[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                          [H.A.S.C. No. 114-136]

                       DEFERRED MAINTENANCE IN THE

         NUCLEAR SECURITY ENTERPRISE: SAFETY AND MISSION RISKS

                               __________

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON STRATEGIC FORCES

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                           SEPTEMBER 7, 2016

                                     
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                    SUBCOMMITTEE ON STRATEGIC FORCES

                     MIKE ROGERS, Alabama, Chairman

TRENT FRANKS, Arizona                JIM COOPER, Tennessee
DOUG LAMBORN, Colorado, Vice Chair   LORETTA SANCHEZ, California
MIKE COFFMAN, Colorado               RICK LARSEN, Washington
MO BROOKS, Alabama                   JOHN GARAMENDI, California
JIM BRIDENSTINE, Oklahoma            BRAD ASHFORD, Nebraska
J. RANDY FORBES, Virginia            PETE AGUILAR, California
ROB BISHOP, Utah                     (Vacancy)
MICHAEL R. TURNER, Ohio
JOHN FLEMING, Louisiana
                 Drew Walter, Professional Staff Member
                         Leonor Tomero, Counsel
                           Mike Gancio, Clerk
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Cooper, Hon. Jim, a Representative from Tennessee, Ranking 
  Member, Subcommittee on Strategic Forces.......................     3
Rogers, Hon. Mike, a Representative from Alabama, Chairman, 
  Subcommittee on Strategic Forces...............................     1

                               WITNESSES

Klotz, Lt Gen Frank G., USAF (Ret.), Administrator, National 
  Nuclear Security Administration, accompanied by James 
  McConnell, Associate Administrator for Safety, Infrastructure, 
  and Operations, National Nuclear Security Administration.......    16
McMillan, Dr. Charles F., Laboratory Director, Los Alamos 
  National Laboratory............................................     5
Ricciardelli, John, President, Honeywell Federal Manufacturing & 
  Technologies, LLC..............................................     6
Smith, Morgan, President and Chief Executive Officer, 
  Consolidated Nuclear Security, LLC.............................     4

                                APPENDIX

Prepared Statements:

    Cooper, Hon. Jim.............................................    36
    Klotz, Lt Gen Frank G........................................    67
    McMillan, Dr. Charles F......................................    48
    Ricciardelli, John...........................................    59
    Rogers, Hon. Mike............................................    33
    Smith, Morgan................................................    37

Documents Submitted for the Record:

    NNSA slide displayed by Mr. Rogers...........................    79
    Secretary of Energy letter to the Director of the Office of 
      Management and Budget......................................    80

Witness Responses to Questions Asked During the Hearing:

    Mr. Cooper...................................................    87
    Mr. Garamendi................................................    87

Questions Submitted by Members Post Hearing:

    Mr. Cooper...................................................   104
    Mr. Larsen...................................................   106
    Mr. Rogers...................................................    91
    
.  
  DEFERRED MAINTENANCE IN THE NUCLEAR SECURITY ENTERPRISE: SAFETY AND 
                             MISSION RISKS

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                          Subcommittee on Strategic Forces,
                      Washington, DC, Wednesday, September 7, 2016.
    The subcommittee met, pursuant to call, at 3:29 p.m., in 
room 2118, Rayburn House Office Building, Hon. Mike Rogers 
(chairman of the subcommittee) presiding.

 OPENING STATEMENT OF HON. MIKE ROGERS, A REPRESENTATIVE FROM 
      ALABAMA, CHAIRMAN, SUBCOMMITTEE ON STRATEGIC FORCES

    Mr. Rogers. I will call this hearing of the Strategic 
Forces Subcommittee of the House Armed Services Committee to 
order. And welcome all of our witnesses on this hearing titled 
``Deferred Maintenance in the Nuclear Security Enterprise: 
Safety and Mission Risks.''
    To kick off the hearing, I want to display a slide provided 
by NNSA [National Nuclear Security Administration] that 
encapsulates the challenges that we are dealing with here 
today.
    [The slide referred to can be found in the Appendix on page 
79.]
    Mr. Rogers. The enterprise has a $3.7 billion backlog of 
deferred maintenance it has accumulated over decades, and this 
backlog is now actively threatening both NNSA's mission and the 
safety of its workers. As this slide puts it so well, quote, 
``Infrastructure risks become safety and program risks,'' close 
quote.
    This slide also shows some very real impacts that 
infrastructure failures are having. Ranking Member Cooper and I 
have seen much of this firsthand during our oversight visits to 
these facilities. Just a small list of the challenges that we 
have seen include tarps hung over sensitive diagnostic 
equipment to prevent a leaking roof from destroying equipment 
worth tens of millions of dollars, chunks of concrete falling 
from ceilings into operational workspaces, tape and plastic 
sheeting around pipes carrying radioactive fluids, major 
hydraulic oil leaks, grass growing through floors.
    As this slide describes, many of these failures result 
directly in program delays and safety risks. Our witnesses 
highlight this in their written statements. For example, here 
in General Klotz's statement, quote: ``Our infrastructure is 
extensive, complex, and in many critical areas, several decades 
old. More than half of NNSA's approximately 6,000 real property 
assets are over 40 years old, and nearly 30 percent date back 
to the Manhattan Project era. Many of the enterprise's critical 
utility, safety, and support systems are failing at an 
increasing and unpredictable rate, which poses both 
programmatic and safety risk,'' close quote.
    And here is Mr. Smith, quote: ``Many key facilities at both 
[Pantex and Y-12] were constructed in the 1940s and were 
intended to operate for as little as one decade. Many 
facilities and their supporting infrastructure have exceeded or 
far exceeded their expected life, and major systems within the 
facilities are beginning to fail,'' close quote.
    And finally, Dr. McMillan, quote: ``One of the things that 
keeps me up at night is the realization that essential 
capabilities are held at risk by the possibility of such 
failures; in many cases, our enterprise has a single point of 
failure,'' close quote.
    Of course, these infrastructure challenges directly impact 
NNSA's readiness to respond to new direction and military 
requirements. Broader defense readiness challenges have been a 
focus this year of the HASC [House Armed Services Committee], 
and readiness and responsiveness within NNSA has been a focus 
of this subcommittee for years. We must ensure not only that 
people and tools within the NNSA are ready to respond, but also 
infrastructure.
    On the readiness of people and tools front, this committee 
has continued to advocate the stockpile readiness program 
mandated by last year's NDAA [National Defense Authorization 
Act]. On the infrastructure front, we continue to authorize 
substantial increases to NNSA's infrastructure accounts. But I 
believe more must be done. We need to be looking to do more, 
including both tried and true solutions that have worked in the 
past as well as new innovative solutions.
    For instance, the Facilities and Infrastructure 
Recapitalization Program, or FIRP, was a 10-year, $2 billion 
effort that started in 2002 and was successful in addressing 
many of the deferred maintenance challenges. But in the end, it 
accompanied only a portion of the work that ultimately needs to 
be done. I think we should be looking for a new FIRP-like 
program for the future.
    We should also recognize the success of recent public-
private partnerships in addressing these challenges in 
innovative ways. The result out at Kansas City, in particular, 
is indicative of what we can do if we work together and use 
these kinds of creative approaches.
    I want to thank our witnesses for being here. You represent 
and lead many of the workers within our Nation's nuclear 
enterprise. We know how hard they work and are grateful to all 
of you for your service to our country.
    Our first panel includes Dr. Charlie McMillan, laboratory 
director at Los Alamos National Lab; Mr. John Ricciardelli, 
president, Honeywell Federal Manufacturing & Technologies; Mr. 
Morgan Smith, president and CEO [chief executive officer] of 
Consolidated Nuclear Security.
    Following these gentlemen in our second panel of witnesses 
we will also have the Honorable Frank Klotz, Administrator of 
the NNSA, Mr. Jim McConnell, Associate Administrator for 
Safety, Infrastructure, and Operations, NNSA.
    My sources tell me that today it is General Klotz's 
birthday, so happy birthday to General Klotz. I would sing to 
him, but that is pretty bad punishment, so I won't do that.
    Finally, I want to highlight the important work being done 
by the witnesses from both our panels. Under the leadership and 
direction of Secretary Moniz and General Klotz, you all have 
put a halt to the growth of deferred maintenance, and that is 
to be commended.
    You recognize that these challenges have a direct impact on 
your workers' morale, performance, and safety, and I know you 
are working hard to deliver for all of them. The subcommittee 
stands by to assist and support you because we recognize how 
much more needs to be done.
    I now turn it over to my friend and colleague from 
Tennessee, the ranking member, for any opening statement he may 
have. Roll Tide.
    [The prepared statement of Mr. Rogers can be found in the 
Appendix on page 33.]

STATEMENT OF HON. JIM COOPER, A REPRESENTATIVE FROM TENNESSEE, 
        RANKING MEMBER, SUBCOMMITTEE ON STRATEGIC FORCES

    Mr. Cooper. I was hoping you would dispense without any 
football references, but there at the end you completely blew 
it.
    I too would like to welcome the witnesses, and I would like 
to ask unanimous consent that my statement be inserted for the 
record.
    Mr. Rogers. Without objection.
    Mr. Cooper. I think the chairman has stated it very well, 
so I will not belabor the point. We need to get adequate 
maintenance to all these facilities. It is my impression that 
Naval Reactors on the whole has done a better job than NNSA. I 
am not faulting Admiral Klotz because I think he and Secretary 
Moniz are part of the solution, not part of the problem, but it 
is going to take many years of sustained effort to solve this 
problem.
    I thank the witnesses. I look forward to your testimony.
    [The prepared statement of Mr. Cooper can be found in the 
Appendix on page 36.]
    Mr. Rogers. I thank the gentleman.
    Also, we are going to be interrupted for votes during this 
hearing. So what I would ask is that--your entire statement is 
going to be submitted for the record--if you could just take 3 
minutes instead of 5 to summarize, so we could try to get both 
panels done without delaying everybody. But we will, without 
objection, accept all of your full statements into the record.
    I also want to point out that during your testimony when 
you are making your summary, we are going to be putting up 
slides to kind of complement what you are talking about, slides 
that you all have provided about your testimony. You don't have 
to feel the need to narrate the slides. It is just something we 
are going to be doing concurrent with your comments.
    [The slides referred to are retained in the subcommittee 
files and can be viewed upon request.]
    Mr. Rogers. And with that, we will go to the first 
panelist. Mr. Smith, you are recognized for 3 minutes.

   STATEMENT OF MORGAN SMITH, PRESIDENT AND CHIEF EXECUTIVE 
          OFFICER, CONSOLIDATED NUCLEAR SECURITY, LLC

    Mr. Smith. Chairman Rogers, Ranking Member Cooper, members 
of the subcommittee, thank you for the opportunity to talk with 
you today about the deferred maintenance challenge facing both 
the National Nuclear Security Administration and, more 
importantly in my case, the plants that I represent, the Pantex 
Plant and Y-12.
    I appreciate the support of the committee and the support 
of Congress over the years of our sites and really appreciate 
the attention you are bringing to this very, very important 
matter. The quiet but important work that we do at our sites is 
essential to our Nation and our allies. For me, it is a 
privilege to work alongside the Federal and contractor patriots 
that do this work in support of our important mission. However, 
our facilities have not been immune from the progress of time 
and the effects of that time, similar to other infrastructure 
in the country.
    Sustaining the facilities while continuing to achieve our 
mission is a considerable challenge. Attracting and retaining a 
world-class workforce is also a challenge. The Nation 
ultimately would benefit from a better long-term approach.
    Between Pantex and Y-12, we have approximately $800 million 
in deferred maintenance currently in our books. Approximately 
$175 million of that is associated with critical facilities. At 
today's level of funding, we will not be able to make a 
substantial reduction in that backlog of deferred maintenance, 
and the pictures that we are seeing are but the tip of the 
iceberg relative to what we face.
    One of the pictures you see is a ceiling deterioration that 
occurred from operations above it. It caused concrete to fall. 
Obviously, in that situation, it leads to both operational and 
personnel concerns. We have been able to repair the condition 
relative to the ceiling itself; however, we remain very limited 
and restricted in our operation of that equipment above that 
ceiling.
    While we will not compromise on safety and security, the 
backlog and deterioration that we are seeing does require us to 
deal almost daily with potential disruptions to our mission 
delivery.
    However, we do not sit idly by allowing obsolescence to 
occur with our systems. Along with eliminating excess and 
deteriorating facilities, we are embarking on the largest set 
of capital construction projects that we have had for both 
sites in decades. We also use public-private partnerships as we 
have opportunities such as recently occurred with the 
administrative support complex of Pantex. And then finally, we 
are our preserving our currently operated facilities through 
innovative approaches and new technologies.
    In conclusion, I believe our overall future approach must 
continue to, number one, provide for a robust recapitalization 
program; number two, pursue aggressive disposition of our 
excess facilities; and number three, reduce deferred 
maintenance issues through additional funding approaches. Each 
are essential to preserve the mission work that occurs at both 
sites; they are essential to ensure the safety of our 
workforce; and they are essential to help keep Pantex and Y-12 
on track to provide a safe, secure, and effective nuclear 
deterrent for the Nation.
    Again, thank you for the opportunity to speak with you 
today.
    [The prepared statement of Mr. Smith can be found in the 
Appendix on page 37.]
    Mr. Rogers. Thank you, Mr. Smith.
    Dr. McMillan is recognized for 3 minutes.

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

    Dr. McMillan. Chairman Rogers, Ranking Member Cooper, 
members of the committee, thank you for the invitation. I am 
Dr. Charlie McMillan. I am the director of the Los Alamos 
National Laboratory.
    We have recently marked the 20th anniversary of the 
Stockpile Stewardship Program. This program has allowed the 
National Nuclear Security Administration's laboratories to 
certify this Nation's nuclear deterrent that it is safe, 
secure, and effective.
    Our stewardship efforts would not have been possible 
without the strong support for significant investments in 
infrastructure from this subcommittee, Congress, and many 
administrations. Stockpile stewardship required the 
construction of new supercomputers, new experimental 
facilities, and these have helped the United States assure our 
allies and deter our adversaries.
    However, key elements of today's nuclear weapons 
infrastructure were designed and constructed during the Cold 
War. Because it is more difficult today to bring new facilities 
online, we must continue to operate existing facilities longer 
than we had anticipated when they were originally built. And we 
have to do that and ensure that we do not place our workers, 
the public, or our mission at unacceptable risks.
    Just last week, I was discussing these issues with my 
colleagues at Sandia and at Livermore, and we all shared the 
concern that some of our critical facilities are being run to 
failure. Because infrastructure funding is a finite resource, I 
believe that upgrades for replacement activities have to be 
taken with a very sharp focus on the economics.
    To this end, staff at Los Alamos, working with our NNSA 
partners, have developed a modular strategy for bringing new 
infrastructure online. We believe that this will help both with 
the economics as well as with timely delivery when facilities 
are needed.
    These types of facilities, together with those associated 
with things like high-performance computing, our uranium 
facilities, and experimental facilities are all facilities that 
warrant and merit the greatest congressional focus.
    In your invitation, Mr. Chairman, you ask about things we 
might do to improve infrastructure. There are three things I 
would like to highlight for you.
    First of all, there is a category referred to as general 
plant projects. These allow us to use relatively small amounts 
of money focused locally to be able to address issues.
    I would highlight for you that at Los Alamos today we have 
trailers that were put into service 30 years ago. And in some 
of those trailers we have problems with ceilings, water damage, 
falling in, we have problems with rodents in them. They need to 
be replaced.
    Over the last 10 years, we have been able to cut the number 
in half. We still have a long way to go. General plant projects 
let us do this. And I would recommend to you considering to 
index that money. It was last changed in 2009.
    Second, third-party financing. You mentioned that in your 
opening remarks. This is particularly important for my 
colleagues at Livermore and Sandia.
    Finally, innovative public-private partnerships. Today at 
Los Alamos we are working closely with our NNSA field office to 
be able to bring some of these projects online. We would like 
to be able to do that.
    Thank you for the invitation to speak today.
    [The prepared statement of Dr. McMillan can be found in the 
Appendix on page 48.]
    Mr. Rogers. Thank you, Dr. McMillan.
    We have been called for votes. We have 7 minutes to get 
across the street. So we are going to suspend the hearing while 
we go and vote. We should be back in almost exactly 60 minutes. 
So I apologize for the inconvenience, but they don't ask me 
when to call us for votes.
    With that, we will recess briefly.
    [Recess.]
    Mr. Rogers. I call this hearing back to order.
    Mr. Ricciardelli, I know you have been anxiously 
anticipating this. The floor is yours.

