Department of Energy: Views on DOE's Plan to Establish the National
Nuclear Security Administration (Testimony, 03/02/2000,
GAO/T-RCED-00-113).
This testimony is based on many reviews of the Department of Energy and
GAO's past and ongoing work on a wide range of DOE programs. GAO
provides its observations on DOE's Implementation Plan for the newly
created National Nuclear Security Administration, which is responsible
for the nation's nuclear weapons, nonproliferation, and naval reactors
programs.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-RCED-00-113
TITLE: Department of Energy: Views on DOE's Plan to Establish the
National Nuclear Security Administration
DATE: 03/02/2000
SUBJECT: Internal controls
Federal agency reorganization
Personnel management
Redundancy
Nuclear proliferation
Nuclear facility security
Strategic planning
Accountability
Reengineering (management)
IDENTIFIER: DOE Nuclear Weapons Program
DOE Stockpile Stewardship Program
DOE National Ignition Facility Program
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GAO/T-RCED-00-113
Mr. Chairman and Members of the Special Panel:
We are pleased to be here today to provide our observations on the
Department of Energy's (DOE's) Implementation Plan for the newly created
National Nuclear Security Administration (NNSA). In an act of the same name,
the Congress established NNSA as a semi-autonomous agency within DOE with
responsibility for the nation's nuclear weapons, nonproliferation, and naval
reactors programs. The agency was established to correct long-standing
management problems at DOE, which were most recently highlighted by major
security problems at its national laboratories. The law that established
NNSA also required that DOE develop an Implementation Plan to specifically
describe how DOE plans to carry out the provisions of the law and achieve
its objectives.
As you know, GAO and others have raised concerns over many years about
weaknesses in DOE's management structure and processes that have resulted in
security problems. Our testimony today is based on numerous reviews of DOE
and our past and ongoing work on a wide variety of DOE programs. In summary,
Mr. Chairman and Members of the Special Panel, the Implementation Plan
establishes a framework for the creation of the NNSA, but it is not really a
detailed roadmap that would position NNSA to correct DOE's longstanding
problems. DOE's Implementation Plan simply transfers many of DOE's historic
shortcomings to NNSA. In particular:
* NNSA's organizational structure does not establish clear lines of
authority or streamline the field structure.
* NNSA is taking a "business as usual" approach to planning, programming,
budgeting and securing skilled technical staff instead of affecting
needed change as part of the Implementation Plan.
* While NNSA was to be distinct from DOE, they have duplicative and
overlapping functions.
* Significant questions remain about the relationship between NNSA and
DOE's organizations that oversee NNSA and DOE's line management to
ensure effective security and environmental, safety, and health
programs.
Although we recognize that the Implementation Plan is just the first step in
an evolving process, we believe the best time to address these past problems
is when the organization and systems are being laid out for the first time,
before inefficiencies become second nature and commitments to old ways
harden. While NNSA is a new organization within DOE, it will be made up of
DOE and contractor employees. These employees have worked in a culture that
has led to the myriad of management problems that NNSA was created to
address. For the new organization to be more effective, it must break out of
the culture and mindset that permeates DOE. To do this, for example, DOE
must hold contractors as well as its employees more accountable for their
performance. Otherwise, problems inherent in DOE will continue in NNSA if
the DOE culture is carried to the new agency along with the activities and
personnel.
Background
Since its creation in 1977, DOE has conducted technically complex activities
at its facilities across the country. These activities include developing,
producing, and maintaining nuclear weapons; performing research and
development to enhance energy efficiency and develop innovative nuclear,
renewable, and other energy sources; and cleaning up environmental
contamination from its past weapons production operations. However, in
conducting these activities, DOE has a long history of problems that have
indicated a need for organizational and managerial improvement. DOE's
history of failures in managing major projects that are critical to its
mission have resulted in significant cost overruns, schedule delays, and
failure to complete and operate those projects. These problems continue with
the recent failure of the in-tank precipitation project at DOE's Savannah
River Site after cost overruns of nearly $400 million and a 10-year schedule
slippage and with cost overruns and schedule delays with the National
Ignition Facility project.
