Department of Energy: DOE Lacks an Effective Strategy for Addressing
Recommendations From Past Laboratory Advisory Groups (Testimony,
09/23/1998, GAO/T-RCED-98-274).

The Department of Energy (DOE) manages the largest laboratory system of
its kind in the world: 23 laboratories in 14 states, a combined budget
exceeding $10 billion a year, and a staff of about 60,000. Since the
early days of the World War II Manhattan Project, DOE's laboratories
have played a major role in maintaining U.S. leadership in research and
development. During the last 20 years, however, various advisory groups
have questioned DOE's stewardship of the laboratory complex, citing
management weaknesses. In recent years, Congress has held several
hearings on the future of the national laboratories. The September 1998
report, GAO/RCED-98-197, (1) identifies the recommendations by various
advisory groups for addressing management weaknesses at DOE and the
laboratories and (2) evaluates how DOE and its laboratories have
responded to these recommendations.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED-98-274
     TITLE:  Department of Energy: DOE Lacks an Effective Strategy for
	     Addressing Recommendations From Past Laboratory
	     Advisory Groups
      DATE:  09/23/1998
   SUBJECT:  Advisory committees
	     Energy research
	     Laboratories
	     Research and development facilities
	     Research program management
	     Strategic planning
	     General management reviews
	     Federal facilities
IDENTIFIER:  DOE Strategic Laboratory Missions Plan

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GAO/T-RCED-98-274

Before the Subcommittee on Basic Research and the Subcommittee on
Energy and Environment, Committee on Science, House of
Representatives

For Release
on Delivery
Expected at
10 a.m.  EDT
Wednesday
September 23, 1998

DEPARTMENT OF ENERGY - DOE LACKS
AN EFFECTIVE STRATEGY FOR
ADDRESSING RECOMMENDATIONS FROM
PAST LABORATORY ADVISORY GROUPS

Statement of Victor S.  Rezendes, Director,
Energy, Resources, and Science Issues,
Resources, Community, and Economic
Development Division

GAO/T-RCED-98-274

(141241)

Abbreviations
=============================================================== ABBREV

  DOE -
  R&D -

============================================================ Chapter 0

Messrs.  Chairmen and Members of the Subcommittees:

We are pleased to testify on the Department of Energy's (DOE)
management of its national laboratories.  In the past, we have
reported on how improved management is needed if DOE and the
laboratories are to successfully meet new mission responsibilities.
This statement is based on our report to the full committee.\1 The
objectives of our report were to

  -- identify the recommendations by various advisory groups for
     addressing management weaknesses at DOE and the laboratories and

  -- evaluate how DOE and its laboratories have responded to these
     recommendations.

In summary, Mr.  Chairman, we reported that for nearly 20 years, many
advisory groups have found that while DOE's national laboratories do
impressive research and development, they are unfocused, are
micromanaged by DOE, and do not function as an integrated national
research and development system.  These groups have made dozens of
recommendations ranging from improving strategic planning to
streamlining DOE's internal processes, and some have also suggested
major organizational changes in the way the laboratories are
directed.  While DOE has made some progress--principally by reducing
paperwork burdens on its laboratories--most of its actions in
response to past advisory groups are still under way or have unclear
outcomes.  DOE cannot show how its actions have resulted or may
result in fundamental change because they lack the objectives,
performance measures, and milestones needed to effectively track
progress and account for results.  We believe that without a strategy
for ensuring that reforms actually take place, DOE will make limited
progress in achieving meaningful reforms.  Additionally, DOE's
organizational weaknesses, which include unclear lines of authority,
are a major reason why the Department has been unable to develop
long-term solutions to the recurring problems reported by advisory
groups.

--------------------
\1 Department of Energy:  Uncertain Progress in Implementing National
Laboratory Reforms (GAO/RCED-98-197, Sept.  10, 1998).

