMillan. The updated report, yes. Thank you.
    Senator Vitter. I agree that that is a sound course. My 
question is, are we on that course anymore?
    Dr. McMillan. No, we are not on that course.
    In answer to elements of the other questions you had asked, 
I see us in a position where our risk is increasing. We are 
working very closely with our colleagues in DOD and DOE to 
develop the plan that my colleague, Dr. Hommert, talked about. 
However, I believe that is a plan that has higher risk than the 
plan that we had laid out in the 1251 updated report.
    Senator Vitter. So I take it from what you just said, first 
of all, the budget cuts since December 2010 did not flow out of 
developing a new plan. They just happened and we are trying to 
get a new plan built around that now.
    Dr. McMillan. I cannot speak to all the details of how the 
budget occurred. That is not something I am an expert in. But I 
can tell you that in the current budget environment, which is 
understandably constrained with the overall budget that our 
Nation faces, that we are working now to say how can we move 
forward given the budget we have. It is a very difficult 
problem.
    Senator Vitter. My only point is that these new numbers, 
these cuts happened first and we are trying to cope with it. It 
is not the natural outflow of a new, improved plan.
    Dr. McMillan. From my perspective, we do not yet have a 
plan because we do not have a budget that is associated with 
that plan that we understand yet.
    Senator Vitter. I think also what you said a few minutes 
ago is that when we get there, you expect that new plan to put 
us at higher risk.
    Dr. McMillan. That is correct. This plan has more technical 
risk in it than the technical risk that we had in the plan that 
was laid out in 2010.
    Senator Vitter. Mr. Chairman, that is my big concern, and I 
think it is a pretty simple story. The Senate, I think, paid 
great attention to this testimony from these experts in 
December 2010, and I think the 1251 updated report was pivotal 
in passing New START through the Senate. Now, I did not vote 
for it, but I think it was pivotal in getting the affirmative 
votes. Here we are a year and a half later and it is all out 
the window, and all bets are off, and I am gravely concerned 
about that.
    Now, I know we are in a tough budget environment, but it is 
not like we were running surpluses in December 2010. It is not 
like we are in a very different budget environment. We knew all 
of that then. I am real concerned about our collectively having 
passed New START based on these promises, this course, and now 
hardly a year and a half later, we are way off course. We are 
trying to get a plan to catch up with lower budget numbers, and 
the experts tell us when--and we are not there yet--we will be 
at higher risk.
    Thank you.
    Senator Nelson. Thank you, Senator Vitter.
    Dr. Shank, your report stressed the importance of NNSA 
laboratories being national security laboratories for the 
government as a whole, and this was put forth in a governance 
charter signed by Secretaries Chu, Gates, Director of National 
Intelligence Blair, and Deputy Secretary of Homeland Security 
Lane.
    Can you explain the importance of this charter? Do you see 
it as competition to other government agency laboratories, and 
if there is, is competition such a bad thing?
    Dr. Shank. I believe the governance charter gives the 
agencies who signed onto that charter an opportunity to utilize 
the unique skills of the laboratories that have been developed 
as a part of their weapons mission. The weapons mission is 
becoming much more complex and costly. We just heard about cost 
in discussing that. By having the core capabilities that allow 
one to execute the weapons mission, having those capabilities 
exercised in problems that are important to the Nation, I think 
that that is an extraordinary advantage and a cost-effective 
way for the laboratories to deliver on their mission.
    I believe the capabilities are so unique that I do not see 
the issue of competition arising. I do not think that is an 
issue from my perspective. However, I must say we, as a 
committee, did not study competition. We looked at what were 
the unique capabilities in the lab, and those are the ones that 
are likely to be used.
    Senator Nelson. Dr. McMillan, what is your view on the 
importance of this governance charter, and do you feel that it 
creates from your perspective competition with the other 
laboratories? Or do you, as Dr. Shank has indicated, feel that 
perhaps your approach is so unique that competition is not a 
factor?
    Dr. McMillan. Let me take the second question first, Mr. 