 STATEMENT OF JOHN RICCIARDELLI, PRESIDENT, HONEYWELL FEDERAL 
               MANUFACTURING & TECHNOLOGIES, LLC

    Mr. Ricciardelli. Thank you, Chairman Rogers, Ranking 
Member Cooper, and members of the subcommittee, for inviting me 
to testify before you today. I am John Ricciardelli, and I am 
the president of Honeywell's Federal Manufacturing & 
Technologies, which has a proud history of serving as the prime 
contractor to the Department of Energy's Kansas City National 
Security Campus [KCNSC] for nearly 70 years.
    The KCNSC is a 1.5 million square foot multimission 
engineering and manufacturing facility that supports the NNSA's 
national security mission. Our primary focus is modernization 
of the Nation's nuclear stockpile using the latest technologies 
to deliver a safe, secure, and reliable nuclear deterrent.
    It is an exciting and challenging time in the nuclear 
security enterprise with several life extension programs being 
addressed through their development phases simultaneously. Our 
facility is witnessing growth this year to support these 
important objectives.
    And while it is an exciting time at the KCNSC, we have had 
similar challenges to my colleagues next to me. About 10 years 
ago, we were faced with increasing pressure on defense budgets 
and growing deferred maintenance costs at Kansas City's aging 
facility. Honeywell was challenged to help the Federal 
Government continue its mission in the most cost-effective way 
possible.
    The aging infrastructure at the Bannister location made 
installation of modern equipment difficult, expensive, and 
hazardous to the mission as well as the personnel. Further, 
significant time and money was being spent on emergency repairs 
and facility upgrades for the emerging programs.
    Honeywell implemented a responsive infrastructure strategy 
to address these challenges. As a result, we now have a newly 
constructed state-of-the-art facility that features a flexible 
manufacturing design and 50 percent lower energy consumption, 
and we are also delivering over $150 million of savings to the 
taxpayers annually.
    Today, we are more agile in adapting to changing mission 
requirements. We are better positioned to recruit and retain 
the next generation of scientists and engineers. Safety hazards 
have been greatly reduced at the new facility as well, as 
evidenced by our safety performance. And, in fact, we just 
celebrated 3 million hours without a lost-time injury.
    The new campus utilized a third-party lease agreement for 
several reasons. The annual lease costs of the new facility 
were much more economical than the annual maintenance costs of 
the old building. A private developer was used and was able to 
build it more efficiently, assemble tax credits and financing. 
And finally, the campus can be used for other purpose if the 
government no longer needs it or if the government can buy it 
at any point for fair market value.
    While Honeywell used commercial best practices to deliver 
on the responsive infrastructure strategy, I would also like to 
elaborate on the importance of contractor oversight reform and 
how that has played an important role in the successful 
operation.
    Today, Honeywell and NNSA created the Kansas City 
Governance Model, a revolutionary reform of government 
oversight that reorients how Americans see performance in the 
government. The shift overall reduces costs without sacrificing 
public trust and utilizes a simpler governance model that 
capitalizes on private sector enterprise.
    To apply this model at other sites, the NNSA's operating 
partners must do what Honeywell does daily: focus on getting 
results in a sustainable way while eliminating costs. We are 
committed to assisting the transformation through ongoing 
collaboration and best-practice sharing with our NNSA site 
partners.
    However, our work is not done yet. NNSA continues its 
effort to ensure that the old Bannister property be redeveloped 
in an efficient, safe, and environmentally responsible manner 
and not be left as a blight on the community. By funding the 
transfer of the Bannister facility in fiscal year 2017, the 
government will eliminate most of the future environmental 
liabilities through third-party demolition and remediation and 
could save approximately $650 million.
    So once again, thank you, Mr. Chairman, for allowing me to 
address this committee. We are all connected through a shared 
goal of keeping our great Nation safe and secure.
    [The prepared statement of Mr. Ricciardelli can be found in 
the Appendix on page 59.]
    Mr. Rogers. Thank you. And I thank all the witnesses for 
their opening statements. I know it takes a lot of time to 
prepare for this, and I appreciate that.
    I will start off by recognizing myself for questions.
    You all heard my opening statement and some of the things, 
the infrastructure challenges that I described throughout your 
facilities. Ranking Member Cooper and I, as you know, have 
visited several of these facilities and seen some pretty 
shocking examples of the problems that you face in these very 
highly secure facilities.
    But I would like for each of you, if you could, to take a 
moment and describe for me in detail some of the infrastructure 
failures that you have seen and the consequences they have for 
your facility.
    We will start with you, Mr. Smith.
    Mr. Smith. One of the pictures that you had up that I noted 
in my opening remarks was the ceiling failure that occurred as 
a result of Kathene leakage from Kathabars above, which the 
impact of that is the Kathene eats away the reinforcing bars, 
which greatly weakens the floor.
    At this point, we can only allow two people into that area 
where you have tons and tons of equipment at a time to do any 
work, and it is just a systematic failure. But when that 
equipment goes down, we have no ability then to go process the 
materials in that particular facility because that facility 
requires a very, very dry environment to safely and 
appropriately process the materials.
    So that is one example. Another example on the same site, I 
was at work not more than about a month ago on a Sunday 
morning, and I had just left to go to church with the intent to 
come back when I received a page that one of my utility 
workers, doing a rather routine task over a pit--and this pit 
was basically grating over top of it with end supports on each 
end and a center beam in the middle, and as she was doing that 
work, the structural steel holding up the grating on one end 
failed. And as you can imagine, you are on the wrong end of the 
seesaw at that point and you go down.
    In that case, fortunately, she sustained only a very minor 
injury, which I think was a grace-of-God moment in that case, 
but a very real facility issue with a person just doing a 
routine job.
    I had another one of those a couple months before that 
where a forklift drove onto what looked to be a pad. It was 
actually an extension of a basement. The structural steel in 
that area due to environmental attack over the years, salt and 
so forth that you use for the weather conditions, had led to 
that structural steel failing to the point where we had a 
collapse and a buckling of the concrete or a depression in the 
concrete and a failure of the structure, but not something that 
led to an injury as well.
    At Pantex, we deal with fire lead-ins to our bays and 
cells. We are on a major replacement program that will take 
another 10 years. But when they fail, and they fail without 
warning, you can lose bays or cells. We recently had one where 
we lost a number of bays and cells and the ability to use it 
until we can go in and do the repair. And that just leads to an 
inherent unreliable condition and set of services.
    And I can probably go on, but that is probably sufficient. 
Give others time to comment.
    Mr. Rogers. Yes.
    Dr. McMillan.
    Dr. McMillan. Mr. Chairman, let me just give you an example 
from last weekend. We had the air conditioning system in one of 
our vaults for one of our classified computers fail, and when 
that went down it took down the computing equipment that is 
needed to support our experimental work. That is a recent 
example.
    Let me say a few things about things we are acting on, but 
they illustrate the problem. Both we and our colleagues at 
Lawrence Livermore Laboratory are replacing major parts of our 
electrical infrastructure. Same kind of problem. If we have 
electrical failures, our computers go down, the work that we do 
to support the stockpile we can't do. Our accelerators go down 
if we don't have power.
    Third area, again, that we are taking action on, but it is 
overdue: The steam plant for the laboratory is finally on the 
verge of replacement, good public-private partnership on that 
one. But if we lose our heating systems in the wintertime, it 
is cold in Los Alamos. And sensitive scientific equipment does 
not do well when it freezes, nor do our buildings.
    And so those are the kinds of things that they are very 
fundamental infrastructure issues, they don't have high 
profile, but if we don't take care of those kinds of really 
basic things, we are not going to be able to serve the mission. 
And it affects, as my colleague said, not only the mission but 
also the safety of the people.
    I would offer as a final comment, when I talk to my craft 
people, the folks who have their hands on things like our 
electrical and our plumbing systems, one of the problems that 
they are dealing with day in and day out is how old these 
systems are. So if they were working on a modern strip mall, 
things would be uniform. When they go into one of my switch 
gears, they are dealing with stuff that was built in 1960, and 
they have to figure out how to make it work. And not only is 
that a maintenance problem, it is a safety problem.
    Thank you.
    Mr. Rogers. Mr. Ricciardelli.
    Mr. Ricciardelli. We are lucky because in the new facility, 
obviously, we don't have the same issues as my colleagues. But 
as you saw from the pictures, the Bannister facility, which we 
are still maintaining, even to this day, has about 45 people 
there that are just maintaining the HVAC [heating, ventilation, 
and air conditioning] system, the electrical systems, all of 
the infrastructure that still has to be kept up.
    And you can imagine back many years ago with that kind of 
aging system, with 6,000 people working that facility, how 
hazardous it was at that point.
    So with the new facility, we actually have 10 percent of 
our lease goes into maintaining the facility, and that will 
ensure that deferred maintenance will never be a problem. But, 
again, once we get the funding we can get rid of the Bannister 
and take care of a lot of that issue that we are still dealing 
with even to this day.
    Mr. Rogers. Okay. You all heard me make reference to the 
fact that there is across the NNSA $3.7 billion in deferred 
maintenance. Let me ask this question. At the pace that you 
have been addressing deferred maintenance--and this will be 
really for Mr. Smith and Dr. McMillan--at the pace you have 
been addressing deferred maintenance over the last 5 years, 
when will you ever or will you ever be able to catch up and 
have completed the deferred maintenance obligation that you 
have before you?
    Mr. Smith.
    Mr. Smith. Mr. Chairman, we have had success in reducing it 
over time. I believe that there are several points that need to 
be taken into consideration when you answer that question. One 
is we have to continue to retire the old facilities and tear 
them down. That is one of the ways that we reduce the deferred 
maintenance. The next is continue to find innovative ways to do 
it, use tools like BUILDER.
    But in the end I would say, absent additional funding and 
given the trajectory we are on, we will never reduce it to 
zero, as you would envision it, because some of these systems 
just have to be replaced in the end.
    Mr. Rogers. Dr. McMillan.
    Dr. McMillan. Mr. Chairman, as I look at the list that we 
have at Los Alamos, there are a couple of things I would note. 
One, we have been working very closely with the NNSA to better 
estimate what the numbers are. And I think within a year or so 
we will be in a better position to give you updated numbers. 
And I look forward to what Frank Klotz has to say on that, 
because I know he is very aware of the work we are doing.
    As I look at the list at Los Alamos, there are several big 
items that when we are able to actually take them off the list, 
as my colleague said, they will make substantial reductions. A 
good example of that is the chemistry and material research 
facility. When we are finally able to retire that system and 
then take the building completely down, that will take down a 
big chunk. Similarly, I mentioned earlier our steam plant, 
another big chunk when we can get that done.
    And for most of the work that we have, we have plans in 
place and we are off working on those plans. My estimate is 
that it is roughly a decade of work to work that off, assuming, 
of course, we continue to get stable funding and we are able to 
spend it. So it is on the order of a decade.
    Mr. Rogers. At the clip that you have been addressing this 
issue you think in a decade you will have addressed all the 
issues that are on your current list. What about the issues 
that are arising over the next decade?
    Dr. McMillan. That depends again on funding, Mr. Chairman.
    Mr. Rogers. That is the whole point. My argument is this: 
You are never going to resolve these deferred maintenance 
issues at the pace we have been addressing them. That is how we 
got this $3.7 billion backlog. It is not going to happen. You 
are being overly optimistic if you think that we are going to 
be able to address this.
    I understand it is your job to be optimistic. It is my job 
to be realistic. And I am very frustrated. And this is the 
Congress' fault, not yours, that the Congress has not more 
aggressively tried to get ahead of these maintenance issues.
    Dr. McMillan. Well, and if I could look backwards, 
something that has helped over the last decade was the Facility 
and Infrastructure Recapitalization Program, what is called 
FIRP, and you mentioned that in your opening remarks. The big 
deal with that was that it put new dollars on the table.
    Mr. Rogers. Right.
    Dr. McMillan. It was new dollars coming into the 
laboratories and across the whole system. And as those dollars 
came in, we were able to prioritize them, we worked at a 
national level to do those priorities, and that made a 
difference. When the FIRP dollars went up, the deferred 
maintenance came down.
    Mr. Rogers. So those are gone?
    Dr. McMillan. Yeah, they are gone, but there is no magic in 
this. It is dollars.
    Mr. Rogers. I completely agree.
    With that, I yield to the ranking member for any questions 
he may have.
    Mr. Cooper. Thank you, Mr. Chairman.
    Mr. Smith, did I hear in your testimony the word 
``caffeine'' when you talked about the collapsed roof?
    Mr. Smith. Yes, sir.
    Mr. Cooper. So caffeine from above dripped down and 
weakened the structural steel and the concrete?
    Mr. Smith. Yes, sir.
    Mr. Cooper. Whence did this caffeine come?
    Mr. Smith. It comes out of the Kathabar system. It is a 
dehumidification system that is used to treat and control the 
atmosphere in that particular facility. And over the years, 
leakage occurred, various conditions set that up. This goes 
back quite a period of time ago.
    Mr. Cooper. So this isn't caffeine like coffee?
    Mr. Smith. No, sir. It is a specific fluid used for 
purposes of dehumidification.
---------------------------------------------------------------------------
     The specific fluid is Kathene, not caffeine.
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    Mr. Cooper. Presumably, massive amounts of caffeine?
    Mr. Smith. Yes, there are big units.
    Mr. Cooper. Was this leak of industrial caffeine not 
detected?
    Mr. Smith. I honestly could not tell you exactly what 
happened years and years ago when it occurred. I really don't 
have that history. I just know the consequence of what 
happened.
    Mr. Cooper. Second type of question, and it may be for Mr. 
Ricciardelli more than for anyone else. You mentioned in the 
lease agreement a 10 percent set-aside for future maintenance. 
I am almost wondering if it is budgeting malpractice in 
Congress if for any new project we do not set aside funding for 
future maintenance, because everything has to be maintained. 
And if we have funding for capital projects without that future 
maintenance, then we are blinding ourselves to the obvious.
    Mr. Ricciardelli. It is one of the benefits of the private-
public agreement that we have in there. Not only did we reduce 
the cost of operation from $120 million a year down to $60 
million a year, we got rid of $238 million worth of deferred 
maintenance that was left at the Bannister plant. And, in fact, 
all the maintenance is now done by the developer, and they set 
aside 10 percent of our lease payment to make sure that over 
the 20 years that they continue to maintain the facility at the 
current conditions.
    Mr. Cooper. I know that is specific to your lease 
agreement, but in any budget, you could set aside money. I 
think sometimes it is called a sinking fund or amortization. 
There are various ways of describing it. But when we just 
appropriate money for a project and think that is it, we are 
generally leery of cost overruns and construction of the 
project, but we have given little thought to the maintenance 
needs that are likely to happen, in fact, inevitably going to 
happen in the future.
    Right now, we are repairing the Capitol dome for the third 
or fourth time in American history, and we will probably need 
to do that again in the next 30 or 40 years. It is just one of 
those inevitable things.
    Mr. Ricciardelli. And I think if you use good project 
management, planning the move from the old facility to the new 
facility will demonstrate that you could actually do it ahead 
of schedule and under cost. We did it for about $18 million 
less than we thought we would spend. And, again, that could be 
used for some of that deferment or for the maintenance in the 
future as well.
    Mr. Cooper. Mr. Smith and I were just in Oak Ridge for the 
uranium processing facility, one of the early steps there, a $6 
billion facility. So have we set aside money for the 
maintenance of that?
    Mr. Smith. At this point, I am unaware that we have, sir. 
But I need to take that as a takeaway and go do some reflection 
on that.
    [The information referred to can be found in the Appendix 
on page 87.]
    Mr. Cooper. Might be a good idea, at least for your 
successor's successor's successors.
    Mr. Smith. Yes, sir.
    Mr. Cooper. Thank you, Mr. Chairman.
    Mr. Rogers. I thank the gentleman. Don't you find it 
interesting that in the public-private partnerships we require 
them to set aside money for deferred maintenance but yet we 
don't do it in our own budgeted project items? You are right, 
it is malfeasance.
    Mr. Cooper. Hello----
    Mr. Rogers. The gentleman from California, Mr. Garamendi, 
is recognized for 5 minutes.
    Mr. Garamendi. Thank you. I am trying to catch up. My 
apologies for not being here earlier today. I am missing some 
of the opening statements, so I will try to play catch-up here.
    It appears as though we are looking at specific facilities 
on these campuses. And I am curious what the overall program is 
for the totality of the campus. I noticed that there are 
certain buildings that have been replaced, the Kansas City 
facility, for example, some public-private partnerships at Y-
12, all of which seem to work good. I am familiar with some of 
the things that have gone on at Livermore.
    Do we have an overall plan on what needs to be done in the 
various facilities? The chemistry building at Los Alamos, 
obviously, in play here, but there is also the plutonium 
facility and the like. Yes, we know there is a problem. We can 
look at pictures as well as anybody else. But what is the 
overall program. Let's just take Los Alamos, since you happen 
to be here, Dr. McMillan, and share with me and the rest of us 
what needs to be done in the various facilities and then the 
associated cost.
    Dr. McMillan. So, yes, we have a 10-year site plan that we 
look across all of the facilities on the site, not just 
individual ones, as you have rightly recognized, Congressman. 
Let me talk a little bit about some of the things that emerged 
from that plan that I think can help address your question.
    As I mentioned in my testimony, we are hiring approximately 
a third of our 10,000-person workforce over the next 5 years. A 
consequence of that is that we need space for uncleared 
employees first. And then as they get their clearances, which 
is a time-consuming process right now, we need space to be able 
to convert that space into cleared space so that they can do 
classified work in that space.
    So in our 5-year site plan, we have taken that kind of 
progression into account to ensure that we will be able to have 
the people that the Nation needs, and that as they are cleared, 
they have spaces to work in.
    As we look at our oldest facilities, we are using our 
overhead money to retire some of the oldest facilities. And 
then what we are often doing is taking shells--so the concrete 
is still in pretty good shape for many of our buildings--and 
then we are putting in new air conditioning systems, new 
plumbing systems, new air handling systems for being able to do 
light lab space.
    So we are trying to do things as efficiently as we can to 
provide the space for our workers. But we have a 10-year site 
plan and then we work down that plan.
    Mr. Garamendi. I assume you have made that information 
available to this committee?
    Dr. McMillan. We have made it available to NNSA. We can 
certainly make it available to the committee if you would like 
to see it, yes.
    Mr. Garamendi. Yeah. I, for one, would like to see the 
overall plan that you have.
    [The information referred to can be found in the Appendix 
on page 87.]
    Mr. Garamendi. You did raise an interesting question--I 
assume there is a very good answer to it--and that is the--
actually, you seem to be having to double the space as new 
people come in and then clearance?
    Dr. McMillan. No.
    Mr. Garamendi. Did I misunderstand you?
    Dr. McMillan. No, we aren't doubling the space. We need 
space that is initially available for people without 
clearances.
    Mr. Garamendi. So that is separate from the----
    Dr. McMillan. From the cleared space, but that we can then 
convert into cleared space so that we will be able to have 
them--we are not doubling the space, absolutely not. We can't 
afford to.
    Mr. Garamendi. That caught my attention.
    Dr. McMillan. Yeah, no, we can't afford to.
    Mr. Garamendi. So you recycle it and use it as secured 
space later.
    Dr. McMillan. Absolutely. And then we can convert it into 
secured space. Because, no, we can't afford to double space. 
There is no way.
    Mr. Garamendi. That is, I am sure, true.
    You know that I have got problems with this, the size of 
the plutonium facility, and that is another question. I know 
that there was some question about whether it really needs to 
be rebuilt or not, whether you can repurpose it, as you just 
described, with those other facilities that have good concrete. 
And so I would like to see more detail about that.
    The other question, and this goes to Mr. Ricciardelli. You 
talked about the reduction in operating cost. Could you 
describe why that happened?
    Mr. Ricciardelli. So our operating cost in an old facility 
at Bannister, just keeping ahead of operations, was about $120 
million a year. Through the private-public relationship with 
the developer, we basically built a $653 million facility, and 
we agreed to a lease rate of $60 million a year for 20 years.
    Mr. Garamendi. And they are responsible for the maintenance 
and upkeep during that 20-year period?
    Mr. Ricciardelli. They are responsible for all of the 
maintenance. The only thing that we maintain in the building is 
the capital equipment. But all the facilities, all the 
infrastructure, the parking lots, the landscaping, everything 
is done by the developer.
    Mr. Garamendi. That is another question--I have got 10 
seconds. No, I have no seconds.
    I yield back. Thank you.
    Mr. Rogers. I wanted to follow up with Mr. Ricciardelli and 
Mr. Smith.
    At both your sites you have had successful public-private 
partnerships to deal with some of your infrastructure 
challenges. Can you tell us a little bit about why those were 
successful and just describe what else you think we could use 
that model to address?
    I will start with you, Mr. Smith.
    Mr. Smith. I believe they have been successful because it 
is an opportunity to essentially gain access to a significantly 
sized facility that enables us to house our workers and 
accomplish the mission in space that, again, will be maintained 
through that lease arrangement so it does not deplete your 
resources on the site and it enables you to get out of much 
older facilities that have legacy-deferred maintenance issues 
on it. And thus far, we have been able to find developers who 
are very interested in doing it. They like working with our 
sites, and they give us very favorable rates for those leases.
    Mr. Rogers. Is there another infrastructure challenge that 
you face that you think that would be a good model for us to 
use to address it?
    Mr. Smith. There are a number of areas that we need to look 
at. One of the alternatives being looked at for a new lithium 
facility would be a public-private partnership. That would 
impact Y-12. You need to find facilities that you could 
repurpose as the lessor someday to other use. Engineering 
development could be an aspect of that. Warehousing can be an 
aspect of that. There may be a number of things. It somewhat 
depends on where you need be relative to the security fence as 
well.
    Mr. Rogers. Okay.
    Mr. Ricciardelli.
    Mr. Ricciardelli. Yes, sir. I think the private developer 
has the ability to bring in the funds that the government 
doesn't have access to. So in our case, they went through 
private bond financing, they got local tax incentives from the 
municipal areas as well. And they were able to get money to 
fund these programs. And again over 20 years it will be a 
profitable program for them and they were willing to invest in 
that.
    I think in order to replicate it, to your point, we are 
going to probably have to look at some of the rules that limits 
the amount of private building on public lands, because in 
order to recapitalize it, in our case it is on public land, 
private land, and they can take it over if we decide to vacate 
it and turn it into an engineering or a manufacturing source.
    So I think in order to replicate it at some of the sites 
that are owned by the government, we may have to look at some 
of the rules that limit the ability to bring in private 
developers.
    Mr. Rogers. Lastly, Dr. McMillan, I know you have talked 
about the--not today, but previously--your challenges in 
replacing your workforce, and it has been a monumental effort 
as baby boomers start to retire. Talk a little bit about the 
impact of these infrastructure challenges on the people you are 
trying to recruit into your workforce and the kind of people 
you are having to compete with, briefly.
    Dr. McMillan. Yeah. Thank you, Mr. Chairman.
    As I mentioned in my oral testimony, we are hiring 
approximately a third of the laboratory.
    Mr. Rogers. Which is how many people?
    Dr. McMillan. It will be about 3,000 people. The total 
laboratory today there are about 10,000 people at work today. 
And we are having to put many of those people into what is 
unquestionably substandard space. I mentioned problems with 
ceilings. We have had ceilings fall in in some of our trailers. 
Fortunately, no safety problems. We take care of that.
    Mr. Rogers. What kind of candidates are we talking about?
    Dr. McMillan. We are talking about Ph.D.s, Mr. Chairman. 
Ph.D.s, master's students.
    Mr. Rogers. Engineering?
    Dr. McMillan. These are people in physics, engineering, 
chemistry, hard sciences.
    Mr. Rogers. What is the reaction you get when you bring 
those people in and show them where they will be working?
    Dr. McMillan. I have had some of them to my house for 
dinner, and they are appalled. When their comparison is what is 
happening in Silicon Valley, we aren't even in the same league. 
Now, maybe we shouldn't be in the same league with Silicon 
Valley, but at least it ought to be a safe and--let me say it 
this way: We are hiring the next generation of the stewards of 
the stockpile today. That is what we are doing. We need space 
that is worthy of their service to the country.
    Mr. Rogers. Well, and we need them to be able to come and 
work for us. That is my concern, is that if you bring in these 
people who have a lot of options, they are well educated and in 
high-demand careers, I think it demonstrates we don't value 
them, their work, if we are going to put them in a building 
that has got grass growing through the cement floor.
    Dr. McMillan. That is right. It needs to be worthy of their 
service to the country.
    Mr. Rogers. Yeah.
    With that, I yield to the ranking member for any additional 
questions he may have.
    Mr. Cooper. I have no more questions, Mr. Chairman.
    Mr. Rogers. The gentleman from California.
    Mr. Garamendi. Once we get those documents about your 
overall plan, there won't be any questions.
    Mr. Rogers. With that, I will tell the panelists, we thank 
you for your testimony, your presence here today, and we will 
adjourn this panel and bring in the second panel.
    Mr. Ricciardelli. Thank you.
    Dr. McMillan. Thank you.
    Mr. Rogers. All right. We will call the second panel to 
order and recognize our witnesses, General Frank Klotz, 
Administrator of NNSA.
    Happy birthday.
    General Klotz. Thank you, sir.
    Mr. Rogers. And Mr. Jim McConnell, Associate Administrator 
for Safety, Infrastructure, and Operations at NNSA.
    And I understand that only General Klotz has an opening 
statement for the record. So you are recognized to summarize 
your statement.