   BACKGROUND
---------------------------------------------------------- Chapter 0:1

The missions of DOE's 23 laboratories have evolved over the last 55
years.  Originally created to design and build atomic bombs under the
Manhattan Project, these laboratories have since expanded to conduct
research in many disciplines--from high-energy physics to advanced
computing at facilities throughout the nation.  The missions have
expanded in the laboratories for many reasons, including changes in
the world's political environment.  Nine of DOE's laboratories are
multiprogram laboratories that account for about 70 percent of the
total laboratory budget and about 80 percent of all laboratory
personnel.  Three laboratories--Lawrence Livermore, Los Alamos, and
Sandia--conduct the majority of DOE's nuclear weapons defense
activities but have been substantially diversified in the wake of
reduced funding for nuclear weapons.

   CONCERNS RAISED BY PAST
   ADVISORY GROUPS
---------------------------------------------------------- Chapter 0:2

Despite the many studies identifying similar deficiencies in the
management of DOE's national laboratories, fundamental change remains
an elusive goal.  We identified nearly 30 reports by a wide variety
of advisory groups on various aspects of the national laboratories'
management and missions.  Most of these reports have been prepared
since the early 1980s.  The reports include the following:

  -- In 1982, DOE's Energy Research Advisory Board reported that the
     national laboratories duplicate private-sector research and that
     while DOE could take better advantage of the national
     laboratories' capabilities, it needed to address its own
     management and organizational inefficiencies, which hamper the
     achievement of a more effective laboratory system.\2

  -- In 1983, a White House Science Council panel found that while
     DOE's laboratories had well-defined missions for part of their
     work, most activities were fragmented and unrelated to the
     laboratories' main responsibilities.\3

  -- In 1992, DOE's Secretary of Energy Advisory Board found that the
     laboratories' broad missions, coupled with rapidly changing
     world events, had "caused a loss of coherence and focus at the
     laboratories, thereby reducing their overall effectiveness in
     responding to their traditional missions as well as new national
     initiatives .  .  ."\4

  -- A 1993 report by an internal DOE task force reported that the
     Department's missions "must be updated to support DOE's new
     directions and to respond to new national imperatives .  .  ."\5

The most recent extensive review of DOE's national laboratories was
performed by a task force chaired by Robert Galvin, former Chairman
of the Motorola Corporation.  Consisting of distinguished leaders
from government, academia, and industry, the Galvin Task Force was
established to examine alternatives for directing the laboratories'
scientific and engineering resources to meet the economic,
environmental, defense, scientific, and energy needs of the nation.
Its 1995 report identified many of the problems noted in earlier
studies, called for a more disciplined focus for the national
laboratories, and reported that the laboratories may be oversized for
their role.\6

DOE's Laboratory Operations Board was created in 1995 to focus the
laboratories' missions and reduce DOE's micromanagement of the
laboratories.  Members serving on the Board from outside DOE have
issued four different reports, which have noted the need to

  -- focus and define the laboratories' missions in relation to the
     Department's missions,

  -- integrate the laboratories' programmatic work, and

  -- streamline operations, including the elimination or reduction of
     administrative burdens on the laboratories.

--------------------
\2 The Department of Energy Multiprogram Laboratories:  A Report of
the Energy Research Advisory Board to the United States Department of
Energy (Sept.  1982).

\3 Report of the White House Science Council, Federal Laboratory
Review Panel, Office of Science and Technology Policy, Executive
Office of the President (May 20, 1983).

\4 Final Report, Secretary of Energy Advisory Board (1992).

\5 Changes and Challenges at the Department of Energy Laboratories:
Final Draft Report of the Missions of the Laboratories Priority Team
(1993).

\6 Alternative Futures for the Department of Energy National
Laboratories, Secretary of Energy Advisory Board Task Force on
Alternative Futures for the Department of Energy National
Laboratories, DOE (Feb.  1995).