Chairman, if I may. I think, by and large, the reason that 
other organizations come to our laboratories is because we are 
able to offer unique capabilities to them. So we look very hard 
to say are the questions we are being asked, the problems we 
are being asked to solve by DOD, DHS--are they aligned with the 
capabilities we have from the nuclear weapons work that we do 
and do we bring uniqueness to that.
    In answer to your first question, I think in many ways the 
memorandum of understanding really is aimed at formalizing 
something that has been happening over time. I think it is good 
in that regard because if there are important national security 
problems that the capabilities of the laboratories can be 
brought to bear on, particularly ones that then feed back in a 
positive way to our nuclear weapons mission, which, I think, 
almost all do, that it is very appropriate that these other 
organizations have better access to the laboratories.
    Senator Nelson. Dr. Albright?
    Dr. Albright. The NNSA national laboratories have the 
world's fastest computers. We have the world's biggest lasers. 
We have 25,000 collectively among us of the world's smartest 
people, who work at the laboratory because they are dedicated 
to the mission of national security. To not put that into the 
service of the broader national security mission, in my view, 
would be a dereliction of duty for us. In fact, it is written 
into each one of the laboratory's charters. In fact, it is 
written into the NNSA charter that that is something that 
should happen.
    Any government program manager, whether he is sitting in 
DOD or DHS or anywhere--certainly DOD, for example--they have 
the ability and have had for a long time to make a decision as 
to whether they are going to one of their organic laboratories 
or they are going to go to a NASA laboratory or to a DOE 
laboratory. Generally, they choose to come to the national 
laboratories precisely because we have these kinds of 
capabilities. We are not cheap. So if you are a subject-matter 
expert with a particular problem to solve, you come to the 
national laboratories because you are trying to tap into that 
core set of capabilities.
    I think the Mission Executive Council and this memorandum 
of understanding that you are referring to, as Dr. McMillan 
pointed out, really just is aimed at trying to get rid of some 
of the viscosity associated with the ability of these other 
agencies to interact with the laboratories. All three of us 
have been part of the ecosystem within DOD for 50 years, and we 
have been within the ecosystem of the DHS from the day it was 
founded. So the real issue here is, how can we bring this to a 
more strategic plane, how can these other agencies have a bit 
more insight into what our capabilities are and our sustainment 
of those capabilities, so that they can make rational 
decisions.
    Senator Nelson. Dr. Hommert?
    Dr. Hommert. Yes, Mr. Chairman. I would just add to what my 
two colleagues have said. In my laboratory, we probably have 
the largest portfolio of work with other Federal agencies. To 
me, it is a very great example of win-win. For us to execute 
the nuclear weapons mission, you need a set of capabilities 
that we sustain over time. That means recruiting new talent, 
sustaining their competence, developing their competence. There 
is just no way to really do that practically without broadening 
that work. They also bring back skills that they learn on other 
problems that benefit the weapons program.
    A very practical example. The radar engineers at my 
laboratory today designing the B61-12 radar 5 years ago were 
working on things that were deployed in theater that supported 
our warfighter, very unique applications. That is, in my view, 
a really synergistic value for our taxpayers in the investments 
you are making for us to accomplish our core mission.
    Senator Nelson. Thank you.
    We have already explored the problems and the challenges 
with funding. Is it true and my understanding is correct that 
unless something is done, additional funding, you cannot meet 
the expectations that we have in place for modernization of the 
weapons in accordance with what our expectations are for the 
New START treaty? Dr. McMillan? If I have not stated the 
question properly, would you state it for me?
    Dr. McMillan. Let me try answering and see if I come close 
to the question.
    On the B61 LEP, if we have stable, predictable funding, as 
we have laid out in what we call the 6.2A study, I believe we 
are positioned to deliver on that system by 2019.
    Senator Nelson. Stable funding is what you are talking 
about.
    Dr. McMillan. Stable funding is a very big deal at the 
levels that we have laid out. Unpredictability makes it very 
difficult for us.
    I am much more concerned in the areas of the W78 and the 
W88 because the delay in CMRR directly affects our plans there. 