STATEMENT OF LT GEN FRANK G. KLOTZ, USAF (RET.), ADMINISTRATOR, 
NATIONAL NUCLEAR SECURITY ADMINISTRATION, ACCOMPANIED BY JAMES 
McCONNELL, ASSOCIATE ADMINISTRATOR FOR SAFETY, INFRASTRUCTURE, 
    AND OPERATIONS, NATIONAL NUCLEAR SECURITY ADMINISTRATION

    General Klotz. Okay. Thank you, Mr. Chairman. And I hope 
because it is my birthday you will indulge me. I take great 
pride in starting on time and ending on time, but I may take an 
extra minute or two in the opening statement.
    Mr. Rogers. If you want extra time, go ahead.
    General Klotz. Thank you, sir.
    Chairman Rogers, Ranking Member Cooper, members of the 
subcommittee, thank you for the opportunity to discuss the 
challenges and the steps taken by the Department of Energy's 
National Nuclear Security Administration to address deferred 
maintenance and the risks associated with aging infrastructure.
    I am pleased today to be joined, as you said, by Jim 
McConnell, who is NNSA's Associate Administrator for Safety, 
Infrastructure, and Operations, a new position, by the way, 
that we have created in the past 2 years specifically to focus 
like a laser beam on these issues.
    Let me emphasize at the outset that the success of the 
Nation's nuclear security enterprise and its workforce depends 
upon safe, reliable, and modern infrastructure at our 
laboratories and at our production plants.
    Although the role of nuclear weapons in our national 
security strategy is widely understood and enjoys broad 
bipartisan support, the link between nuclear deterrence and the 
infrastructure that supports it is less well appreciated.
    While much has been accomplished over the past two decades 
to construct the new experimental facilities and high-
performance computing capabilities required to certify annually 
the nuclear weapons stockpile without nuclear explosive 
testing, investment in infrastructure has generally not kept 
pace with the growing need to replace Cold War-era facilities.
    I can think of no greater risk to NNSA's multiple and vital 
missions than the current state of our aging infrastructure. We 
are long overdue to build a modern, safe complex that will meet 
military requirements, keep the deterrent safe, secure, and 
effective, and enhance worker and public safety.
    At the end of fiscal year 2015, as you have already pointed 
out, Mr. Chairman, the backlog of deferred maintenance at NNSA 
sites totaled approximately $3.7 billion. As one of his major 
management initiatives, Secretary of Energy Moniz directed that 
the infrastructure investment across all of the Department of 
Energy, including the NNSA, be requested at levels sufficient 
to halt the growth of deferred maintenance starting in fiscal 
year 2016.
    Accordingly, NNSA's fiscal year 2016 budget request, 
subsequently supported by this Congress, will halt the growth 
of deferred maintenance in the current fiscal year, and NNSA's 
fiscal year 2017 budget request, plus this committee's mark, if 
similarly supported by the full Congress, will actually begin 
to decrease the backlog in NNSA's deferred maintenance in the 
coming fiscal year.
    I would like to highlight a few of the steps NNSA is 
currently taking to reduce deferred maintenance. Now, these are 
described in greater detail in our written statement.
    But in sum, first, we are increasing funds for 
recapitalization and maintenance efforts. Second, we are also 
deploying innovative, best-in-government project management 
tools to make risk-informed investment decisions to reduce 
deferred maintenance. Third, we are prioritizing 
recapitalization projects with deferred maintenance reduction 
as a key criterion. Fourth, we are increasing buying power by 
expanding efforts to strategically procure common building 
systems across the enterprise, such as roofs and HVAC systems. 
Fifth, in close consultation with this subcommittee, we are 
completing a site condition review of the physical security 
systems at all NNSA facilities to develop a security refresh 
strategy over a 10-year period. And six, we continue to make 
progress in disposing of excess facilities.
    On that front, the administration's fiscal year 2017 budget 
request includes $200 million to dispose of the 3 million 
square foot Bannister Federal Complex in Kansas City that you 
have already discussed in the previous panel. The plan for this 
project, which involves transferring the property to a private 
redeveloper, will save the taxpayer as much as $500 million 
when compared to the government's cost to complete the 
decommissioning if we were to do it directly. Congress has 
supported this effort, and it is vitally important that the 
full funding be available in early 2017 to execute this project 
as planned.
    Finally, NNSA is recapitalizing its infrastructure using 
traditional line item capital construction projects as well as 
a number of innovative approaches. You have already heard about 
one of those. Again, the Kansas City National Security Campus, 
which we dedicated in 2014.
    This magnificent facility allowed us to move out of the 
antiquated Bannister Federal Complex, cut our footprint in 
Kansas City in half from 3 million square feet to 1.5 million 
square feet, enhance the productivity and morale of our 
workforce, and reduce operating and maintenance costs, as you 
heard, by $100 million per year. Significantly, the new 
facility was constructed by a private developer using third-
party financing made available to the NNSA through a GSA 
[General Services Administration] lease.
    And just last month, NNSA broke ground on the 
administrative support complex at Pantex, which also uses an 
alternative financing approach. This project will allow roughly 
1,000 employees to move out of 1950s-era buildings into a 
modern, energy-efficient workspace. It will also eliminate 
approximately $20 million in deferred maintenance at Pantex.
    We strongly believe the greater use of such approaches to 
recapitalizing our aging infrastructure should continue to be 
explored.
    Although we have made important progress in tackling 
deferred maintenance and recapitalizing our infrastructure at 
all of our sites, a great deal of work, in my opinion, still 
remains to be done. The strategy, the plans, the processes, and 
many of the tools for arresting the growth of deferred 
maintenance, disposing of unneeded facilities, and improving 
infrastructure management are in place.
    At the end of the day, however, it ultimately comes down to 
the level of resources made available, and I would submit now 
is the time to invest in them and for the years to come.
    With that, I look forward to answering any questions you 
and the subcommittee may have.
    [The prepared statement of General Klotz can be found in 
the Appendix on page 67.]
    Mr. Rogers. Thank you for that. I think that we can't help 
but take note of--you said a lot of important things, but one 
particular statement, and that is that there is no greater risk 
to our nuclear enterprise than this deferred maintenance. To 
ignore that, I think, would constitute congressional 
malfeasance. And I appreciate your candor in making that 
statement.
    One question I asked the panelists before you was, at the 
pace that we have been taking deferred maintenance dollars and 
putting them against this challenge, do you believe that we 
will ever be able to get ahead of the maintenance issues that 
face the NNSA?
    General Klotz. Let me be perfectly honest about this. I 
spent a number of years, as you know, in the military, and 
every year you operate under a set, relatively constrained 
budget. That budget may go up a few percentage points as a 
result of inflation or new missions, but for the most part, it 
is a fairly stable amount of funding that you get unless you 
are in a crisis or some other emergency.
    Right now, the NNSA has a lot of very, very important 
missions, whether it is life extension programs, stockpile 
stewardship, or our programs to reduce nuclear dangers around 
the world, Naval Reactors. So within that particular set of 
missions that we have to do, there is not a lot of additional 
funding to spend on deferred maintenance.
    The experience I had in the military was the first dollar 
always goes to the mission, to the pointy end of the spear; the 
next dollar goes to the people who have to employ that spear; 
and then, if there is money left over, then it goes into 
infrastructure and deferred maintenance.
    And every year commanders would make the decision: I have 
to pay for mission, I have to pay for people, I will take risk 
this year on deferred maintenance or recapitalization and hope 
that I get additional money next year. And then 1 year becomes 
2 years, becomes 5 years, becomes 10 years.
    So I think absent some dedicated resources for dealing with 
the deferred maintenance process, we are going to be able to do 
some of the things that we have done under Secretary Moniz's 
leadership to sort of halt the growth, but to really turn it 
around and make a huge dent in it is going to require 
investment over a long period of time specifically devoted to 
this.
    Mr. Rogers. So at the pace we have been meeting that 
challenge, will we ever accomplish it without additional money?
    General Klotz. In my opinion, sir, no.
    Mr. Rogers. General Klotz, we have discussed the topic of 
this hearing many times in the past, and I want to thank you 
and Secretary Moniz for your engagement and personal leadership 
on this issue. I think we are getting traction now, but we both 
know we need a lot more to do.
    To that end, how can we all ensure that regardless of who 
the next President is, the attention, focus, and funding needed 
for NNSA's infrastructure and deferred maintenance challenges 
continue into the next administration?
    General Klotz. Well, thank you. That is, I think, an 
extraordinarily important question. I think there is a general 
consensus within the Department of Energy [DOE], including the 
professional civil service, who will continue to work through 
any transition in NNSA, and as you heard, from our M&O 
[management and operating] partners at the laboratories and the 
production plants, as well as in Congress and in this 
committee, that NNSA's infrastructure presents a risk to our 
strategic deterrent and has to be addressed with some urgency 
and with resources and with focus.
    Now, as I mentioned in introducing or alluding to the fact 
that Jim McConnell was also here, we created a position within 
or an organization within NNSA specifically to deal with that--
we call it the Office of Safety, Infrastructure, and 
Operations--back in January 2015 to make sure that we had the 
focus on this issue. We have also, and Jim can talk about this 
in greater detail, set up a number of processes and tools 
within the NNSA to help us understand, analyze, and keep focus 
on this.
    And then at the broader DOE level, under Secretary Moniz' 
leadership, we have established key groups, again, 
predominantly senior career service professionals, to sustain 
the effort, such as the Laboratory Operations Board, the 
Infrastructure Executive Committee, and others. And Jim, by the 
way, who is a career senior executive in the civil service, is 
a member of all of those groups.
    So I think we have put in place the foundation to continue 
that work as we transition to a new administration and a new 
Congress. And, oh, by the way, one of the first things I will 
tell the transition teams when they come in after the election 
is the importance of keeping a focus on this.
    Mr. Rogers. I appreciate that. I am concerned that as 
Secretary Moniz has outlined in a letter to OMB [Office of 
Management and Budget] last December, which I will introduce 
for the record, NNSA's outyear funding levels are, quote, 
``still only half of the $2.8 billion needed to address 
infrastructure in the future,'' close quote.
    [The letter referred to can be found in the Appendix on 
page 80.]
    Mr. Rogers. How do we ensure that this new administration 
recognizes this shortfall and requests appropriate funding from 
the Congress?
    General Klotz. Well, again, Mr. Chairman, we have laid out, 
both in our internal documents as well as reports that we have 
sent up to the Congress on our infrastructure needs, our 
recapitalization plans, our use of, our ideas on using third-
party financing. I think we have built a good series of 
documents and a case which will be clearly one of those things 
that we pass on to the transition teams as they come in.
    Also, one of the things we do, we also, as you know, every 
year put out the Stockpile Stewardship Management Plan, and we 
have our other plan on countering and preventing and responding 
to nuclear dangers across the world, which also lay out the 
infrastructure that is required to underpin those critical 
missions, and our Naval Reactors folks as well send forward 
similar reports.
    Mr. Rogers. Mr. McConnell, does NNSA have a plan for how to 
tackle this backlog of deferred maintenance, and how much will 
that plan cost us in the near term to make a significant dent 
in this problem?
    Mr. McConnell. Yes, sir, we do. You heard from the first 
panel that on a site-by-site basis we construct something 
called a 10-year site plan, which is an integrated assessment 
of what each site needs to support its part of the mission. As 
you know, there are eight sites that have to come together in 
an integrated whole to satisfy our mission. They go out 10 
years, is about as far as the planning horizon starts to get 
too fuzzy.
    What we have done very recently is create a master asset 
plan, which is five-eighths of the way through development, 
that takes those individual site plans and then brings them up 
and connects them one level higher as an enterprise level to 
make sure that we can balance risk and investment needs not 
only to 10 years, but out to hopefully 25 years at an 
enterprise level so that we can connect the infrastructure 
conditions to its risk posed to the mission and then be able to 
make prioritized investments across the entire enterprise to 
optimize our success and to minimize our risk.
    Now, that gives us an integrated list of what to do when. 
The question of how long it will take gets back to the 
resources applied to it. So as you indicated, and as the 
Administrator indicated, we didn't get into this problem in a 
short amount of time. It will take us time to get out of it. 
But with the concerted resources that the Secretary and the 
Administrator have requested and that thankfully were actually 
exceeded in the last two cycles of appropriations, we will 
start to turn that curve and actually reduce deferred 
maintenance. It will take a long time, two decades, unless 
there is a very significant increase in investment.
    Mr. Rogers. What do you consider a very significant 
increase in investment that would get that clip down to a 
decade earlier?
    Mr. McConnell. The history that we have that we can rely on 
is the 10 years where the Facilities and Infrastructure 
Reinvestment Program, FIRP, was in place. FIRP had at its 
higher points was between $200 million and $300 million a year, 
and that had a noticeable effect.
    Mr. Rogers. Okay. With that, I will recognize the ranking 
member for any questions he may have.
    Mr. Cooper. Thank you, Mr. Chairman.
    First, General Klotz, I apologize for your having to spend 
your birthday this way. If you check, it may be a violation of 
the Geneva Conventions for this to happen.
    I couldn't help but notice in your testimony and in your 
statement the remarkable statement that if Congress comes 
through and provides $200 million this year to close down 
Bannister, that could save the government $500 million. Whoa. 
That is pretty amazing. We should do stuff like this all day 
long.
    But I would ask you, and it may be more appropriate for the 
record, and maybe Mr. McConnell can pitch in here, I think the 
public would be very interested in knowing what causes a $300 
million delta like that. Is the government that inefficient, or 
are these facilities so prehistoric or government regulations 
so cumbersome that just by turning it over to the private 
sector we can save this fantastic amount of money? That is 
significant.
    [The information referred to can be found in the Appendix 
on page 87.]
    Mr. Cooper. It would also be important to see if we could 
do this elsewhere as well, because this is what is sometimes 
called low-hanging fruit. Why not pluck this from the branches 
while it is available?
    Mr. McConnell. Sir, I would be happy to. The unique 
situation of the Bannister Federal Complex just inside the 
Kansas City beltway, it is very valuable from a redevelopment 
perspective. So when we can sell it to this private 
redeveloper, they can develop it purposefully for the next use, 
an industrial use. If we as the Federal Government have to D&D, 
deactivate and decommission the facility, we have to take it to 
standards that would be acceptable for any use, which is a 
cleaner, more intense level of remediation. And so that 
accounts for the significant price difference. The government's 
constraints are a little bit more rigid than the private sector 
would have.