   DOE LACKS AN EFFECTIVE STRATEGY
   FOR ADDRESSING ADVISORY GROUP'S
   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:3

Most of the actions DOE has taken in response to past advisory
group's recommendations are process oriented, incomplete, or only
marginally related to past recommendations for change.  DOE actions
include

  -- creating various internal working groups;

  -- strengthening the Energy Research and Development Council (R&D)
     to facilitate more effective planning, budgeting, management,
     and evaluation of the Department's R&D programs and to improve
     the linkage between research and technology development;

  -- increasing the use of private-sector management practices;

  -- adopting performance-based contracting and continuous
     improvement concepts;

  -- reducing unnecessary oversight burdens on laboratories;

  -- developing the Strategic Laboratory Missions Plan in July 1996
     that identified laboratory activities in mission areas;

  -- creating the Laboratory Operations Board, which includes DOE
     officials and experts from industry and academia, to provide
     guidance and direction to the laboratories; and

  -- developing "technology roadmaps," a strategic planning technique
     to focus the laboratories' roles.

According to DOE, its major effort to give more focus to laboratory
missions was a Strategic Laboratory Missions Plan, published in July
1996.  However, the plan is essentially a descriptive document that
does not effect change.  Nor does the plan tie DOE's or the
laboratories' missions to DOE's annual budget process.  Few
laboratory experts we consulted could show how the plan is used to
focus missions or integrate the laboratory system.

A second action that DOE officials reported as a major step toward
focusing the laboratories' missions is "technology roadmaps." DOE
describes roadmaps as planning tools that define the missions, goals,
and requirements of research on a program-by-program basis.  However,
some experts told us that it is too soon to tell if this initiative
will succeed.  Another expert was uncertain about just how the
roadmaps will work.  When we asked DOE officials about roadmapping,
we were told that it is still a work in progress and will not be
connected directly to the budget process for months or even years.

DOE's major organizational action in response to recent advisory
groups' recommendations was to create the Laboratory Operations Board
in April 1995.  The purpose of the Board is to provide dedicated
management attention to laboratory issues on a continuing basis.
While several experts we interviewed generally viewed the Board
positively, some recognized that the Board's limited advisory role is
not a substitute for strong DOE leadership and organizational
accountability.  One expert commented that the effectiveness of the
Board was diminished by the fact that it meets too infrequently
(quarterly) and has had too many changes in membership to function as
an effective adviser.  Other experts agreed but indicated that the
Board still has had a positive influence on reforming the laboratory
system.  One expert said that even though the Board monitors the
progress of reform and makes recommendations, it is still advisory
and cannot coordinate or direct specific actions.

When asked by DOE to comment on its actions earlier this year, some
laboratory directors raised questions about both the accuracy of
DOE's reported actions and their applicability to the laboratories.\7
For example, some laboratory officials believe little progress has
been made in meeting past recommendations intended to provide more
focus on the laboratories' missions as exemplified in the following
remarks:

     "[This] remains in the future.  We have seen nothing yet."

     ".  .  .  it is not clear that DOE has made as significant
     progress as the response implies .  .  ."

     "[The] tone of the response in [DOE's response] is a bit more
     optimistic than actual experience in the field justifies .  .  .
     Only modest improvements have occurred
     to this point .  .  .  "

     "No reorganization has occurred .  .  .  no integration has
     occurred."

     "The labs have largely been held at arm's length rather than
     included as part of the team.  There have been recent efforts to
     correct this but there is no plan or action in place to correct
     it."

Additionally, when we asked several laboratory officials for examples
of their progress in responding to past advisory groups, most spoke
of actions they have taken on their own initiative.  Few could cite
an example of a step taken in direct response to a DOE action.

DOE has not established a comprehensive plan with goals, objectives,
and performance measures or a system for tracking results and
measuring accountability.  As a result, DOE is unable to document its
progress and cannot show how its actions address the major issues
raised by the advisory groups.  Experts we contacted noted that while
DOE is establishing performance measures for gauging how well its
contractors manage the laboratories, DOE itself lacks any such
measurement system for ensuring that the objectives based on the
advisory groups' recommendations are met.

--------------------
\7 These comments were made on DOE's draft response to our request
for a listing of actions taken by the Department to address
recommendations from past advisory groups.