As I mentioned earlier, we are working today with both DOD and 
DOE to develop a plan forward for the 78 and the 88 systems. So 
we do not yet have that plan, and until we have it, I cannot 
really answer your question.
    Furthermore, there is a body of technical work--and I 
mentioned some of this in my written testimony--associated with 
pit reuse that we are working on with experiments coming this 
summer that could say that strategy looks like it is worth 
pursuing or that strategy may have serious problems. So there 
is a body of technical work that will have to be done. I think, 
in fact, it will stretch over about 5 years.
    So I am not sure that answers your question, Mr. Chairman. 
I hope it comes close.
    Senator Nelson. Dr. Albright?
    Dr. Albright. Let me first echo what Dr. McMillan said, 
that certainly in the near-term with some additional technical 
risk, we can execute, we believe, the LEPs that are over the 
near-term. But I will again reemphasize there is some technical 
risk associated with that.
    My larger concern is not so much what happens next year or 
the year after that. It is what happens 5 or 10 years from now. 
If we do not continue to sustain funding of the overall effort, 
particularly in the areas of understanding the science of 
nuclear weapons, both experimentally and analytically, we run a 
huge risk ultimately in our ability to continue to do 
assessments and to conduct future LEPs. I think it is worth 
noting that there are LEPs on the books, on the schedule today, 
where the people executing them will have been trained by 
people who themselves have never conducted a nuclear test or 
designed a nuclear weapon from scratch.
    So this idea that we have to continue to sustain the 
overall program--it is not just about LEPs, but the overall 
program--to assure that we have a workforce that is qualified 
to do these LEPs as they come up and is qualified to understand 
when an issue shows up during surveillance whether it is a 
minor problem or a major problem, that is where I worry, that 
over time, that sustained level of effort will be under huge 
pressures.
    Senator Nelson. Dr. Hommert?
    Dr. Hommert. Mr. Chairman, I think your question was very 
well-articulated. Let me emphasize an area of concern that I 
have, and that is on the B61. When we changed the schedule from 
2017 to 2019, which I understood and agreed, we did, however, 
exhaust the schedule margin that we had. The 2019 schedule is 
important for real technical reasons which we would discuss in 
a closed session. So that is putting a challenge to us overall 
as an enterprise, including Congress, that we have the 
consistent multiyear funding that is required. If we have 
significant breaks due to a continuing resolution or other 
changes that might occur that you all understand far better 
than I, that is going to put that schedule in a significant 
risk position. So I think that this is a near-term test for our 
national commitment to modernization in executing the B61-12.
    Beyond that, I do believe that we can craft a plan to take 
the larger scope of our deterrent forward, but I would agree 
with what Dr. McMillan said, that that will involve some 
increased risk because of where we are at in our overall 
production capabilities.
    Thank you.
    Senator Nelson. Senator Vitter?
    Senator Vitter. Yes, Mr. Chairman, if I can just try to 
clarify the same point because I think it is our big core 
concern. I do not mean to try to dumb down this question too 
much for our sake, but let me ask it in a very sort of real-
world way.
    On a scale of 0 to 10, how would you have described your 
comfort level, your level of confidence, with the plan overall 
in December 2010 based on the updated 1251 report, based on all 
of the commitments that were made at that time, and compared to 
that number, how would you peg your confidence level, your 
comfort level today?
    Dr. Hommert. Since I am the one whose signature is on that 
2010 letter, let me start. I never thought of it in quite those 
terms, Senator, but I would say that--it is hard, but let me 
try and use your scale.
    I would say back then if everything that we anticipated--
and recognize we did not have the detailed costing yet on some 
of these programs, but if we assumed that the costing was in 
alignment with what we expected in the 1251--and that 
confidence was probably 8, just down from technical issues we 
knew we would have to deal with, budget realities, and budget 
uncertainties.
    If you look today, for my case, since my lab is so much on 
the hook with respect to the B61-12, I have confidence in what 
we have costed to execute that work and the plan we have laid 
out. We know exactly, I think, what we have to accomplish. If 
budgeted, I am at a 9 or 10 in our ability to do that.