Over the past year, revelations that foreign countries obtained nuclear
weapons designs and classified information renewed concerns about DOE's
management of its nuclear weapons program. The underlying causes of these
problems have been the subject of advisory groups such as the Institute for
Defense Analyses and the President's Foreign Intelligence Advisory Board and
various internal DOE studies. In general, they too have identified basic
flaws in DOE: a complicated, dysfunctional organizational structure, an
unclear chain of command, and a lack of accountability. In particular,
unclear lines of authority throughout DOE have long resulted in weak
oversight of contractors and poor accountability for program management. For
years, DOE has failed to respond to reports that highlight these weaknesses.
To resolve these organizational and managerial weaknesses, several
reorganization options were proposed and studied over the years. For
example, in June 1999, the President's Foreign Intelligence Advisory Board
proposed a semi-autonomous nuclear agency within DOE with a streamlined
management structure and field operations. On October 5, 1999, the President
signed Public Law 106-65, the National Nuclear Security Administration Act.
This act created NNSA, a separately organized agency within DOE. As required
by the law, in January 2000, DOE issued its Implementation Plan for the
creation of NNSA.
The Implementation Plan calls for three program offices within NNSA-Defense
Programs, Defense Nuclear Nonproliferation, and Naval Reactors. The Plan
sets up support offices and the field office organization. In terms of
support, NNSA will have an Office of the Administrator, a General Counsel,
an Office of Defense Nuclear Counterintelligence, an Office of Defense
Nuclear Security, an Office of Personnel and Administrative Services, and an
Office of Environment, Safety and Health. While some of DOE's field
offices--Albuquerque and Nevada--will be part of NNSA, others--Oakland, Oak
Ridge, and Savannah River--will not. However, a number of NNSA activities
are performed at the field offices that are not part of NNSA or managed
through these offices. Overall, the Implementation Plan establishes a
structure quite similar to DOE's.
NNSA'S Organizational Structure Does
Not Establish Clear Lines of Authority
Or Streamline the Field Structure
One reason for NNSA's establishment was to correct the confused lines of
authority and responsibility within DOE's nuclear weapons complex that
contributed to a wide variety of problems at the Department such as cost
overruns and schedule slippages on large projects and security lapses.
However, the Implementation Plan lays out an organizational structure for
the NNSA programs that is virtually the same as it was for these programs
before the agency was established.
Past advisory groups, internal DOE studies, and GAO have reported over the
years on DOE's dysfunctional structure, with unclear chains of command among
headquarters, field offices, and contractors. The following are examples:
* A 1997 DOE internal study noted a "lack of clarity, inconsistency, and
variability in the relationship between headquarters management and
field organizations. This is particularly true in situations when
several headquarters programs fund activities at laboratories."
* A congressionally mandated 1997 study by the Institute for Defense
Analyses addressed DOE's organizational structure by criticizing DOE's
Defense Programs for having two "headquarters" offices--one in
Washington and one in Albuquerque. This has resulted in confusion over
who sets policy and duplication of management functions.
* We reported on the consequences of organizational confusion and
accountability lapses at the Brookhaven National Laboratory (N.Y.) in
1997. The Secretary of Energy at the time-Frederico Pe�a-fired the
contractor operating the laboratory when he learned that the contractor
had breached the community's trust by failing to ensure that the
laboratory could operate safely. DOE's own oversight report on
Brookhaven concluded that the Department did not have a clear chain of
command over environment, safety, and health matters and, as a result,
environmental problems were allowed to go uncorrected.
Unfortunately, the Implementation Plan does little to address these
problems. The reporting authority and chain of command for nuclear matters
is the same as it was before NNSA was established. The Implementation Plan
simply moves DOE's Defense Programs and the field offices that were
associated with Defense Programs to NNSA. This means that the Los Alamos
National Laboratory (N. Mex.) and the Sandia National Laboratory (N. Mex.)
will report through the Albuquerque Operations Office to NNSA's Deputy
Administrator for Defense Programs. This still puts the operations office in
the chain of command, continuing to blur who is accountable. A more
complicated situation will exist for NNSA programs at Savannah River, Oak
Ridge, and Oakland. They will report through Operations Offices that are not
part of the NNSA field structure. For example, personnel working on NNSA
activities at the Lawrence Livermore National Laboratory (Calif.) will
report administratively to the Oakland Operations Office that is responsible
to DOE's Office of Science. However, nuclear activities at Lawrence
Livermore National Laboratory will be programmatically a part of NNSA and
operated by NNSA employees. This situation continues the problem of
laboratory and facility contractors--and the field offices that oversee
them--receiving funding, program direction and oversight from different
headquarters offices, which sometimes have potentially conflicting missions.