    Mr. Cooper. So we would have to make it, say, playground 
safe for children so they could eat the dirt if they wanted to?
    Mr. McConnell. Yes.
    Mr. Cooper. And you are allowing it to be dirtier for an 
industrial use. So we save $300 million by letting it be more 
polluted.
    Mr. McConnell. Well, to getting it to a point where it 
still meets standards. It will still meet all the standards for 
its purpose. But since the developer will have a specific 
purpose and the government doesn't have any specific purpose 
when it is getting ready to clean it, it is a different 
standard. If we were to repurpose it for our own use, we would 
clean it up to the same standard as this private developer, but 
that is if we were planning to reuse it for an industrial 
activity.
    Mr. Cooper. So government regulations require it to be 
retrofitted for any purpose, including the most stringent, the 
cleanest, and a private developer can just find a use for it 
that could be a landfill or something. It doesn't have to be 
that clean.
    General Klotz. In our discussions with the developer, their 
actual use for it has not come up. That is part of their 
business model.
    Mr. Cooper. I think it is interesting for people to 
understand what causes this incredible arbitrage, you could 
call it, between two types of developers.
    Mr. McConnell. That is the primary difference. There are 
probably others as well.
    Mr. Cooper. Others, yes.
    Anecdotally at least, I have come to the conclusion that 
Naval Reactors has done a better job of maintaining its 
facilities than the others. I don't want to pass final judgment 
on that, but it has led me to the thought that with the 
traditional non-naval military rotation, 2, 3 years in a job, 
move on, that makes it very tempting to leave maintenance 
problems to your successor. It is kind of built in the job 
because as you put it, first is the mission, the pointy end of 
the spear, then the personnel, and then if there is money left 
over, we maintain things.
    But Naval Reactors and the whole Rickover tradition was you 
were there for the long haul, whether it is an 8-year tour now, 
it can be longer. That gives you a much different perspective 
than 2 or 3 years in, 2 or 3 years out sort of point of view.
    So I am also wondering if in addition to the failure for 
Congress to appropriate money for maintenance in some sort of 
sinking fund or amortization or depreciation, that we have a 
structural issue in our military where you are not going to get 
anything else but ignoring maintenance when you are only there 
for 2 or 3 years. It is almost like the old joke about the 
envelope in the drawer for your successor. Why don't we figure 
out a plan at least for these ultrasensitive facilities that 
takes a longer-term perspective.
    General Klotz.
    General Klotz. Thank you very much for that comment. You 
raise a very interesting point. First of all, I am glad to hear 
you say that in your opinion Naval Reactors is doing well in 
this regard because, as you know, we have some responsibility 
for Naval Reactors. The director of Naval Reactors essentially 
wears two hats, one with the Navy and one with the Department 
of Energy, NNSA.
    And they do have their challenges. I have visited most of 
their major facilities, their laboratories, and there are some 
buildings there which, quite frankly, date back to the early 
days of the Cold War, back to the early Rickover era, and are 
in need of replacement. In particular the spent fuel handling 
facility at Idaho where they have a large pool where they bring 
spent naval reactor fuel from aircraft carriers and submarines 
is starting to show some real signs of age and needs to be 
recapitalized, and with the support of Congress we are on the 
track to do that.
    But you raise a good question. In the military and among 
the political appointees, there is a turnover, and I think that 
speaks to the importance of making sure that--or what we have 
tried to do in NNSA and DOE over the last couple years is to 
make sure that we have clearly articulated, defined, and 
written down the roles, responsibilities, authorities, and 
accountability of the various activities that take place within 
the Department of Energy and within the NNSA and then to put in 
place career senior executives who are experienced and experts 
in this particular field so that as transitions take place they 
know what they need to do and they have the authorities and the 
game plan to actually carry those things out.
    So we have worked very, very hard to make sure that is in 
place. It may not be as satisfactory as an 8-year term for the 
head of Naval Reactors or the head of the Navy's Strategic 
Systems Program who also has a longer fixed term, but it is how 
we have tried to address that particular issue.
    Mr. McConnell. If I may add one other aspect. One of the 
challenges that I have seen that has been faced is how to 
balance risk decisions between short-term programmatic needs 
and longer-term infrastructure risk. And one of the things that 
we have done recently in NNSA, over the course of the last 2 or 
3 years, that has been very beneficial both in terms of that 
decision and how to carry this forward, is created a system 
that more objectively analyzes and communicates the risk that 
infrastructure poses to the mission, so that decisionmakers 
like Administrator Klotz and the Secretary have a better 
understanding now than perhaps their predecessors had of what 
the risk tradeoff actually is between the present and the 
future.
    The future was always a little fuzzy, and so the decisions 
tended to favor shorter-term risk at the expense of 
infrastructure. We now have a better way of explaining to the 
Administrator what might happen if we either do or don't invest 
in infrastructure, and that allows for a better risk-informed 
decision which produces a slightly different balance. And I 
think that has resulted in some hard decisions that have 
actually gone to increase investment in infrastructure.
    Mr. Cooper. To put this in a more understandable context 
for average citizens, we had a Treasury Secretary once who said 
that nobody in the history of the world has ever washed a 
rental car, because if you don't think like an owner, you don't 
care, you're not going to keep it clean. And anybody that has 
ever rented an apartment knows that if you don't keep it clean, 
you are going to lose your security deposit. And the landlord 
requires that security deposit because they want a Sword of 
Damocles hanging over your head as an incentive to turn it over 
clean.
    So I wonder in the promotion boards if we are paying 
adequate attention to the state of the facilities that were 
under a command when the commander goes up for a promotion. If 
they leave it in worse shape than they found it, if it is a 
dump, if they didn't push through the Pentagon bureaucracy for 
more money to keep it up, then maybe that should be a black 
mark on their career. Because otherwise it is just too easy, in 
and out 3 years, punch your ticket. Move on.
    Thank you, Mr. Chairman. I think my time has expired.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes the gentleman from California, Mr. 
Garamendi, for 5 minutes.
    Mr. Garamendi. First, Mr. Chairman and Ranking Member, 
thank you for this really important hearing, which we probably 
don't spend enough time on overall in Congress on these kinds 
of things. And it really comes down to, and I am really pleased 
that you brought up this issue of succession and the like. When 
I was over at the Department of Interior some decades ago now, 
there were what we knew as the Weebees. I see Mr. McMillan 
knows what I am talking about. It is the ``we be here when you 
are gone.'' And indeed that is part of the discussion we are 
having here.
    I think that we also are responsible for making choices 
here, and in some respects we have not required the information 
that we need to make the choices, in part because we really 
have two different operations here. We have got the Department 
of Energy, and then we have got the rest of the military with 
the nuclear enterprises on the other side, and the budgets are 
split, the committees are split, and the responsibility is 
also.
    But when taken in totality, the entire nuclear enterprise 
is really dependent upon what goes on here and in NNSA. But you 
don't have the fancy missiles or the stealth bombers and other 
kinds of things that are part of our responsibility. And so I 
think it is important for us to be fully aware of this 
particular issue of not deferred maintenance, but the ability 
of these facilities to function for the purpose of national 
defense. In other words, in this case the bombs themselves.
    And so I need more information, and I would suspect that 
perhaps my colleagues do too. And if you could provide some of 
the information that apparently has been made available from 
the laboratories to NNSA, I would like to see at least a 
synopsis of that in the overall context and really how each of 
these facilities meet the essential, I want to emphasize that, 
the essential role of the totality of the nuclear security 
system.
    General Klotz. Yes, sir, we would be more than happy to 
provide that.
    [The information referred to can be found in the Appendix 
on page 87.]
    Mr. Garamendi. That is a long conversation, and it is, 
frankly, a lot of hard work on at least my part to understand 
how all this fits together, and I will take the time to do 
that. Because one-off, okay, we need a new pit facility. Fine. 
How does that fit into the overall picture of this whole 
maintenance?
    And I think that my colleague here is quite correct about 
the incentives in the system, and we be, we all be gone, or we 
won't. So I think that fits it.
    I am going to let it go at that and look forward to 
additional information.
    Okay. Thank you.
    General Klotz. If I could, sir, I would like to publicly 
thank you for coming over to the Department of Energy and NNSA 
a few weeks ago. A visit of a Member of Congress, as both 
Congressman Rogers and Congressman Cooper know, goes through an 
organization like wildfire, and it is really a boost to the 
morale of the people who do this work and don't often get a lot 
of recognition and appreciation and care for what they do. So 
thank you, sir, for that.
    Mr. Garamendi. The visit was most informative, and I will 
come back whenever there is another opportunity to learn along 
the way. Thank you.
    Mr. Rogers. I thank the gentleman.
    The Chair now recognizes the gentleman from Colorado for 5 
minutes.
    Mr. Lamborn. Thank you, Mr. Chairman. Thanks for having 
this hearing. I want to thank the witnesses for being here.
    I don't have any specific question, but I just want to say 
that I have been to Los Alamos, and I have seen some of the 
buildings right on the fault line. And I have been to Pantex, 
and I have seen some of the decrepit conditions there. And I 
agree with you, some of the deferred maintenance really needs 
to be addressed. And I want to be supportive, working in a 
responsible and effective way, efficient way, to overcome these 
problems. So thanks for highlighting those and for being here 
today.
    And, Mr. Chairman, that is all I have, and I yield back.
    Mr. Rogers. I thank the gentleman.
    Mr. McConnell, can you describe for us some of the various 
approaches you have employed to deal with some of these 
infrastructure challenges? And in particular I am thinking 
about line item construction, public-private partnerships, 
FIRP-like programs, other approaches. Give us some idea about 
what is working, what is not working, and what you would like 
to do.
    Mr. McConnell. Thank you very much.
    First and foremost, as I described a second ago, we start 
with a more objective analytical basis for identifying on an 
asset-by-asset, individual facility basis what each facility's 
contribution or a system's contribution to our mission is. 
Combining that with an appreciation of the condition of that 
facility, how likely it is to fail, we have the ability to 
assess risk on a facility-by-facility basis that gives us a 
rationale for prioritization of what infrastructure investments 
are required.
    At a relatively high level then, we make a decision about 
the totality of the infrastructure investment that is 
appropriate at any given time. And then we get down to the 
nuts-and-bolts level of what is the specific system or facility 
or component that needs to be fixed and decide whether it is a 
maintenance-type activity or a replacement activity or if it is 
a major construction activity. And that is how we then bin into 
the various tools that we have at hand.
    When it comes to major construction, when we have a large 
item that needs to be replaced, tens, hundreds of millions of 
dollars, there is a very rigorous process, as I am sure you are 
well aware, and one of the first steps in that is to do an 
analysis of alternatives. We figure out what all the ways we 
could satisfy the need are and then do an analysis of each 
alternative to figure out which one makes the best sense and 
the best value for the government.
    We go into that, again, very objectively, data driven, 
without the preconceived notions, and then identify which 
alternative works best.
    Two classic recent examples. In Amarillo, for the Pantex 
administrative support complex, we went through that analysis 
and determined that the public-private partnership route was 
the best option and the best value. We have for the Federal 
staff a need for a new facility in Albuquerque, New Mexico. We 
went through the same process. That time the answer that came 
back was normal traditional line item capital construction.
    So we are driven by the data, we are driven by the results 
to pick the option that is best, and it is good to have all of 
those tools in our toolbox because then we can get pretty 
specific on how to optimize our resources and apply them to the 
best way.
    Mr. Rogers. Well, we have heard some examples today from 
Mr. Ricciardelli and Mr. Smith about successful public-private 
partnerships, and it is no secret I am a big proponent of 
public-private partnerships. And you all just had a real 
success, or you started a real success at Amarillo by taking on 
a portion of the deferred maintenance challenge at the Pantex 
complex with a public-private partnership.
    Where else, is there another challenge on deferred 
maintenance that comes to mind where you think a public-private 
partnership would be the right approach?
    Mr. McConnell. As I said, in every time that we need to 
deal with acquiring a new capital asset, we look at all the 
aspects, and public-private partnership, third-party financing 
is always, unless there is some very unique situation, one of 
the alternatives that we----
    Mr. Rogers. But there hasn't been a project that you are 
facing where you have already done that analysis and you have 
decided if we had the money a public-private partnership would 
be the solution?
    General Klotz. There are other areas that we are currently 
working through. I think when we came up and briefed you or had 
a hearing on third-party financing and public-private 
partnerships we mentioned Livermore, two facilities out there.
    There are two laboratories at Livermore, Lawrence Livermore 
Laboratory and Sandia Livermore. They both have projects which 
are designed not so much to deal with deferred maintenance, 
although it will, but they are designed to get at another 
objective that the Congress has and that the DOE and NNSA has, 
and that is to create the opportunity for these labs, which are 
essentially engines of scientific technology and engineering 
innovation, to be able to work better with local industry and 
local universities and colleges in a collaborative space.
    So at Livermore, again at both labs, we are pursuing 
buildings which would allow the scientists from the national 
laboratories there to mix with people from the outside to 
advance innovations in high-performance computing, for example. 
So to us that looks like a good candidate for a public-private 
partnership.
    We have been working very, very closely between the 
headquarters and the two laboratories on this. They have been 
taking very, very careful notes from our experience in getting 
the Pantex deal closed.
    So we are still working the numbers to make sure that we 
can satisfy the requirements of the various OMB circulars, as 
well as the rules that have been put in place by the Congress 
and will be adjudicated by the Congressional Budget Office when 
it comes to scoring.
    Mr. Rogers. Thank you. I appreciate what you have been 
doing, and I want to pledge to you that I am going to do all I 
can to work with the ranking member to help convince our 
colleagues that we need to meet this challenge more 
aggressively because the risk to our nuclear enterprise is 
completely unacceptable at present.
    With that, I will yield to the ranking member. Any closing 
remarks? Has none.
    Gentleman from Colorado?
    With that, I thank you very much for your service to our 
country, and this hearing is adjourned.
    [Whereupon, at 5:47 p.m., the subcommittee was adjourned.]