    When I look at the entirety of the modernization, then I am 
back at a lower level of confidence, 5 or 6, because we have 
not adjusted a plan to some of the boundary conditions that you 
articulated earlier and changes of funding and production 
capability.
    I hope that is not too complicated an answer, but I do look 
at a near-term and long-term perspective of where I sit today.
    Dr. Albright. If you look at the situation that existed in 
2010, the program that was in place in 2010 was adequately 
funded, given what we understood about the costs. At that 
point, you would have to give it something like a 9 or a 10. 
That was a pretty robust program.
    Two things, of course, changed: the costs went up and the 
budgets came down. One of the impacts of that budget, as we 
have all pointed out, has been some additional technical risk 
which drives you down to--I hate to put a number on these 
things, but a 6 or a 7 or a 5 or something in that ballpark 
because we have not done the work yet to know whether or not we 
can actually overcome some of those technical issues.
    Senator Vitter. Okay.
    Dr. McMillan?
    Dr. McMillan. Your scale is, of course, difficult to use 
but I will try anyway. It is interesting that we all are 
falling in the same range.
    I was involved in the weapons program in 2010. So while my 
name is not on the document, I certainly had discussions about 
it.
    I would say if 10 is a slam dunk, we know we can do it, the 
risks are very low, we were not there, but somewhere around an 
8 or a 9 is probably right.
    My reasons today for saying something more in the range of 
a 6 are that I see higher risks in our path forward. As I said 
in an earlier answer, and I am very concerned about the long-
term because I see the pressures of doing things in the here 
and now, which we have to do--I fully agree--possibly shifting 
the balance so far that we then increase the risk in the 
future. So those are the reasons why I would back off today.
    Senator Vitter. Thank you, Mr. Chairman.
    Senator Nelson. Thank you, Senator Vitter.
    We are all talking about how we are able to do more with 
less and how we can be more cost-effective in delivering the 
required mission expectations. Let me turn to what some 
perceive as at least one way to streamline oversight and move 
away from transactional oversight and at the same time save 
funding because that is a critical piece as well. If current 
oversight is getting in the way, that is not cost-effective. If 
we can find a way to streamline it, perhaps we can save funding 
in the process and also increase productivity by reducing the 
size of the NNSA's site offices that oversee the laboratories. 
It seems to me that now that the weapons design laboratories 
are operated by for-profit entities, that the site offices do 
feel obliged as civil servants to grade the approximately $200 
million in fee that is awarded to the operators of the three 
design laboratories.
    Now, I know that we are all interested in the savings. Let 
me start with you first, Dr. McMillan. Do you believe that the 
local site offices can be streamlined so that the oversight is 
not transactional, that it is more on the basis of trust and 
verified, to use an often used expression, the verification 
being operational as opposed to transactional?
    Dr. McMillan. I think you have hit on really the key point 
there, Mr. Chairman, that the amount of oversight depends on 
what type of oversight you do. At some level, for the kinds of 
oversight we have today, it is probably the case the site 
offices are sized in the right ball park to provide that kind 
of oversight.
    Senator Nelson. Let me interrupt just for a second. How 
many positions are there at the local site?
    Dr. McMillan. At Los Alamos, it is a bit over 100.
    So if we go to a different model for that oversight, I 
believe we could have smaller contingents both at the site, as 
well as possibly at headquarters. The scale of the organization 
is determined by what it has to do, in my view.
    Senator Nelson. Is there a potential of cost savings by not 
having--not just in terms of the personnel costs of the local 
site offices, but of the costs associated with having to 
respond to the oversight?
    Dr. McMillan. Yes. At the laboratory, I do not know for 
sure what the numbers are, but I know that I have people whose 
main job is responding to oversight issues. If we were able, in 
the way that our National Academies' colleagues have talked 
about, to change that model, I believe there would be 
efficiencies inside the laboratory as well.
    Senator Nelson. I am going to get to our experts here in a 
second too.
    Dr. Albright, how many are there located in your local 
site?