It is not clear how reporting through an Operations Office that will now
have to deal with at least two "bosses"-NNSA and the Office of
Science--provides the mission focus and streamlined structure that was
envisioned with the establishment of NNSA.
Other Management Weaknesses
Also Not Addressed
* The establishment of NNSA was also intended to improve management
practices. However, in the areas of planning, programming and
budgeting; upgrading the technical competence of its staff; and
procurement; DOE's implementation plan does little to make
improvements.
* The NNSA Act directed the NNSA Administrator to establish procedures to
ensure that NNSA's management systems--planning, programming, and
budgeting--are sound. The Implementation Plan pays only minimal
attention to this requirement and adopts in whole the existing
planning, programming, and budgeting mechanisms of DOE, arguing that
these mechanisms are functioning well. However, recent DOE studies
identify weaknesses in its planning, programming, and budgeting and
highlight where improvements are needed.
With respect to planning, in the National Defense Authorization Act for
fiscal year 1997, the Congress required the Defense Programs Office to
conduct a study of how it managed the nuclear weapons program. This study,
often called the 120-day study, pointed out, among other things, that while
the Stockpile Stewardship Program represented a well-articulated vision for
dealing with the stockpile, it lacked sufficient high-level planning and
guidance. Two years later, the 30-day review of DOE's November 1999
Stockpile Stewardship Program noted that while improvements had been made to
the program's planning process through the introduction of the "campaigns"
approach, more work was required to improve this process, especially with
respect to requirements and priority setting. DOE's "campaigns" are
technically challenging, multi-year efforts designed to develop and maintain
specific critical capabilities needed to achieve weapons stockpile
certification confidence.
In the area of programming, the fiscal year 1999 report of another
congressionally mandated panel-the Panel to Assess the Reliability, Safety,
and Security of the United States Nuclear Stockpile-found that certain
programs that were key to maintaining a reliable stockpile needed
high-priority attention. In particular, the Panel cited (1) future nuclear
parts production, (2) archiving the results of previous nuclear test
experience, and (3) maintaining and improving the surveillance of nuclear
weapons as programs needing management's attention.
In the area of budgeting, the 30-day review noted that the process for
generating program requirements needed significant attention. Program
requirements are the drivers that determine what parts of the nuclear
weapons stockpile will be refurbished and at what cost. The study found that
DOE's lack of a process for assessing program requirements, developing
implementation plans, and setting priorities has caused significant stress
on the program.
The law that created NNSA also provided mechanisms for NNSA to restructure
and improve the technical competence of its staff. It provides hiring and
salary flexibility for, among other things, 300 positions for scientific,
engineering, and technical staff. These positions, coupled with the hiring
flexibility, could assist NNSA in addressing some long-standing issues
concerning the lack of technical capability. For example, in numerous
reports, we and others have concluded that the lack of DOE personnel with
such technical skills as project and contract management have led to poorly
managed projects that are late and over budget.
In addition, several studies, including the March 1999 report of the
Commission on Maintaining United States Nuclear Weapons Expertise, have
pointed to the need to deal comprehensively with a personnel challenge
before it reaches crisis proportions by the end of this decade. The
challenge is the aging of the experienced designers and engineers who built
the weapons and understand how they work. While the 300 positions could be
used to increase the technical competence of NNSA's workforce, the
Implementation Plan offers no insight into how NNSA will use these
positions.
In accordance with the NNSA Act, NNSA's Administrator is also the agency's
Senior Procurement Executive. The Procurement Executive is an agency's head
authority on procurement and manages the agency's acquisition regulations,
workforce, and acquisition process. However, DOE's Implementation Plan for
NNSA does not discuss how DOE's Procurement Executive and NNSA's
Administrator will interface. As a result, it is not clear if the
Administrator will write NNSA acquisition regulations and policies for NNSA
that differ from those of DOE or whether the Administrator will adopt DOE's
acquisition regulations. Since at times NNSA and DOE will be using the same
contractors, NNSA and DOE could end up with different acquisition
regulations and policies being applied to the same contractor. Clear
guidance and sound oversight of contracting practices are of particular
concern to us, given our past work on DOE's contracting-we have designated
it as a "high risk" area because of DOE's history of weak oversight of
contractors and its heavy reliance on contractors to fulfill its missions.