     
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                           A P P E N D I X

                           September 7, 2016
      
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                           September 7, 2016

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                   DOCUMENTS SUBMITTED FOR THE RECORD

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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                           September 7, 2016

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             RESPONSES TO QUESTIONS SUBMITTED BY MR. COOPER

    Mr. Smith. Any time a project has an extremely long execution phase 
there must be a comprehensive plan for the maintenance of equipment and 
systems prior to the point at which these items are turned over to the 
end users for testing and then production. As part of the UPF project, 
we will budget for and implement plans to perform this execution phase 
maintenance. Once the facility is turned over to Y-12 operations, 
maintenance of UPF will become part of the site's overall maintenance 
program and be covered by other budgeting mechanisms (as the project 
will have completed at that point). To that end, the UPF-generated 
Concept of Operations plan provides guidance and expected staffing 
needs and the UPF-generated maintenance analyses outlines preventative 
maintenance programs and anticipated corrective maintenance needs. 
Those will be combined into anticipated maintenance staffing needs for 
operation that are outside the Future Years Nuclear Security Plan (nine 
years away), but they are being identified for future budgeting that 
will come from the facility's operating funds. However, without 
intentional focus and budgeting, the situation can occur where budget 
tradeoff decisions will lead to less than optimal maintenance of the 
new facility as new facilities do not have a commensurate long-term 
maintenance funding profile in the same manner as they have for new 
construction.   [See page 12.]
    General Klotz and Mr. McConnell. The Fiscal Year (FY) 2017 
President's Budget Request includes $200 million for NNSA to transfer 
the Kansas City Bannister Federal Complex to a private developer for 
demolition, remediation, and redevelopment. The private developer has a 
significant advantage over NNSA in that it can assume responsibility of 
the property and remediate to a specific, industrial end-use. If NNSA 
were to maintain ownership of the property, NNSA would be required to 
return the property to a much higher level of remediation suitable for 
any future use, due to a lack of intended end-use of the property. 
Estimates suggest it would take NNSA more than a decade to achieve this 
more intensive level of remediation and would cost roughly $1 billion. 
Therefore, the estimated savings to the government in transferring the 
property on-time could be as much as $700 million.   [See page 21.]
                                 ______
                                 
           RESPONSES TO QUESTIONS SUBMITTED BY MR. GARAMENDI
    Dr. McMillan. Yes, I would be happy to brief you and your staff on 
our comprehensive infrastructure plans. NNSA has a new process and 
system for development of the Future Years Nuclear Security Plan 
(FYNSP) and that new process should produce a product in the beginning 
of the next calendar year. I would be happy to provide that information 
to you once it has been finalized.   [See page 13.]
    General Klotz. As requested, NNSA is providing copies of the most 
recent Ten-Year Site Plans (TYSP) that were completed in Fiscal Year 
(FY) 2015 by each of NNSA's eight sites. The TYSPs are created by the 
M&O contractor at each of NNSA's eight sites to convey the site's 
current and future infrastructure needs. Starting in FY 2017, the TYSPs 
will be replaced by a new, enterprise-wide, integrated, strategic 
infrastructure planning document called the Master Asset Plan (MAP). 
During Calendar Year 2016, NNSA is conducting Infrastructure Deep Dives 
at each NNSA site. The MAP and Deep Dives identify program 
requirements, infrastructure gaps and risks to meeting those needs, and 
proposed solutions to accomplish the long-term infrastructure vision. 
As of September 30, 2016, six of eight Deep Dives have been completed. 
The final two will be completed by early November. The first MAP is 
scheduled for release in March of 2017 in conjunction with the FY 2018 
President's Budget Request.   [See page 24.]

      
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                           September 7, 2016

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                   QUESTIONS SUBMITTED BY MR. ROGERS

    Mr. Rogers. Please provide the committee unclassified pictures of 
the most significant infrastructure challenges and degradations at your 
sites.
    Mr. Smith. [No answer was available at the time of printing.]
    Mr. Rogers. Please describe the impacts of your sites' 
infrastructure challenges on your ability to attract, retain, and 
motivate workers? What are the impacts to morale?
    Mr. Smith. There's no doubt that attracting and retaining the next 
generation of great workers becomes more challenging in facilities that 
are in a deteriorated state. Our workers experience the infrastructure 
challenges every day and are vigilant in their efforts to perform to 
the highest standards while often working in facilities that are less 
than ideal and are the subject of frequent repairs and outages. 
Furthermore, many of our workers have had life-long careers at the 
sites and for them, keeping the sites going is truly a service to the 
nation with a knowledge of the past difference these sites have made. 
Projects like the Jack Case Center and New Hope Center at Y-12, the 
Highly Enriched Uranium Materials Facility at Y-12, and the 
Administrative Support Complex and the High Explosives Pressing 
Facility at Pantex go a long way toward addressing morale issues, but 
it is no doubt a challenge to recruit top talent while competing 
against industries that can provide better facilities with modern 
safety, security, and work environment amenities. Still, the excitement 
at the groundbreaking for the Pantex Administrative Support Complex in 
August was palpable, and it's very apparent that employees are excited 
to work in a state-of-the-art facility that is commensurate with the 
importance of their jobs to national security.
    Mr. Rogers. If provided increased top-line funding to support it, 
would you favor a new FIRP-like program aimed specifically at dealing 
with deferred maintenance and infrastructure challenges? How would you 
suggest such a program set priorities?
    Mr. Smith. Significant reductions in deferred maintenance will not 
be realized without continued investment strategies. We are actively 
establishing priorities and addressing deferred maintenance to continue 
mission work, but that is not enough. The Facilities and Infrastructure 
Recapitalization Program had a lot of success reducing deferred 
maintenance at Pantex and Y-12, and similar to the FIRP Program, a 
significant additional annual investment above current funding levels 
is required to reduce deferred maintenance at both sites. Until this is 
done, there will be periodic disruptions to mission accomplishment 
while unplanned emergent items are dealt with and impacts on production 
are subsequently addressed through recovery schedules and worker 
overtime whenever possible. Current funding levels presently allow us 
in many areas only to treat the symptoms of age rather than address the 
fundamental degradation. Such a program could set priorities using 
guidelines that are already used at both sites: How essential is a 
given capability for the site. Because of limited funding, we are 
already forced to make very difficult decisions every single day about 
where to devote funding, and examining how essential a given capability 
is helps to prioritize where to spend money. While all capabilities are 
important, certain capabilities are more inextricably linked to mission 
requirements and should be prioritized over other functions, with those 
considered mission critical at the top of the list. Fortunately, along 
with Lawrence Livermore National Laboratory, Pantex and Y-12 have 
piloted a software program for the NNSA designed to better track and 
manage building infrastructure maintenance that will help us make 
better prioritization decisions. The sites were designated as BUILDER 
Centers of Excellence in 2013 by NNSA and are in the process of 
implementing the U.S. Army Corps of Engineers' BUILDER Sustainment 
Management System. The program will work with existing management tools 
like G2 and is designed to let managers proactively respond to 
infrastructure maintenance needs, and when complete, Pantex's 620 
facilities and Y-12's 345 buildings will be integrated in the program.
    Mr. Rogers. Please provide the committee unclassified pictures of 
the most significant infrastructure challenges and degradations at your 
lab.
    Dr. McMillan. [The photos are retained in the subcommittee files.]
    Mr. Rogers. Do you believe we currently have a ``responsive 
infrastructure'' in our nuclear security enterprise? How would you 
define this term? If given direction and resources by the President and 
Congress, do you believe that NNSA's enterprise produce and deploy to 
the military a nuclear weapon in 5 years? In 10 years?
    Dr. McMillan. Some elements of the current Nuclear Security 
Enterprise (NSE) infrastructure are responsive, but there are others 
that are not. I define responsive infrastructure as how well the 
infrastructure we have can respond to new scope/mission deliverables. 
For this definition, responsiveness is measured in terms of the time 
required to respond. Responding to new scope/mission deliverables would 
involve execution across three essential elements: facilities, 
technical/scientific tools, and people. Facilities: NNSA has 
significant efforts underway to invest in critical infrastructure for 
the future of the Enterprise, in particular with efforts for the 
Uranium Processing Facility (UPF) at Y-12 and the Plutonium Strategy at 
Los Alamos. To create a truly responsive infrastructure, it will be 
essential for Congress and the Administration to continue support for 
these and other critical capabilities over the next decade. Technical/
scientific tools: For the Enterprise to succeed, it will require 
significant investments to build upon the success of the first 20 years 
of Stockpile Stewardship. As a nation, we need to build upon our 
earlier success to establish the next generation of both experimental 
and computing tools so that we can continue to certify the stockpile. 
People: The infrastructure and tools are irrelevant without the right 
people with the right experience; their expertise and state of 
readiness to perform certain types of work is dependent on the degree 
to which their skills have been exercised in critical and necessary 
areas. It takes more than a decade to ``grow'' design expertise and 
this expertise must be exercised and challenged constantly to retain 
competency. NNSA and the labs are exercising these people today through 
the Life Extension Programs and other efforts such as the Foreign 
Nuclear Weapons Intelligence program. Despite this body of work, gaps 
do remain and we will need to continue to work to exercise the full set 
of skill sets across the Enterprise. To your question of being able to 
produce and deploy a weapon, I believe that given today's Enterprise, 
with military requirements and focused application of NNSA resources, 
it would be technically possible for the NNSA Enterprise to produce the 
first production unit of a nuclear weapon that is essentially 
equivalent to those in the existing stockpile within 10 years. It is 
important to note, however, that this statement is true today only 
because the Enterprise has had nearly 15 years of ongoing exercise 
through the Life Extension Programs. This state of responsiveness was 
not the case in the mid-to late-1990s when significant atrophy of 
capability had occurred. The W88 Alt. 370, although limited in scope, 
is an example of the Enterprise's ability to respond relatively quickly 
to a stockpile interest. Again, this was made possible by the fact that 
the Enterprise was able to build upon capabilities and expertise 
developed and honed through the execution of the W76 and now the B61-12 
LEPs. With the Alt. 370, Los Alamos and the Enterprise had to quickly 
respond to a new set of expanded requirements in a compressed 
timeframe. On the one hand, the Alt. 370 shows we can be responsive, 
but it also suggests that the Enterprise would be very challenged to 
produce weapons in significant quantities (the question asks about 
producing one), or weapons that are different from those in the 
stockpile. Additionally, it is unknown how the Enterprise would respond 
if this new requirement was simply overlaid on top of the work that is 
already in progress since several areas of the Enterprise are fully 
committed to the program of record. Additionally, I would highlight for 
the Committee the unique challenges of nuclear components where 
response time to bring new infrastructure online is routinely measured 
in decades.
    Mr. Rogers. Please describe the impacts of your lab's 
infrastructure challenges on your ability to attract, retain, and 
motivate workers? What are the impacts to morale?
    Dr. McMillan. The Laboratory works hard to attract and retain the 
best and brightest workforce, and we are mindful that we are recruiting 
in a very challenging environment, competing against other laboratories 
and tech giants in Silicon Valley and elsewhere. We typically succeed 
when we can demonstrate how recruits will be able to work on complex 
scientific and technical challenges, and have access to state-of-the-
art experimental and supercomputing tools. Workers can become 
demotivated quickly, however, as a consequence of residing in spaces 
that are in poor condition, buildings with systems that break down 
frequently, and areas in which repairs are protracted or take a long 
time to commence. When I testified before the Committee, I talked about 
the challenges of recruiting new postdocs and scientific staff to 
subpar space--just recently a postdoc relayed his frustration about the 
air conditioning in his office not working in the heat of the summer. 
Even some of our most distinguished scientists work in subpar 
environments every day. In the weeks following the hearing, I was 
visiting one of our senior scientists in his laboratory space. The 
researcher had just been named the winner of the prestigious American 
Physical Society (APS) Herman Feshbach prize, a significant and highly 
prestigious recognition from the international scientific community. I 
was troubled to see when I sat in his conference room that the ceiling 
tiles were stained from water leaks and as I took a phone call in his 
administrator's office, I saw rodent traps deployed. Staff morale is 
also impacted by the pace at which infrastructure upgrades can be made. 
Los Alamos works to efficiently invest funds from NNSA and our internal 
site support budgets to address infrastructure issues. At the same 
time, the scale of the Laboratory, and the age of our facilities makes 
it impossible to get to everything at the pace that we would like to.
    Mr. Rogers. If provided increased top-line funding to support it, 
would you favor a new FIRP-like program aimed specifically at dealing 
with deferred maintenance and infrastructure challenges? How would you 
suggest such a program set priorities?
    Dr. McMillan. Yes, if new top-line funding were made available to 
support a new FIRPlike program, we would agree that it would be a good 
thing for the Enterprise. Priorities should be set following the NNSA 
approach: elimination of unneeded facilities; and improved maintenance 
for facilities that support all mission sets at the national security 
laboratories, plants, and the Nevada National Security Site.
    Mr. Rogers. Have you noticed any impact on your ability to attract, 
retain, and motivate workers since the move to your new facility? To 
morale? Do you have any concrete data on this that you can provide to 
the committee?
    Mr. Ricciardelli. One of the most exciting, and most visible, 
aspects of our transformation was our new state-of-the-art LEED Gold-
rated manufacturing and engineering facility. The Kansas City National 
Security Campus's (KCNSC) unique design features give this building a 
high-tech look with an environmentally-friendly presence. The award 
winning design establishes a workplace that inspires and encourages 
collaboration, while celebrating our manufacturing and engineering 
culture.
    A comprehensive Culture and Motivation communications plan was 
deployed to ensure employees were informed and engaged throughout the 
move. Engagement survey results showed 71% felt change was important to 
our success. Following the move, a survey was conducted and 97% of 
respondents agreed that overall, they were satisfied with their move 
experience. Employee engagement survey scores increased 13% from 2012 
to 2014 (there was no survey conducted in 2015). Honeywell also 
conducts positive employee relations surveys annually, and the Kansas 
City location scores have increased on 19 of 20 questions since 2013 
with some of the biggest increases in pride (up 6%) and job security 
(up 11%).
    Significant time and effort has been invested in our talent 
pipeline and recruiting the critical skills needed to accomplish the 
NNSA mission. We are confident the new facility creates an atmosphere 
in which people feel valued and inspired. Although the attrition rate 
at KCNSC has remained fairly constant overall, we have been 
experiencing lower professional/managerial turnover since moving into 
the building than we did in the year leading up to it.
    Mr. Rogers. Please describe the process that your company and NNSA 
went through to build the new Kansas City National Security Campus. 
This was a pretty unique project for NNSA in that it was both a public-
private partnership and it totally replaced an NNSA site, moving it to 
a new building and an entirely new location. What lessons were learned 
during this process? How are you helping NNSA share and apply these 
lessons across the enterprise?
    Mr. Ricciardelli. The process used was a combination of the DOE O 
413.3B process for the acquisition of capital assets and the GSA 
government lease process using third-party financing as shown below.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 