    Dr. Albright. I do not think I have the exact number, but 
there are roughly over 100 Feds and about 20 or 30 support 
contractors. It is about 130 people all together.
    Just two points. First, the site offices are part of the 
oversight infrastructure in NNSA and DOE, but they are not the 
entire story.
    Senator Nelson. Under any set of circumstances, you might 
have fewer if they are doing a different kind of oversight.
    Dr. Albright. I think to echo the point that Dr. McMillan 
made, you would have to ask yourself--so right now we have a 
transactional oversight model where everything is reviewed, 
everything is very hands-on. We have well over 1,000 audits 
that occur every year. If, on the other hand, you migrate to 
what the National Academies have been talking about, which is 
more of a set standards than audit model, then I think you have 
to ask yourself the question: what do I actually need to have 
physically located at the site in order to accomplish that?
    This is for comparison sake. I would point out that if you 
look at the way DOD does this at a place like Hopkins, APL, or 
Lincoln Lab, the numbers of people they have are--you can count 
on the fingers of one hand or two, and they have a relatively 
small office in the Office of the Secretary of Defense that 
periodically conducts audits and does all the things that they 
need to do, safety audits, that sort of thing. So again, the 
question comes up what do you actually have to have physically 
on site. That is one point.
    The other point again is that you have people--it is not 
just the site offices. In a lot of ways, they are responding to 
commands that come from headquarters. So you have a fairly 
large infrastructure, for example, Health, Safety, and Security 
Office within DOE. There are hundreds of people there. Then 
there are equivalent activities within NNSA itself.
    Senator Nelson. Dr. Hommert?
    Dr. Hommert. We have a similar size site office, order, 100 
as well.
    I can use this one metric. I think we all have a 
performance evaluation plan that we do. It is a contractual 
statement of performance on a yearly basis with NNSA. That 
document is, in our case, 60 to 65 pages of fairly detailed 
evaluation of performance against at, again, a somewhat 
overused term today, ``transactional'' level. We have talked 
with NNSA about this, about moving that to a higher level to 
something leaner but still demanding upon our performance. I 
believe that that will allow cost savings on both sides of the 
equation very definitely. It will not happen overnight. We did 
not get to this position overnight, but it would allow us to 
change the direction of that, and I am encouraged that the 
dialogue is happening in that direction.
    Senator Nelson. Dr. Shank and Dr. Patel, I know you have 
stated that streamlining the operations could save costs if 
there could be another way of doing it apart from a 
transactional analysis and oversight. Dr. Shank, what kinds of 
recommendations would you make to streamline the process, to 
change it so that you get the kind of oversight that is 
required that is cost-effective?
    Dr. Shank. I think if we are going to have the number of 
people we have in the site offices, we are going to have the 
current model. Unless we change the oversight model, we are not 
going to see change. Then there is a chance to have a sharply 
reduced number of people.
    I think that just counting the number of people in the site 
offices is not correct. I think what was represented here by 
Dr. McMillan was he has people in his own lab each feeding each 
of these people in the site offices. It is also correct there 
is a large group of people in the Forrestal Building that also 
create work for all the people to do.
    We have to fundamentally rethink about how we can do 
oversight cost effectively. There is always an argument to be 
made if we just spend a little more money, we can be a little 
more safe or a little more this or a little more that. At some 
point, that last increment of cost gives us a very little for a 
great deal of money. I think there is a chance for substantial 
operational savings if we take a different model, and the way 
to look for models that will work--their description was two 
other laboratories that do things differently, do not have the 
huge overhang of people doing oversight. We can also look to 
industry for those models.
    I would say that in order to qualify a system, it is going 
to require some investment. I believe that over a period of 
time, a very short period of time, you would then get to reap 
the rewards of that and begin to wind the thing down into a 
more rational, understandable way that industry or other 
Federal FFRDCs would look--DOE would look similar to them. I 
think that we would have organizations within the laboratories 
also right-sized to be able to deal with a cost-effective 
approach.