NNSA and DOE Have
Overlapping Functions
NNSA was established as a semi-autonomous agency that was to be distinct
from DOE. To clearly show the separation of NNSA management from DOE's
organization, the Act laid out chains of command in both DOE and NNSA that
would insulate NNSA from DOE management and decision making, except at the
level of the NNSA Administrator. This is because the Administrator is under
the immediate authority of the Secretary. However, the Implementation Plan
fills numerous key positions within NNSA with DOE officials-thus, these
officials have DOE and NNSA responsibilities and have been dubbed
"dual-hatted."
The Implementation Plan calls for dual-hatting of virtually every
significant statutory position, including the Deputy Administrators for
Defense Programs and Nuclear Nonproliferation. Other dual-hatted positions
include: the Directors of NNSA's Office of Defense Nuclear Security, Office
of Defense Nuclear Counterintelligence, Office of Emergency Operations, the
General Counsel and Deputy General Counsel, and Field Office Managers in
charge of the Oak Ridge, Savannah River, and Oakland offices. The Field
Office Managers will supervise employees and functions that were
specifically transferred to NNSA by the Act and will also supervise
employees and functions that report to elements of DOE.
The Implementation Plan explains that the "dual-hatted" positions were
established to ensure consistent policy implementation, to ensure seamless
DOE and NNSA responses to emergencies, and, in the case of the field
managers, to assure that the managers have adequate authority to oversee and
manage all activities at a facility. However, in our view, officials holding
similar positions concurrently in DOE and NNSA is contrary to the
legislative intent behind the creation of NNSA as a separate entity within
DOE. Moreover, to reinforce the two separate channels of management, the Act
states that no NNSA officer or employee shall be responsible to, or subject
to the authority, direction, or control of any DOE officers or employees
other than the Secretary and the Administrator.
Whether DOE and NNSA have dual-hatted managers or not, the Implementation
Plan does not clearly define how the field office managers that are
responsible for both NNSA and DOE activities will operate. Furthermore,
whether NNSA security officials will establish their own set of policies and
procedures is not clear. As a result, these Field Office Managers, who are
responsible for NNSA and DOE programs, could implement two sets of policies
and procedures. Additional complications could ensue from NNSA employees
supervising DOE employees in the Albuquerque and Nevada Operations Offices,
which the Implementation Plan assigned to NNSA.
Role of Oversight
Organizations Is Unclear
The Implementation Plan's discussion of the role of the existing DOE
organizations that oversee such areas as environment, safety, and health and
safeguards and security is unclear, and significant questions remain. The
Implementation Plan states that these oversight organizations, as well as
the Inspector General, will remain in DOE. According to the Implementation
Plan, the oversight organizations will continue to review all DOE sites and
activities and will report their findings and recommendations to the
Secretary. How the recommendations are handled, however, is not clear. For
example, DOE's safeguards and security oversight organization, the Office of
Independent Oversight and Performance Assurance, has raised concerns that
unless specifically directed by the Secretary, NNSA is not required to act
on oversight findings and recommendations. The Office of Independent
Oversight and Performance Assurance is attempting to change DOE Order 470.2,
"Safeguards and Security Independent Oversight Program," to require NNSA to
correct safeguards and security problems identified during the Office of
Independent Oversight and Performance Assurance's inspections. However,
while amending the order may require NNSA to act on findings and
recommendations from that office, it will not fix the problems for other
oversight offices, such as the office overseeing environment, safety, and
health. Additionally, depending on how the order is changed, such a
requirement may contradict the provisions in the Act that prohibit NNSA
personnel from being subject to the authority, direction, or control of any
DOE staff other than the Secretary and the Administrator.
The day-to-day working relationship between oversight organizations and NNSA
is also unclear. For example, the Office of Independent Oversight and
Performance Assurance inspects DOE facilities and when safeguards and
security problems are found, works with the operating contractor at the
facility in developing a corrective action plan. The Implementation Plan
provides no guidance on whether such relationships between oversight
organizations and NNSA should continue to exist.
- - - - -
Our work was performed during February 2000 in accordance with generally
accepted government auditing standards. Mr. Chairman, this concludes my
testimony. We would be happy to respond to any questions that you or Members
of the Special Panel may have.
(141417)
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