    .epsKey in this process was cooperation between NNSA and GSA where 
project approval was granted by NNSA through Critical Decision-1 (CD-1) 
of the DOE O 413 process in combination with OMB and Congressional 
approval through the GSA prospectus process. The requirements for the 
site were assembled by NNSA in the Program of Requirements document and 
those requirements were bid by private developers through the GSA 
Solicitation for Offer. Not shown in the diagram above is the National 
Environmental Policy Act process requirements that were followed in 
parallel. This process currently cannot be used on federally owned real 
estate due to federal statutes. Because the project assets are 
privately owned, the new site produces property tax revenues and 
therefore local tax incentives were sought and applied.
    The construction and occupancy projects were largely separated. 
Although occupancy wasn't technically a capital acquisition project, 
DOE O 413 provided the process framework and was used to provide 
program controls to execute the entire occupancy project which had 
little direct GSA involvement. Tenant improvements at the site were 
also separated with some being provided as part of the lease according 
to GSA standards, while tenant improvements unique to NNSA's mission 
were funded directly by NNSA outside of the lease.
    The project team captured nearly 300 lessons learned from the eight 
year project and continues to share these lessons with other major 
projects within NNSA including the Uranium Process Facility at Y-12 and 
the Administrative Office Building at Pantex that are currently in 
work. Perhaps the most significant lesson learned is that NNSA can use 
its own real estate and third party financing authority to accomplish 
similar projects without complex integration that is needed to partner 
with GSA.
    Mr. Rogers. Do you believe we currently have a ``responsive 
infrastructure'' in our nuclear security enterprise? How would you 
define this term? If give direction and resources by the President and 
Congress, could NNSA's enterprise produce and deploy to the military a 
nuclear weapon in 5 years? In 10 years?
    General Klotz. A responsive nuclear infrastructure is one that 
reflects the resilience of the nuclear enterprise to unanticipated 
challenges or emerging threats, and the ability to anticipate 
innovations by an adversary and to counter them before our deterrent is 
degraded--all while continuing to carry out the day-to-day activities 
in support of the stockpile. Elements of a responsive infrastructure 
include the people, the science and technology base, and the facilities 
and equipment needed to support a right-sized nuclear weapons 
enterprise designed to maintain a safe, secure, and effective nuclear 
weapons stockpile. The 2010 Nuclear Posture Review identified key 
capabilities required of a responsive nuclear infrastructure. NNSA's 
Uranium Strategy and Plutonium Strategy were developed to address 
several of these key capabilities, including plans to address 
infrastructure issues. A number of critical investments, including the 
Uranium Processing Facility (UPF) and the Chemistry and Metallurgy 
Research Replacement (CMRR) Project, are currently underway to support 
the continued execution of these key capabilities. Both projects will 
move operations from degraded facilities into newer buildings, 
increasing the responsiveness of the enterprise. Additionally, 
investments in other capability areas such as tritium, lithium, and 
microelectronics production are either planned or budgeted. Alongside 
these production capabilities, NNSA also invests in nuclear weapon 
research, development, testing, and evaluation (RDT&E). Initiatives 
like Exascale computing will advance predictive modeling of weapon 
systems, aiding in qualification and experimental design. These 
capabilities support continuing stockpile certification and support 
responsiveness by enabling certification of changes to the stockpile. 
Much of NNSA's infrastructure is old and brittle and we are making key 
investments to ensure the complex is able to be responsible to its 
national security missions. More than 50 percent of NNSA's facilities 
are over 40 years old, nearly 30 percent date to the Manhattan Project 
era, and failures are increasing in frequency, severity, and 
unpredictability. These failures require funding for correct 
maintenance that could otherwise be invested in infrastructure 
modernization activities to further improve the responsiveness of 
NNSA's infrastructure. There are, however, a number of investments that 
are underway to address key infrastructure requirements. Current and 
future support to readiness and responsiveness is provided through NNSA 
investment in vital general purpose infrastructure projects such as the 
TA-3 Substation Replacement project at Los Alamos National Laboratory. 
The project, which began in FY 2016, will replace a degraded and 
increasingly unreliable system with a modern, reliable, and more robust 
system that is easier and more cost effective to maintain and operate. 
The new substation will reduce deferred and emergency maintenance, 
improve safety, and upgrade and increase power import capacity to 
support new programs. By 2025, NNSA will have developed and deployed to 
the military three life-extended warhead systems (W76-1, B61-12, and 
W88 Alt 370.) The average time from NWC authorization of Phase 6.2/6.2A 
(Feasibility Study and Option Down-Select/Design Definition and Cost) 
to First Production Unit (FPU) has been between 9-11 years for these 
programs, with design complexity, funding, administrative regulations, 
and technical challenges driving the time range. The actual time to 
complete a program depends on the complexity of the work, the quantity 
to be produced, and the amount of funding appropriated. Although each 
of these programs has experienced delays due to funding and scope 
alterations, the enterprise has shown an improving trend in execution. 
Continued investment in infrastructure and equipment is needed to 
increase this trend. The 2010 Nuclear Posture Review states: ``The 
United States will not develop new nuclear warheads. Life Extension 
Programs will use only nuclear components based on previously tested 
designs, and will not support new military missions or provide for new 
military capabilities.'' However, should a scenario arise where a new 
mission or capability was required, coupled with National will, 
Executive backing, and Congressional funding, the time to produce a 
weapon would likely be significantly reduced. Without continued and 
predictable modernization investment, NNSA's ability to meet the 
challenges of unanticipated world events will be reduced.
    Mr. Rogers. How does the state of NNSA's infrastructure impact its 
readiness and responsiveness to react to changes in programs and 
mission needs?
    General Klotz. A responsive nuclear infrastructure is one that 
reflects the resilience of the nuclear enterprise to unanticipated 
challenges or emerging threats, and the ability to anticipate 
innovations by an adversary and to counter them before our deterrent is 
degraded--all while continuing to carry out the day-to-day activities 
in support of the stockpile. Elements of a responsive infrastructure 
include the people, the science and technology base, and the facilities 
and equipment needed to support a right-sized nuclear weapons 
enterprise designed to maintain a safe, secure and effective nuclear 
weapons stockpile. As stressed in the 2010 Nuclear Posture Review, 
NNSA's infrastructure must be able to not only support the work we 
currently have planned, but respond to technical challenges and 
geopolitical surprises. Following Congressional direction provided in 
the National Defense Authorization Act for Fiscal Year 2016, NNSA is 
carrying out a Stockpile Responsiveness Program in order to identify, 
sustain, enhance, integrate, and continually exercise all capabilities 
required to conceptualize, study, design, develop, engineer, certify, 
produce, and deploy nuclear weapons. This program looks for potential 
future gaps in the deterrent in conjunction with the DOD and exercises 
everything from design to testing in a substantially compressed 
timescale. NNSA continues to maintain a safe, secure, and effective 
nuclear weapons stockpile while being responsive to the nation's 
current nuclear security needs. That said, more than 50 percent of 
NNSA's nuclear infrastructure includes facilities that are over 40 
years old, and almost 30 percent date to the Manhattan Project. Life 
Extension Programs and weapons dismantlement, coupled with the normal 
stockpile stewardship activities, have increased the demand placed upon 
this infrastructure. Without significant, sustained, and predictable 
modernization investment, the risk to NNSA's ability to meet the 
challenges of unanticipated world events while maintaining the nuclear 
weapons stockpile safe, secure, and effective will increase. Further, 
in order to sustain the nuclear deterrent over the long-term, NNSA 
requires reliable and modern programmatic, security, and general 
purpose infrastructure that not only provides for today's capabilities, 
but allows for the opportunity to expand future capacities.
    Mr. Rogers. What is your view of the impact of sites' 
infrastructure challenges on NNSA's ability to attract, retain, and 
motivate highly-skilled workers? What are the impacts to morale?
    General Klotz. To attract and retain a workforce capable of 
performing NNSA's missions to the highest standards, NNSA must compete 
with companies and universities that have state-of-the-art facilities, 
the latest technologies, and modern work environments. Recruitment is a 
challenge with degraded, and in certain places obsolete infrastructure 
and equipment. NNSA facilities continue to experience infrastructure 
related failures (e.g., power outages, inadequate heating/cooling, and 
deficient IT/communication services). This results in workforce 
disruptions and personnel moves to perform infrastructure upgrades or 
repairs to restore the basic necessities. NNSA workers often work 
through infrastructure and equipment deficiencies in order to meet 
today's mission deliverables. However, if infrastructure improvements 
are not demonstrated across the NSE to attract and retain highly-
skilled workers and improve working conditions and efficiencies, then 
NNSA is at risk of being unable to meet national security requirements 
in the future. NNSA has implemented a project prioritization 
methodology that identifies the most pressing infrastructure 
investments that reduce the highest risks including workforce ability 
to deliver mission.
    Mr. Rogers. What projects not currently underway is NNSA 
considering that could leverage public-private partnerships?
    General Klotz. As part of our improved project management 
initiatives, NNSA implements a comprehensive Analysis of Alternatives 
(AOA) process to identify the most cost- effective approach for each 
mission need. NNSA uses public-private partnerships when an AOA 
determines it appropriate. Currently, Los Alamos National Laboratory, 
Lawrence Livermore National Laboratory and Sandia National Laboratories 
are seeking new facilities including high-performance computing 
facilities and experimental facilities.
    Mr. Rogers. If provided increased top-line funding to support it, 
would you favor a new FIRP-like program aimed specifically at dealing 
with deferred maintenance and infrastructure challenges? How would you 
suggest such a program set priorities?
    General Klotz. The establishment of the Office of Safety, 
Infrastructure, and Operations in January 2015 along with our current 
budget structure--approved by Congress for Fiscal Year (FY) 2016--
provides NNSA with flexibility necessary to respond to emergent needs. 
Within the Office of Safety, Infrastructure, and Operations, NNSA has 
two FIRP-like programs that address deferred maintenance:
      Maintenance and Repair of Facilities; and
      Recapitalization: Infrastructure and Safety.
    Sustained, predictable, and increased investments in these two 
programs are needed to improve the condition of NNSA infrastructure and 
reduce deferred maintenance. NNSA has a project prioritization 
methodology that prioritizes annual investments by evaluating key 
criteria. Criteria evaluated include deferred maintenance reduction, 
program requirements, safety and programmatic risk reduction, and 
increases in operational efficiency and/or productivity.
    Mr. Rogers. How does NNSA measure its backlog of deferred 
maintenance? What metrics are used and how is the term defined? Does 
NNSA have a rigorous and well-documented means of measuring this?
    Mr. McConnell. NNSA determines deferred maintenance based on 
condition assessment surveys. Deferred maintenance is defined by the 
Federal Accounting Standards Advisory Board (FASAB) as: Maintenance and 
repairs that were not performed when they should have been or were 
scheduled to be and which are put off or delayed for a future period. 
The determination of acceptable condition may vary both between 
entities and among sites within the same entity. Management shall 
determine what level of condition is acceptable. NNSA has worked with 
representatives from NNSA sites to amplify guidance to standardize 
reporting of deferred maintenance across all NNSA sites. The 
implementation guidelines are documented and released annually in the 
Office of Safety, Infrastructure, and Operations' Program Management 
Plan (PMP). NNSA continuously seeks to improve its information on 
deferred maintenance to ensure accuracy and consistency across NNSA's 
enterprise. In 2016, NNSA is using this standardized approach to 
revalidate information on the condition of infrastructure and the 
assessment of deferred maintenance and repair needs to ensure accuracy 
and consistency across NNSA's enterprise. The results will not be 
available until after the fiscal year ends, but NNSA expects that this 
will result in some amount of deferred maintenance being reclassified 
as other repair needs, so there will be a one-time administrative 
reduction to the current deferred maintenance total.
    Mr. Rogers. NNSA's budget request says it will halt the growth of 
the $3.7 billion backlog of deferred maintenance across the nation's 
nuclear security enterprise, which is an improvement on decades of 
increasing backlog. But for the second year in a row it would not 
decrease that backlog. What are the risks to safety and to NNSA's 
mission of continuing to operate in these facilities?
    Mr. McConnell. In Fiscal Year (FY) 2016, NNSA will halt the growth 
of deferred maintenance, and the FY 2017 budget request, if fully 
supported, will allow NNSA to begin reducing deferred maintenance and 
arresting the decline of infrastructure by:
      Increasing funds for recapitalization and maintenance 
efforts;
      Disposing of excess facilities;
      Increasing buying power via strategic procurement of 
common building systems across the enterprise (e.g., roofs, HVAC); and
      Improving project management capabilities to make risk 
informed investment decisions.
    NNSA's capability to achieve its programmatic goals is dependent 
upon safe and reliable infrastructure. However, much of NNSA's 
infrastructure is degraded and the condition of nearly two-thirds of 
NNSA's infrastructure is less than adequate to meet mission needs. As a 
result, infrastructure failures are increasing in frequency, severity, 
and unpredictability. This poses an increasing safety and programmatic 
risk to NNSA. Facility and equipment failures either impact the mission 
directly or impact our ability to ensure safe and secure operations. In 
the latter case, NNSA and our M&O contractors take action to put 
operations in a safe and secure condition. This usually includes 
suspending operations, which results in mission impacts.
    Mr. Rogers. Does NNSA have metrics or ways to measure the 
inefficiencies or costs that are being borne because of these old 
buildings and this large backlog of deferred maintenance? Please 
provide a rough order of magnitude estimate.
    Mr. McConnell. NNSA is investigating new measures to give greater 
insight into the costs and inefficiencies caused by the declining state 
of infrastructure.
    Mr. Rogers. How does NNSA prioritize between preventative 
maintenance and recapitalization? How does it judge when to continue 
preventative maintenance versus when a building requires demolition and 
a full-rebuild?
    Mr. McConnell. NNSA is deploying a number of new management tools 
to improve our ability to make data-driven, risk-informed investment 
decisions to address infrastructure challenges. One such tool, BUILDER, 
is a web-based software developed by the U.S. Army Corps of Engineers 
that enables decisions concerning when, where, and how to best 
maintain, repair, and recapitalize infrastructure. The tools and 
processes serve as a guide and are not intended to replace expert 
analysis informed by program integration. A primary consideration of 
when a building requires demolition and replacement is when a facility 
can no longer house the intended capability or mission need.
    Mr. Rogers. Please provide the committee a comprehensive list of 
currently unfunded infrastructure and deferred maintenance projects 
that NNSA could execute in the next several years, if provided 
increased resources.
    Mr. McConnell. As requested, NNSA is providing a list of currently 
unfunded Recapitalization projects that NNSA could execute in the next 
several years should additional resources be available. The list 
provided is unconstrained and builds from the project list included in 
the NNSA Fiscal Year 2017 President's Budget Request.

                                    National Nuclear Security Administration
                                            Infrastructure and Safety
                           Over Target FY 2017 Recapitalization Projects-October 2016
----------------------------------------------------------------------------------------------------------------
                                                                                                   Total Project
   Rank       Site                                   Project Name                                   Cost  ($K)
----------------------------------------------------------------------------------------------------------------
 