    Senator Nelson. Is it fair to say that the uniqueness of 
the labs does not drive the unique method of oversight, that 
other labs have a different standard of oversight, different 
methodology of oversight that works? Can you describe, for 
example, in other labs where you have outside sources coming in 
and checking out and inspecting for safety or security or the 
like?
    Dr. Shank. I think the example was given by Dr. Hommert 
that his laboratory, Mesa Laboratory, looks very much like an 
Intel Laboratory down the street. They have very similar safety 
records. The expenditure on the safety is much, much higher at 
the Mesa facility than it is at Intel. I think we can learn a 
great deal by looking at how Intel does this, and they do it in 
a way in which is done standard in industry. You have a system. 
You audit that system. You keep track of where you are. It 
takes fewer people to do that if there is a system in place 
that you can recognize. Intel simply could not be in business 
if they did the level of transactional oversight that has been 
done in these laboratories.
    Senator Nelson. Who would go to the Intel Laboratory to 
check out for worker safety?
    Dr. Shank. The Occupational Safety and Health 
Administration (OSHA). Other agencies that do these kinds of 
oversight for industry seem to me to be some of the ideal skill 
base, maybe even the exact people, to do that kind of thing at 
the laboratories. In the past, having external oversight has 
been investigated. It is one of those things that is very 
difficult. There are many different issues one way or another 
whether to do that.
    I personally believe if the laboratories look like other 
institutions, they are better off because the people like OSHA 
who are investigating the laboratories do that in a way that 
would be most cost-effective. Industries have to operate. The 
laboratories have to operate. There is not an individual power 
base that says we do this, this, one kind of thing here 
regardless of cost. OSHA has the burden of making organizations 
safe, the safety and health of the workers, but it also has to 
do that in a way that it is actually possible to comply with 
cost-effectively.
    Senator Nelson. Dr. Patel?
    Dr. Patel. I think almost everything that needs to be said 
has been said. But let me comment on two things.
    Having the transactional oversight adds cost by having too 
many people both at site offices plus in the laboratories plus 
at NNSA. So that is one part of the cost.
    The second part of the cost, which is hidden cost that is 
incurred by the laboratory because that oversight gets in the 
way of getting people to do the right things at the right time 
at the right cost. What we will accomplish if we change from a 
transactional oversight to a systems-based oversight is that we 
will empower the laboratory directors and empower the people 
who are there to deliver the right product at the right price.
    Senator Nelson. Now I will ask the directors. Are you 
comfortable inviting OSHA into your operations versus having 
the site offices doing a similar sort of thing? There are 
probably other areas of oversight other than, let us say, 
worker safety or overall safety. Would there be, as in the case 
of any other lab, available outside inspection teams or 
agencies capable of doing the similar work? Dr. McMillan?
    Dr. McMillan. It is interesting that we are having this 
discussion today because just yesterday, as part of a 
discussion with DOE and NNSA, the issue of OSHA was on the 
table. I do not know enough at this point, Senator, to be able 
to answer your question definitively. I would say that I am 
optimistic because industry makes it work. Other laboratories 
make it work.
    Senator Nelson. That is what I was going to say. If 
industry makes it work with other laboratories and if what they 
are looking for is similar to what they would be looking for 
within your laboratories, perhaps the one difference is 
nuclear?
    Dr. McMillan. That might be an area where we would treat 
that differently because that is not a normal part of most 
industries. It is different also than what happens in the 
nuclear power industry. So I think there may be some exceptions 
but I would say overall I am optimistic with a recommendation 
such as our National Academies' colleagues have suggested, in 
part because it puts the laboratories on a level playing field.
    Senator Nelson. Dr. Albright? You do not have to agree.
    Dr. Albright. No, no, no. It is hard not to agree.