   ORGANIZATIONAL WEAKNESSES
   PREVENT FUNDAMENTAL REFORM
---------------------------------------------------------- Chapter 0:4

We, along with past advisory groups and internal DOE studies, have
often reported on DOE's complex organizational structure and the
problems in accountability that result from unclear chains of command
among headquarters, field offices, and the laboratories.  For
example, a 1997 DOE report stated that the

     "lack of clarity, inconsistency, and variability in the
     relationship between headquarters management and field
     organizations has been a longstanding criticism of DOE
     operations.  This is particularly true in situations when
     several headquarters programs fund activities at laboratories .
     .  ."\8

As a consequence of DOE's complex structure, the Institute for
Defense Analyses reported that unclear chains of command have led to
the weak integration of programs and functions across the Department;
wide variations among field activities, relationships and processes;
and confusion over the difference between line and staff roles.\9

Weaknesses in DOE's ability to manage the laboratories as an
integrated system of R&D facilities is one the most persistent
findings from past advisory groups, as well as from our 1995
management review of laboratory issues.\10 We concluded that DOE had
not coordinated the laboratories' efforts as part of a diversified
research system to solve national problems.  Instead, DOE was
managing the laboratories on a program-by-program basis.  We
recommended that DOE evaluate alternatives for managing the
laboratories that would more fully support the achievement of clear
and coordinated missions.  We also reported that if DOE is unable to
refocus the laboratories' missions and develop a management approach
consistent with these new missions, the Congress may wish to consider
alternatives to the present relationships between DOE and the
laboratories.  Such alternatives might include placing the
laboratories under the control of different agencies or creating a
separate structure for the sole purpose of developing a consensus on
the laboratories' missions.  Because of DOE's uncertain progress in
reforming the laboratories' management, we continue to believe that
the Congress may wish to consider such alternatives.

Further, we recommended that DOE strengthen the Office of Laboratory
Management to facilitate the laboratories' cooperation with DOE and
resolve management issues across DOE's program areas.  DOE did not
strengthen this office.  DOE's primary response to our
recommendations and those made by the Galvin Task Force was creating
the Laboratory Operations Board.

Experts we interviewed earlier this year cited DOE's complex
structure and lack of a strong central laboratory authority as
hindering the effective implementation of advisory groups'
recommendations.  The experts whom we consulted noted that DOE's
organizational weaknesses prevent reform, and that DOE has not been
responsive to recommendations for organizational changes and
improvements in reporting relationships.  According to these experts,
DOE's establishment of working groups to implement recommendations
can be helpful for guiding reform, but these groups often lack the
authority to make critical decisions or to enforce needed reforms.
One expert commented that "the current DOE organizational structure
is outdated .  .  .  there is no DOE leadership to implement
changes."

As far back as 1982, an advisory group recognized the need for a
strong central focus to manage the laboratories' activities.  In its
1982 report, DOE's Energy Research Advisory Board noted the "layering
and fractionation of managerial and research and development
responsibilities in DOE on an excessive number of horizontal and
vertical levels .  .  ."\11

The Board recommended that DOE designate a high-level official, such
as a Deputy Under Secretary, whose sole function would be to act as
DOE's chief laboratory executive.  Although DOE did not make this
change, the Under Secretary told us that he has assumed
responsibility for ensuring that laboratory reforms are accomplished.

We believe that DOE's organizational weaknesses are a major reason
why the Department has been unable to develop long-term solutions to
the recurring problems reported by advisory groups.  The absence of a
senior official in the Department with program and administrative
authority over the operations of all the laboratories prevents the
effective management of the laboratories on an ongoing basis.

--------------------
\8 DOE Action Plan for Improved Management of Brookhaven National
Laboratory, DOE (July 1997).

\9 The Organization and Management of the Nuclear Weapons Program,
Institute for Defense Analyses (Mar.  1997).

\10 Department of Energy:  National Laboratories Need Clearer
Missions and Better Management (GAO/RCED-95-10, Jan.  27, 1995).

\11 The Department of Energy Multiprogram Laboratories:  A Report of
the Energy Research Advisory Board to the United States Department of
Energy (Sept.  1982).

-------------------------------------------------------- Chapter 0:4.1

Messrs.  Chairmen, this concludes our statement.  We would be happy
to respond to any questions from you or Members of the Subcommittees.
*** End of document ***