1----------LLNL-------Site 300 Electric Utility Display System Upgrade----------------------------$7,000--------
----------------------------------------------------------------------------------------------------------------
2          LANL       LANSCE Sector A Tunnel Fire Suppression System Installation                 $3,000
----------------------------------------------------------------------------------------------------------------
3          LLNL       B132N HVAC System Variable Air Control Replacement                          $5,000
----------------------------------------------------------------------------------------------------------------
4          Y-12       Bldg 9204-2E Wet Pipe Systems 1&2 50 Year Sprinkler Head Replacement        $5,500
----------------------------------------------------------------------------------------------------------------
5          Y-12       Bldg 9995 Air Handling Unit (AHU) 2000 Replacement                          $6,000
----------------------------------------------------------------------------------------------------------------
6          Y-12       Area 5 15 kV Underground Cable Replacement                                  $5,000
----------------------------------------------------------------------------------------------------------------
7          KCP        Kirtland Ops NC-135 Site Disposition                                        $4,900
----------------------------------------------------------------------------------------------------------------
8          LLNL       Bldg 175 Characterization                                                   $1,500
----------------------------------------------------------------------------------------------------------------
9          Y-12       Bldg 9204-2 Ceiling Concrete and Steel Inspection and Replacement           $6,000
----------------------------------------------------------------------------------------------------------------
10         PX         Bldg 12-84E Generator Replacement                                           $2,000
----------------------------------------------------------------------------------------------------------------
11         KCP        Bldg 2 Specialty Welding Applications Capital Equipment Replacement &       $1,200
                       Upgrade
----------------------------------------------------------------------------------------------------------------
12         LANL       PF-4 Vault Storage Renovation                                               $7,500
----------------------------------------------------------------------------------------------------------------
13         LLNL       Utility Safety Upgrades to Plating Shop, B322                               $2,500
----------------------------------------------------------------------------------------------------------------
14         SNL        C914 Seismic Upgrades to Achieve Code Compliance                            $9,720
----------------------------------------------------------------------------------------------------------------
15         LLNL       Bldg 292 Characterization                                                   $2,000
----------------------------------------------------------------------------------------------------------------
16         LLNL       Site 200 and 300 Transition and Disposition of 48 Trailers                  $2,500
----------------------------------------------------------------------------------------------------------------
17         SNL        SNL-Hawaii Mt. Haleakala Disposition of 3 Facilities                        $934
----------------------------------------------------------------------------------------------------------------
18         LLNL       Site-Wide Low Conductivity Water System Station/Cooling Tower Replacement   $6,000
----------------------------------------------------------------------------------------------------------------
19         LLNL       S200 Failing Underground Utility Valves & Water Distribution Piping         $5,000
                       Replacement
----------------------------------------------------------------------------------------------------------------
20         PX         Building 12-84E Generator Replacement                                       $2,000
----------------------------------------------------------------------------------------------------------------
21         SNL        C912 Major Building Renovation, Phase 3                                     $5,000
----------------------------------------------------------------------------------------------------------------
22         LLNL       B131 Engineering's Cornerstone Office Building Upgrade                      $7,500
----------------------------------------------------------------------------------------------------------------
23         KCP        Product Testing Area Capital Equipment Replacement                          $2,490
----------------------------------------------------------------------------------------------------------------
24         SNL        Substation 5 Loop Upgrade, Redundant Feeder Installation                    $5,000
----------------------------------------------------------------------------------------------------------------
25         Y-12       9204-04 Deinventory                                                         $8,000
----------------------------------------------------------------------------------------------------------------
26         PX         Bldg 12-24E Chiller Replacement                                             $2,000
----------------------------------------------------------------------------------------------------------------
27         LANL       Small Improvement Project in 3 Facilities (53-003,22-0005, 03-0039)         $1,300
----------------------------------------------------------------------------------------------------------------
28         LLNL       B805 Classified Machine Shop Infrastructure Renovation                      $3,500
----------------------------------------------------------------------------------------------------------------
29         LANL       CMR Initial Facility Closure, Wing 2,3,5 and 7 Clean Up                     $1,500
----------------------------------------------------------------------------------------------------------------
30         LLNL       B327 Non-Destructive Evaluation Laboratory Renovation                       $2,500
----------------------------------------------------------------------------------------------------------------
31         LLNL       B391 HVAC Water Temperature Control Upgrade                                 $3,000
----------------------------------------------------------------------------------------------------------------
32         Y-12       Re-line Failing Sections of Sitewide Potable Water Distribution Piping      $8,000
----------------------------------------------------------------------------------------------------------------
33         LANL       TA-03-0102 Component Manufacturing Virtual Vault Type Room Installation     $1,599
----------------------------------------------------------------------------------------------------------------
34         KCP        Production Area Renovations for Floor Space Optimization                    $2,143
----------------------------------------------------------------------------------------------------------------
35         LLNL       Disposition of Buildings B326, B221, & B221 Retention Tanks                 $2,000
----------------------------------------------------------------------------------------------------------------
36         SNL        C911 Renovation to Convert Office to Lab Space                              $5,000
----------------------------------------------------------------------------------------------------------------
37         PX         Bldgs 12-85 and 12-96 UPS Replacements                                      $2,250
----------------------------------------------------------------------------------------------------------------
38         PX         Bldg 12-44 UPS Replacement & Equipment Room Reconfiguration                 $3,000
----------------------------------------------------------------------------------------------------------------
39         PX         Bldg 11-51 Generator and UPS Replacement                                    $2,250
----------------------------------------------------------------------------------------------------------------
40         PX         Bldgs 12-98E1 and E2 UPS and Generator Replacement                          $3,000
----------------------------------------------------------------------------------------------------------------
41         LANL       Weapons Engineering Tritium Facility Glovebox and Systems Renovation        $8,250
----------------------------------------------------------------------------------------------------------------
42         Y-12       Bldg 9720-82 (HEUMF) VESDA Installation                                     $5,000
----------------------------------------------------------------------------------------------------------------
43         Y-12       9204-2E Criticality Accident Alarm System (CAAS)                            $4,500
----------------------------------------------------------------------------------------------------------------
44         LANL       D&D of the 100,000 gallon Single Walled Storage Tank (TA-50-90)             $2,500
----------------------------------------------------------------------------------------------------------------
45         NNSS       Atlas Machine Removal                                                       $3,500
----------------------------------------------------------------------------------------------------------------
46         SNL        Coyote Test Field, Twin Tanks Piping Replacement                            $173
----------------------------------------------------------------------------------------------------------------
47         SNL        NM High Voltage System, Overhead Switch- SW-390 Replacement                 $153
----------------------------------------------------------------------------------------------------------------
48         SRS        HAOM Tritium Grab Sample Capability move to TEF                             $1,400
----------------------------------------------------------------------------------------------------------------
49         SNL        Natural Gas System, Tech Area I, Piping Replacement                         $1,194
----------------------------------------------------------------------------------------------------------------
50         LLNL       B332 Diesel Generator Replacement Project                                   $1,500
----------------------------------------------------------------------------------------------------------------
51         SNL        Bldg 960 Chilled Water System Upgrade                                       $2,950
----------------------------------------------------------------------------------------------------------------
52         LANL       PF-4 Fire Wall Upgrades                                                     $7,000
----------------------------------------------------------------------------------------------------------------
53         SRS        HANM Obsolete Oxygen Monitor Replacement in Loading Line 6 Glovebox (L6-    $1,815
                       O2)
----------------------------------------------------------------------------------------------------------------
54         SRS        HANM Obsolete Oxygen Monitor Replacement in Finishing Line 6 (F6-O2)        $1,815
                       Glovebox
----------------------------------------------------------------------------------------------------------------
55         LLNL       B806/B810 High Explosives Machining/Assembly--HVAC and Electrical DM        $4,773
                       reduction and recapitalization
----------------------------------------------------------------------------------------------------------------
56         SNL        NM Tech Area III/V, 14" Water Main Replacement                              $4,140
----------------------------------------------------------------------------------------------------------------
57         KCP        Bldg 2 Specialty Welding Applications Equipment Replacement and Upgrade     $1,136
----------------------------------------------------------------------------------------------------------------
58         NNSS       Water/Wastewater Systems--CP Hill Water Line Replacement                    $7,000
----------------------------------------------------------------------------------------------------------------
59         Y-12       Bldg 9212 50 Year Sprinkler Head Replacement (Wet Pipe System 009)          $4,400
----------------------------------------------------------------------------------------------------------------
60         Y-12       Bldg 9204-02E Transformer, Interrupter, Switches & Underground Cable        $2,000
                       Replacement
----------------------------------------------------------------------------------------------------------------
61         SNL        Bldg 1012--Battery Test Facility                                            $8,000
----------------------------------------------------------------------------------------------------------------
62         PX         Bldg 12-104A Blast Door Interlock Programmable Logic Controller             $2,000
                       Replacement
----------------------------------------------------------------------------------------------------------------
63         Y-12       Bldg 9215 50 Year Sprinkler Head Replacement (Wet Pipe System 004)          $1,700
----------------------------------------------------------------------------------------------------------------
64         KCP        Bldg 2 Special Application Machining and Welding Area Renovations           $2,143
----------------------------------------------------------------------------------------------------------------
65         LANL       RLWTF Ground Water Permit Discharge Regulatory Requirements Mitigation      $8,000
                       (Zero Liquid Discharge Liner Replacement & Room 60 Configuration)
----------------------------------------------------------------------------------------------------------------
66         NNSS       New Mercury Consolidated Operations Complex Building 1 (23-460)             $9,000
----------------------------------------------------------------------------------------------------------------
67         SRS        Workplace Improvements                                                      $500
----------------------------------------------------------------------------------------------------------------
68         LLNL       B321/B322 HVAC & Electrical Replacement                                     $5,725
----------------------------------------------------------------------------------------------------------------
69         Y-12       Bldg 9212 Room 1022A Ventilation System Installation                        $1,000
----------------------------------------------------------------------------------------------------------------
70         LLNL       Site-wide Mechanical Utility Valves and Water Distribution Piping           $5,000
                       Replacement
----------------------------------------------------------------------------------------------------------------
71         Y-12       Bldg. 9212 302 Steam Supply Station and SF-302 Steam Coil Replacement       $1,700
----------------------------------------------------------------------------------------------------------------
72         LLNL       B132/B321A/B451 Fire Protection Systems Replacement (DM)                    $4,360
----------------------------------------------------------------------------------------------------------------
73         SNL        SNL/CA Sanitary Sewer Replacements                                          $7,000
----------------------------------------------------------------------------------------------------------------
74         NNSS       U1a Shaft Wood Lagging Replacement                                          $8,100
----------------------------------------------------------------------------------------------------------------
75         LANL       PF-4 Fire Water Loop Component Replacements                                 $7,395
----------------------------------------------------------------------------------------------------------------
76         NNSS       U1a Public Address System Replacement                                       $3,000
----------------------------------------------------------------------------------------------------------------
77         KCP        Metal Tooling and Production Additive Manufacture Installation              $9,000
----------------------------------------------------------------------------------------------------------------
78         SRS        HAOM to HANM Reservoir Assessment Relocation                                $6,200
----------------------------------------------------------------------------------------------------------------
79         Y-12       Bear Creek Road 13.8 kV Electrical Distribution Installation                $8,600
----------------------------------------------------------------------------------------------------------------
80         KCP        Bldgs 2 & 3 Analytical Testing and Controls Capital Equipment Replacement   $2,878
                       and Upgrade
----------------------------------------------------------------------------------------------------------------
81         Y-12       Bldg 9204-02 Elevator #2 Replacement                                        $3,000
----------------------------------------------------------------------------------------------------------------
82         SNL        NM High Voltage Power System, Substation 5 Loop Redundant Feeders Upgrade   $3,180
----------------------------------------------------------------------------------------------------------------
83         NNSS       DAF Automated Energy Management System (AEMS) Replacement                   $6,700
----------------------------------------------------------------------------------------------------------------
84         LLNL       B222A Nuclear Explosives Package Device Component Engineering Laboratory    $9,900
----------------------------------------------------------------------------------------------------------------
85         SNL        Bldg 878 (Process Development Lab) Renovation                               $8,500
----------------------------------------------------------------------------------------------------------------
86         Y-12       Bldg 9204-02 50 Year Sprinkler Head Replacement (Wet Pipe System 005)       $3,800
----------------------------------------------------------------------------------------------------------------
87         Y-12       Bldg 9995 Chilled Water and Steam Condensate Piping Replacement             $3,000
----------------------------------------------------------------------------------------------------------------
88         Y-12       Bldg 9212 50 Year Sprinkler Head Replacement (Wet Pipe System 007)          $5,800
----------------------------------------------------------------------------------------------------------------
89         Y-12       Bldg 9215 Switchgear 253 Replacement                                        $4,000
----------------------------------------------------------------------------------------------------------------
90         LLNL       B322 Plating Shop Utility Safety Upgrades                                   $2,500
----------------------------------------------------------------------------------------------------------------
91         LLNL       B332 iCAM Alarm System Upgrade                                              $1,000
----------------------------------------------------------------------------------------------------------------
92         Y-12       Bldg 9204-02 Stab-Lok and Fused Electrical Panel Replacement                $1,900
----------------------------------------------------------------------------------------------------------------
93         LLNL       B131 High Bay HVAC Replacement                                              $4,390
----------------------------------------------------------------------------------------------------------------
94         Y-12       Fire and Potable Water Replacement of 9 Laterals to Nuclear Facilities      $3,000
----------------------------------------------------------------------------------------------------------------
95         LANL       SM-39 Classified Machine Shop Upgrade                                       $4,000
----------------------------------------------------------------------------------------------------------------
96         Y-12       Demineralized Water Delivery System Replacement                             $7,500
----------------------------------------------------------------------------------------------------------------
97         Y-12       Bldg 9995 Supply Fan Replacement/Refurbishment                              $5,000
----------------------------------------------------------------------------------------------------------------
98         LLNL       B805 S300 Classified Machine Shop Ventilation & Utility Renovation          $3,500
----------------------------------------------------------------------------------------------------------------
99         LANL       PF-4 Fire Water Loop Component Replacements (Pumps & Boiler Replacement)    $7,105
----------------------------------------------------------------------------------------------------------------
100        SRS        Analytical Lab Relocation From 234-H to 264-H                               $3,000
----------------------------------------------------------------------------------------------------------------
101        LLNL       Site 300 Storm Water Safety Improvements & Erosion Control (Elk Ravine)     $4,925
----------------------------------------------------------------------------------------------------------------
102        NNSS       DAF Domestic Water System Upgrade                                           $4,700
----------------------------------------------------------------------------------------------------------------
103        NNSS       U1a Lightning Protection Upgrades                                           $1,900
----------------------------------------------------------------------------------------------------------------
104        LANL       TA-16-0303 Renovation for Crystal Lab Relocation                            $3,000
----------------------------------------------------------------------------------------------------------------
105        PX         Bldg 12-31 HVAC and DH Replacement                                          $4,500
----------------------------------------------------------------------------------------------------------------
106        NNSS       DAF Electrical Substations Upgrade                                          $5,500
----------------------------------------------------------------------------------------------------------------
107        PX         Bldg 12-85 and 12-96 UPS Replacement and Generator Installation             $2,000
----------------------------------------------------------------------------------------------------------------
108        PX         Bldg 12-126 HVAC Replacement                                                $4,500
----------------------------------------------------------------------------------------------------------------
109        KCP        Bldg 2 Assembly, Electrical & Fabrication (AEF) Capital Equipment           $2,079
                       Replacement and Upgrade
----------------------------------------------------------------------------------------------------------------
110        LLNL       B151 Renovation of 4 High Level Radiochemistry Laboratories (Anteroom       $4,655
                       renovation)
----------------------------------------------------------------------------------------------------------------
111        KCP        Bldgs 2 & 3 Non-destructive Testing Capital Equipment Replacement and       $2,490
                       Upgrades
----------------------------------------------------------------------------------------------------------------
112        KCP        Bldg 2 Paint and Heat Treat Capital Equipment Replacement                   $2,575
----------------------------------------------------------------------------------------------------------------
113        LLNL       Sustainable Chilled and Heating Hot Water Systems Modernization             $3,000
----------------------------------------------------------------------------------------------------------------
114        PX         Lightning Protection System Upgrade for 10 MAA Facilities                   $8,000
----------------------------------------------------------------------------------------------------------------
115        KCP        Bldgs 2 & 3 Special Materials Production and Rubber and Plastics Capital    $2,986
                       Equipment Replacement and Upgrade
----------------------------------------------------------------------------------------------------------------
116        PX         Bldg 12-98 UPS Replacement and Generator Installation                       $3,000
----------------------------------------------------------------------------------------------------------------
117        KCP        Bldgs 2 & 3 Environmental Testing and Controls Capital Equipment            $2,754
                       Replacement and Upgrade
----------------------------------------------------------------------------------------------------------------
118        LANL       TA-53-0003 (LANSCE) Fire Suppression System in Accelerator Tunnel           $5,800
                       Installation
----------------------------------------------------------------------------------------------------------------
119        LLNL       B170 Upgrade Classified Computing and Communications                        $2,500
----------------------------------------------------------------------------------------------------------------
120        PX         Bldg 11-55 UPS & Generator Replacement                                      $2,000
----------------------------------------------------------------------------------------------------------------
121        KCP        Bldgs 2 & 3 Paint & Heat Treat and Rubber and Plastics Area Renovations     $1,654
----------------------------------------------------------------------------------------------------------------
122        LANL       Firing Sites Confinement Vessel Building Construction                       $8,750
----------------------------------------------------------------------------------------------------------------
123        PX         Bldg 12-104A Uninterruptible Power Supply Replacement                       $1,500
----------------------------------------------------------------------------------------------------------------
124        KCP        Bldgs 2 & 3 Assembly, Electrical & Fabrication and Environmental Testing    $2,289
                       Area Renovations
----------------------------------------------------------------------------------------------------------------
125        PX         Bldg 12-99 UPS Replacement                                                  $1,500
----------------------------------------------------------------------------------------------------------------
126        PX         Bldg 12-94 UPS Replacement                                                  $1,500
----------------------------------------------------------------------------------------------------------------
127        KCP        Bldgs 2 & 3 Process Marking and Printing Applications Capital Equipment     $2,785
                       Replacement and Upgrade
----------------------------------------------------------------------------------------------------------------
128        PX         Bldg 12-121 OMI & BDI Controller Replacement                                $4,000
----------------------------------------------------------------------------------------------------------------
129        PX         Bldg 12-104 Blast Door Interlock PLC Replacement                            $4,000
----------------------------------------------------------------------------------------------------------------
130        PX         Bldg 12-86 Uninterruptible Power Supply Replacement                         $1,500
----------------------------------------------------------------------------------------------------------------
131        PX         Bldg 12-130 Generator and UPS Replacement                                   $1,500
----------------------------------------------------------------------------------------------------------------
132        PX         Bldg 12-121 UPS Replacement                                                 $1,250
----------------------------------------------------------------------------------------------------------------
133        NNSS       Mercury Sewer Lines Replacement                                             $8,450
----------------------------------------------------------------------------------------------------------------
134        LLNL       Bldg 28XX Complex Disposition of 4 trailers                                 $2,500
----------------------------------------------------------------------------------------------------------------
135        Y-12       Bldg 9201-05 Deinventory                                                    $20,000
----------------------------------------------------------------------------------------------------------------
136        Y-12       Bldg 9202-04 Deinventory                                                    $1,000
----------------------------------------------------------------------------------------------------------------
137        LANL       TA-16-0306 Characterization                                                 $2,000
----------------------------------------------------------------------------------------------------------------
138        NNSS       Mercury Bldgs 23-517 & 23-B, 23-C, 23-D Disposition                         $2,000
----------------------------------------------------------------------------------------------------------------
139        NNSS       Mercury Disposition of 10 facilities                                        $2,400
----------------------------------------------------------------------------------------------------------------
140        SRS        Bldg 236-H shutdown                                                         $2,000
----------------------------------------------------------------------------------------------------------------
141        PX         Bldg 11-029 Shutdown                                                        $2,600
----------------------------------------------------------------------------------------------------------------
142        LLNL       Bldg 363 Biomedical Laboratory Disposition                                  $1,000
----------------------------------------------------------------------------------------------------------------
143        NNSS       Area 6 Disposition of 5 facilities                                          $1,000
----------------------------------------------------------------------------------------------------------------

    Mr. Rogers. Please provide us a summary of the FIRP program, what 
it accomplished, and how much it cost. How did FIRP set priorities? Why 
was FIRP terminated?
    Mr. McConnell. NNSA successfully completed the Facilities and 
Infrastructure Recapitalization Program (FIRP) in 2013. FIRP was 
created to reduce a substantial accumulation of backlogged facility 
maintenance, repair, and demolition projects across NNSA's eight sites. 
Among its achievements, FIRP:
      Executed nearly 800 projects throughout the NNSA 
enterprise;
      Eliminated $900 million of baselined deferred maintenance 
and brought the overall condition of the enterprises' essential 
facilities up to industry standards;
      Managed 625 recapitalization projects ($1.2 billion) that 
refurbished laboratory and production facilities, repaired or replaced 
electrical and mechanical equipment, utility lines, fire protection, 
power and lighting systems, roofs, roads and other vital 
infrastructure; and
      Oversaw 145 disposition projects which removed 3.5 
million square feet of excess footprint, opened many acres of space for 
redevelopment, shrank security perimeters and reduced deteriorated 
condition.
    In total, FIRP was funded over $2 billion to address NNSA 
infrastructure needs (averaging about $160 million per year). FIRP was 
terminated in 2013 in accordance with its sunset date of the initial 
legislation. However, the Office of Safety, Infrastructure & Operations 
maintains authorities of FIRP.
    Mr. Rogers. Can you quantify for us how much of the $3.7 billion 
backlog in deferred maintenance must get fixed directly, and how much 
is attached to facilities that will be torn down? How does NNSA 
delineate between real, concrete requirements for deferred maintenance 
dollars at enduring facilities versus requirements at excess 
facilities?
    Mr. McConnell. As of the end of Fiscal Year (FY) 2015, NNSA's 
deferred maintenance on operating facilities totaled approximately $2.8 
billion. The remaining balance is deferred maintenance on excess 
facilities and facilities to be excessed within ten years. A breakout 
is provided below.