    Let me just give you some information on that. Just in the 
environmental safety and health area, we have reviews that are 
conducted by the DOE Health, Safety, and Security Office, the 
NNSA Safety and Health Office, the Defense Nuclear Facilities 
Safety Board. We have two people on site, 22 environmental 
safety and health functional managers at our site office with 
staff, and then there are 30 annual reviews by State and local 
governments. We actually are in California, so we have Cal-OSHO 
which is more stringent than OSHA. Then, of course, we do our 
biannual reviews and International Standards Organization (ISO) 
14001 and 1801 as well. So what you see is a lot of overlap, a 
lot of duplicative effort. We would be delighted to fit within 
the OSHA regulatory framework along with the safety culture 
that you get with the ISO standards.
    Senator Nelson. Dr. Hommert?
    Dr. Hommert. Yes. I will make two comments in this regard.
    First of all, I think it is important to recognize that 
there is a difference from industry for us. These are 
government-owned facilities. So there is a very clear and 
appropriate role for effective government oversight.
    What I do believe, though, is that we have a vast body of 
industry standards that we can work against and that then the 
government can utilize and benefit from the fact that that is 
largely in place whether it is ISO or it is OSHA or other 
standards and construction or the like. I think getting that 
model right that says, yes, there is a reason that the 
government has to look at facilities they own but let us take 
advantage of what is already in place.
    The second thing I would like to say on this is, that as 
Dr. Albright has identified, while we deal with a model that 
has duplication in it--and that is true and we deal with a 
model that, I think, can be improved from a cost-effective 
standpoint, and I agree that that is true--the thing that 
concerns me the most in what we operate in today is that I 
actually believe the complexity of the model impedes the 
ability for me to advance the safety culture or the overall 
operational culture of my organization. While we have an 
outstanding safety record, we can be better. I believe the 
complexities of what we operate actually impede our ability to 
move to a higher level. In the end, since these are my 
coworkers, I care deeply about them. That is probably the 
strongest motivation I have to say, can we do something 
different.
    Senator Nelson. Would it not be appropriate to expect NNSA 
to establish what the standard is to begin with, as in the case 
of the other nongovernmental laboratories? So if you do not 
have a standard, what do you measure it against? So if the 
standard is established, then others can come and measure 
against that or against their own standards which might even be 
higher. Is that fair, Dr. Hommert?
    Dr. Hommert. I agree, Mr. Chairman. There has to be 
clarity. Again, the government has to be clear on what their 
expectations are and how they wish us to be measured. But 
again, there is a lot available for them to take advantage of. 
Then they have to find a way to verify and appropriately audit 
that in a way and ultimately trust that we will operate at the 
system level against those standards. I agree.
    Senator Nelson. Dr. McMillan?
    Dr. McMillan. Yes, I agree.
    Senator Nelson. Dr. Albright?
    Dr. Albright. I agree.
    Senator Nelson. To other panelists here, from your own 
experience looking at other laboratories, a simple question. 
Does it work having these other entities come in and measure 
against standards?
    Dr. Shank. I have actually looked at that with respect to a 
lab that I used to manage compared to the Jet Propulsion 
Laboratory, and they have a more effective process than what we 
had then at DOE which is similar to what NNSA--it is actually 
more difficult today than in my days. But yes, they do have 
effective not only oversight of health and safety, but you also 
have financial oversight and there are systems for that and 
systems for oversight of human resources. There are, in fact, 
standards for all of these operational activities in 
laboratories that are standard throughout industry that could 
be brought in.
    The worry that I would have is that we bring those 
standards in and keep all the site offices and all there 
together. That is my nightmare. I think that if you make a 
different model, it has to be clear that it is a different 
model. You do not have both models.
    Senator Nelson. Dr. Patel, do you agree with that?
    Dr. Patel. Yes, I agree with that. Even though my 
experience has been limited to private industry, I can 
wholeheartedly say that having standards which are accepted by 
others being your guiding principles helps everybody.
    Senator Nelson. Thank you. That is all the questions I 
have.
    Now, what question did I not ask that I should have? I know 
what I know. I do not know what I do not know.
    Thank you all for being here today, for being 
straightforward and candid in your remarks. We appreciate it 
very much. As we work toward finding some solutions here, your 
input is going to be extremely helpful. Thank you. We are 
adjourned.
    [Whereupon, at 4:11 p.m., the subcommittee adjourned.]

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