              NNSA Deferred Maintenance (DM) as of FY 2015
                         (dollars in thousands)
------------------------------------------------------------------------
                     Total DM                            $3,667,183
------------------------------------------------------------------------
DM on excess facilities                             $497,216
------------------------------------------------------------------------
DM on facilities to be excess in 10 years           $354,920
------------------------------------------------------------------------

    Once a facility becomes excess, the majority of deferred 
maintenance is removed because NNSA no longer needs to conduct that 
maintenance as the facility is no longer needed for mission work. 
However, deferred maintenance will remain and/or accumulate on any 
systems required to maintain the facility in a safe, shutdown 
condition, such as fire suppression systems.
    Mr. Rogers. How does NNSA allocate its general maintenance funding? 
Does it choose particular projects, or does it allocate based on a 
site's deferred maintenance backlog figure?
    Mr. McConnell. To support the annual budget request process, NNSA 
conducts a disciplined programming process by integrating budgets 
across portfolios to ensure maintenance investments are consistent 
with, and support the other programmatic work of the NNSA enterprise. 
The majority of NNSA's maintenance work consists of recurring day-to-
day activities to sustain operations and is therefore not projectized. 
However, as part of NNSA's annual planning process, M&O contractors are 
required to submit requests for maintenance funding, which include: a 
description of the work to be accomplished, including major mission 
deliverables and programs supported; a description of any key work not 
accomplished and any remaining risk; workforce impacts (total FTEs/
year); and annual funding requirements. NNSA evaluates these requests, 
adjusts the annual funding requested as determined by subject matter 
experts, and develops a proposed maintenance allocation for each site. 
The site allocations are subject to change based on decisions made to 
balance maintenance investments with programmatic priorities during the 
NNSA programming process.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. COOPER
    Mr. Cooper. What is the cost and safety risk of deferring problems 
and maintenance, and what are you doing to incentivize addressing and 
funding routine maintenance before small problems become big problems?
    Mr. Smith. The primary concern with knowingly deferring maintenance 
is that a major, unforeseen failure could occur. Our top non-
negotiables--we call them our imperatives--are safety and security. We 
will protect our people, our communities, the materials we are 
entrusted with, and the environment in which we and our friends, 
neighbors, and communities live. We cannot, and will not, compromise 
safety and security. Our nation, however, also relies on us to deliver 
our mission with the highest quality products and services. Keeping our 
facilities and working conditions safe, secure, and operating properly 
requires ever-increasing operations and maintenance funding because the 
potential disruption to operations and mission deliverables is a real 
concern, as is the likelihood for a substantial increase in costly 
repairs. Additionally, as discussed during my testimony, there are 
occasional facility conditions that place and individual or a group of 
individuals in a higher risk posture than we would like despite our 
best efforts to find and correct these conditions.
    Mr. Cooper. What is the cost and safety risk of deferring problems 
and maintenance, and what are you doing to incentivize addressing and 
funding routine maintenance before small problems become big problems?
    Dr. McMillan. We manage our infrastructure portfolio centrally at 
the Laboratory to prioritize investments that minimize risk while 
accomplishing the mission. For example, the safety of our workforce and 
the public are prioritized over risks to mission and schedule. Members 
of our workforce are strongly committed to the national mission, and 
they can become frustrated if their ability to execute their work in 
support of Laboratory missions is affected by unfortunate or unforeseen 
infrastructure issues. We plan our maintenance work to emphasize 
predictive and preventive maintenance in order to limit the need for 
corrective maintenance within the budgets that we are provided by NNSA 
and our internal site support funds. On average, the Laboratory spends 
45-50% of our maintenance budget on preventive maintenance and the 
balance on corrective maintenance. The incentive for this approach is 
simple. We minimize disruptions to work when we can by carefully 
planning maintenance activities, and coordinating outages at the 
Laboratory with mission requirements. Corrective maintenance, by 
definition, is performed after there are equipment failures that create 
disruptions and impacts to the mission. However, when maintenance is 
deferred due to lack of funding, it is just a matter of time before 
equipment or system failures occur.
    Mr. Cooper. What is the cost and safety risk of deferring problems 
and maintenance, and what are you doing to incentivize addressing and 
funding routine maintenance before small problems become big problems?
    Mr. Ricciardelli. At the legacy Bannister facility, between 250 and 
300 electricians, millwrights, janitors, and laborers were employed 
full time to maintain the 1940s vintage facility. Even with that level 
of effort, deferred maintenance remained constant at about $130M. 
Because facility maintenance projects are largely ``one-of-a-kind,'' 
the safety risk is much higher than routine, repeatable production 
work. The plant had good safety performance overall, but the majority 
of the OSHA-reportable injuries originated from maintenance projects.
    Under the new KCNSC lease model, facility maintenance costs are 
largely included in the lease payment and an escrow fund is in place to 
address big ticket maintenance needs that will emerge as the facility 
ages. NNSA provides no labor resources to maintain the facility or 
grounds which is solely the responsibility of the landlord. The private 
owner is incented to maintain the value of the property and preserve 
their overall capital investment independent of our tenancy.
    Mr. Cooper. How does NNSA evaluate the cost-benefit of public-
private partnerships over the lifetime of the facility? What lifetime 
is assumed?
    General Klotz. NNSA evaluates the proposals for compliance with OMB 
Circulars A-11 and A-94. The lifetime assumed is based on the 
Government's planned use of the building.
    Mr. Cooper. The total amount of NNSA's deferred maintenance backlog 
includes maintenance that NNSA does not plan to address for a variety 
of reasons (i.e., excess facilities). What amount of the deferred 
maintenance backlog does NNSA actually plan to address over the next 
five years? What factors are used to determine what deferred 
maintenance will or will not be addressed?
    General Klotz. The Fiscal Year (FY) 2017 President's Budget Request 
will enable NNSA to continue to halt the growth of deferred 
maintenance. NNSA has a project prioritization methodology that 
prioritizes annual investments by evaluating key criteria. Criteria 
evaluated include deferred maintenance reduction, program requirements, 
safety and programmatic risk reduction, and increases in operational 
efficiency and/or productivity.
    Mr. Cooper. Is the balance between recapitalization and maintenance 
appropriate? How do you balance necessary investments for maintenance 
with requirements to focus and invest in programmatic priorities 
including life-extension programs?
    General Klotz. The balance between maintenance and recapitalization 
is currently appropriate. NNSA has improved its infrastructure 
investment strategy by using the new budget structure approved by 
Congress, and enhancing decision-making through the implementation of 
new program management tools. NNSA also began requesting increased 
funding for Recapitalization and Maintenance projects starting in FY 
2015. These funding increases are essential steps in decreasing 
deferred maintenance, arresting the declining state of infrastructure, 
increasing enterprise productivity, improving safety, eliminating 
costly compensatory measures, and shrinking the NNSA footprint through 
the disposition of unneeded facilities. To balance maintenance 
investments with programmatic priorities, NNSA conducts a disciplined 
programming process integrating budgets across portfolios to ensure 
maintenance investments are consistent with, and support, the other 
programmatic work of the NNSA enterprise.
    Mr. Cooper. Naval Reactors also has a majority of its facilities 
dating back to Cold War-era with nearly 60% of its facilities now over 
50-70-plus years old, however these facilities are not in such a state 
of disrepair as some of the nuclear complex facilities are. To what do 
you attribute this difference?
    General Klotz. The role of nuclear weapons in our national security 
strategy is widely understood. However, the link between our nation's 
nuclear deterrence and the NNSA infrastructure that supports it is less 
well appreciated. As a result, investment in NNSA's infrastructure has 
generally not kept pace with the growing need to replace Cold War era 
facilities. Every year, NNSA works to balance the needs of all our 
vital missions with the need to maintain and modernize our 
infrastructure. Naval Reactors (NR) oversees four government-owned 
contractor-operated Department of Energy sites: Knolls Atomic Power 
Laboratory; Bettis Atomic Power Laboratory; Kenneth A. Kesselring Site; 
and the Naval Reactors Facility. These facilities' sole purpose is to 
support the nuclear Navy and NR provides Federal oversight for all 
aspects of the sites' operations. The single mission focus helps NR 
reconcile priorities and react accordingly when problems emerge due to 
the state of facilities and infrastructure. NR weighs facility and 
infrastructure resource decisions using the same rigorous process used 
for making technical resource decisions. NR reassesses its resource 
needs semi-annually and prioritizes these needs so that the sites' 
facility and infrastructure provide the necessary foundation on which 
technical work can be accomplished to support the nuclear fleet of 
today and tomorrow. However, NR is not immune to the effects of 
degrading facilities and infrastructure. For example, NR needs to 
replace the Expended Core Facility in Idaho, which is over 55 years 
old, does not meet current standards, and requires recapitalization. 
Over the past 10 years, NR has had to increase management attention and 
resource allocation to facilities and infrastructure and the trend is 
expected to continue.
    Mr. Cooper. What incentives does NNSA provide for its M&Os to 
sufficiently invest in maintenance? Are the proper incentives in place 
to avoid facilities falling into such disrepair until a new facility is 
required?
    General Klotz. As part of our Contractor Performance Evaluation 
Process (CPEP), NNSA incentivizes Management and Operating (M&O) 
contractors' performance via award fee. The CPEP process is a uniform, 
corporate process for evaluating NNSA M&O contractors' performance. The 
Fee Determining Official's (FDO) award fee determination is a 
unilateral decision made solely at the discretion of NNSA. M&O 
contractors are evaluated on maintaining, operating, and modernizing 
DOE/NNSA facilities, infrastructure, and equipment in an effective, 
energy efficient manner as part of the annual CPEP process. Starting in 
Fiscal Year (FY) 2016, M&O contractors are also evaluated on their 
progress to halt the growth of deferred maintenance and to disposition 
of unneeded infrastructure and excess hazardous materials. The same 
performance evaluation will continue in FY 2017.
    Mr. Cooper. What improvements in management and safety culture are 
necessary to avoid some of the problems we are now seeing, with parts 
of the ceiling falling down in some facilities? How did we get to this 
point? What is the plan to ensure that billions of dollars in new 
investment to recapitalize nuclear complex facilities do not suffer the 
same fate from lack of maintenance?
    General Klotz. NNSA is making improvements in management and safety 
culture and focusing attention and investments to sustain 
infrastructure by:
      Deploying new, risk-informed, data-driven management 
tools;
      Increasing funding for maintenance and recapitalization; 
and
      Linking award fees to safety and infrastructure 
performance.
    There is consensus amongst Department of Energy and NNSA 
stakeholders that the current state of NNSA's infrastructure presents a 
risk to our strategic deterrent and must be addressed with urgency, 
resources, and focus. To that end, NNSA established the Office of 
Safety, Infrastructure and Operations in January 2015 to ensure NNSA's 
infrastructure needs are adequately represented and necessary 
investments are made. At the Departmental level, the Secretary of 
Energy has established key groups comprised predominantly of senior 
career service professionals to sustain our current efforts. These 
groups include:
      The Laboratory Operations Board (LOB);
      The Infrastructure Executive Committee; and
      The Excess Contaminated Facilities Working Group.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. LARSEN
    Mr. Larsen. DOE's Real Property Asset Management contains 
infrastructure investment benchmarks for maintenance and 
recapitalization activities. To what extent does NNSA's fiscal year 
2017 budget request and associated Future Years Nuclear Security 
Program meet these benchmarks? If NNSA's budget request does not meet 
these benchmarks, please describe why.
    General Klotz. The Fiscal Year (FY) 2017 President's Budget Request 
is adequate for funding 2017 infrastructure-related activities.
    DOE uses findings from the National Academy of Sciences, Key 
Performance Indicators for Federal Facilities Portfolios: Federal 
Facilities Council Technical Report Number 147 (Washington, D.C.: 
2005). The findings suggest that 2% of Replacement Plant Value (RPV) 
should be invested annually for infrastructure in good condition. 
However, for infrastructure in poorer condition annual investments 
should be closer to 4% of RPV. NNSA's requested increase in Maintenance 
and Recapitalization funds for FY 2017 would put NNSA's investment at 
3.1% of RPV (up from 2% in FY 2015 and 2.5% in FY 2016). During times 
of constrained budgets, NNSA must balance budget limitations and risk 
across all its vital programs to optimize mission results. Although 
lower than the benchmark, NNSA's FY 2015 and FY 2016 Maintenance and 
Recapitalization prioritized infrastructure needs across the NNSA 
enterprise and invested in numerous, critical infrastructure 
improvements. The year-over-year investment increase from FY 2014 
enabled infrastructure investment planning and integration with 
operations
    The FY 2017 President's Budget Request will allow NNSA to:
      Increase investments in recapitalization and maintenance 
efforts to reduce safety and programmatic risk
      Transfer the Kansas City Bannister Federal Complex to the 
private sector for redevelopment (this will eliminate 2.93 million 
square feet of excess facilities)
      Increase buying power via strategic procurement of common 
building systems across the enterprise (e.g., roofs, HVAC)
    The FY 2017 President's Budget Request provides a balanced approach 
to continued NNSA infrastructure investments, as infrastructure is but 
one consideration in a broader portfolio of NNSA programmatic 
requirements.
    Mr. Larsen. NNSA is currently taking action to improve data needed 
to better prioritize infrastructure investment. Please describe the 
current implementation status of the BUILDER system NNSA is using to 
prioritize infrastructure investments. When fully implemented, please 
describe how the BUILDER system will allow NNSA to prioritize and 
oversee deferred maintenance investments while also allowing management 
and operating contractors the ability to complete needed work in a 
timely manner.
    General Klotz. NNSA's deployment of BUILDER is a three-year effort, 
occurring from FY 2015-FY 2018. It involves data for approximately 
6,000 assets which will include more than one million systems, 
components and sub-components. Progress to date includes:
      Migration of all current inventory and condition data;
      A peer review of all migrated data to ensure quality and 
consistency; and
      Development of an NNSA-specific Functionality Module, 
which measures a building's suitability to function as intended and 
required for the mission.
    By early 2018, NNSA will complete the following activities:
      Conduct physical assessments of remaining systems to 
populate inventory and condition data gaps;
      Perform Functionality Assessments;
      Integrate BUILDER into the infrastructure planning 
process;
      Calculate Deferred Maintenance, Repair Needs, and 
Replacement Plant Value using BUILDER and develop business rules;
      Develop an online NNSA BUILDER training; and
      Initiate the integration of BUILDER with site 
computerized maintenance management systems.
    Full implementation and sustainment of BUILDER will be achieved by 
early 2018. Upon full implementation, NNSA will continue working to 
integrate each site's computerized maintenance management system with 
BUILDER to achieve long-term sustainment. BUILDER is a web based 
software tool to help decide when, where, and how to best maintain, 
repair, and recapitalize infrastructure. Developed by the U.S. Army 
Corps of Engineers, BUILDER has been recognized by the National Academy 
of Sciences as a best-in-class practice for infrastructure management. 
BUILDER uses preexisting engineering data to predict facility and 
component conditions, prioritize maintenance work, and support analysis 
of different spending scenarios. BUILDER is the center of our risk-
informed, data-driven infrastructure investment strategy. Our plan is 
to use BUILDER to:
      Describe the condition of NNSA's infrastructure, the gaps 
in NNSA's infrastructure, and the risk to programs;
      Document the resources needed to restore and then sustain 
NNSA infrastructure;
      Determine the right projects to execute;
      Guide site maintenance plans; and
      Help to identify AMPs Asset Management Programs (AMP) 
like the Roof AMP (RAMP) and the Cooling and Heating AMP (CHAMP).
    Mr. Larsen. What does NNSA spend annually on surveillance and 
maintenance of excess facilities that will be transferred to EM in the 
future for D&D? How are these costs incorporated into NNSA's estimate 
of deferred maintenance?
    General Klotz. In Fiscal Year (FY) 2016 NNSA invested roughly $30 
million on the surveillance and maintenance of excess facilities that 
are known or suspected to meet the criteria for transfer to DOE's 
Office of Environmental Management (EM). Investments in surveillance 
and maintenance are made to address deferred maintenance and prevent 
deferred maintenance from accumulating. Once a facility becomes excess, 
the majority of deferred maintenance is removed from the backlog 
because NNSA no longer needs to conduct that maintenance as the 
facility is no longer needed for mission work. However, deferred 
maintenance will remain and/or accumulate on any systems required to 
maintain the facility in a safe, shutdown condition, such as fire 
suppression systems.
    Mr. Larsen. How does NNSA decide which excess facilities to 
transfer to EM first? Are risks and costs prominently factored into 
such decision-making so that annual maintenance costs, as well as 
lifecycle cleanup costs, can be minimized?
    General Klotz. NNSA has evaluated its excess facilities to 
determine those that pose the greatest risk and have identified several 
higher risk facilities we believe meet EM's conditions for transfer. 
However, EM is currently facing many competing regulatory and other 
compliance obligations, and performance challenges in some areas. As a 
result, EM is unable to D&D all of the excess facilities already 
transferred from other Program Secretarial Offices (PSOs) in a timely 
manner or to take in additional excess contaminated facilities from 
other PSOs in the foreseeable future. Until EM accepts an excess 
contaminated facility into its portfolio, the PSO is responsible for 
maintaining the excess facility in a safe condition. The information 
gathered by NNSA informed the recent effort by the Excess Contaminated 
Facilities Working Group (ECFWG) which is finalizing a report to 
Congress on its work, the Plan for Deactivation and Decommissioning of 
Nonoperational Defense Nuclear Facilities report to Congress. NNSA's 
highest risk facilities are being prepared for transfer, but are not 
ready yet. NNSA's primary concern continues to be the risk posed by 
these facilities to the public, workers, and the mission. Minimizing 
that risk in these facilities requires continual surveillance and 
maintenance.
    Mr. Larsen. What is the status of DOE's Excess Contaminated 
Facilities Working Group, and what are the key findings/recommendations 
from the group?
    General Klotz. The Excess Contaminated Facilities Working Group 
(ECFWG) developed and executed an enterprise-wide data collection 
effort to obtain updated cost and risk assessments to deactivate, 
decontaminate, decommission, and demolish excess facilities. The 
updated data from the working group was used to define the scope of the 
challenge and to identify options for how DOE may better prioritize 
excess facilities. The ECFWG is developing policies to institutionalize 
a corporate approach, and updating and validating data gathered by the 
working group's efforts. The group also is finalizing a report to 
Congress on its work, the Plan for Deactivation and Decommissioning of 
Nonoperational Defense Nuclear Facilities.

                                  [all]