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i 

87–857 2015

[H.A.S.C. No. 113–94] 

INTERIM REPORT OF THE ADVISORY 

PANEL ON THE GOVERNANCE OF 

THE NUCLEAR SECURITY ENTERPRISE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON STRATEGIC FORCES 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

MARCH 26, 2014 
(II) 

SUBCOMMITTEE ON STRATEGIC FORCES 

MIKE ROGERS, Alabama, Chairman 

TRENT FRANKS, Arizona 

DOUG LAMBORN, Colorado 

MIKE COFFMAN, Colorado 

MO BROOKS, Alabama 

JOE WILSON, South Carolina 

MICHAEL R. TURNER, Ohio 

JOHN FLEMING, Louisiana 

RICHARD B. NUGENT, Florida 

JIM BRIDENSTINE, Oklahoma 

JIM COOPER, Tennessee 

LORETTA SANCHEZ, California 

JAMES R. LANGEVIN, Rhode Island 

RICK LARSEN, Washington 

JOHN GARAMENDI, California 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

ANDRE ́ CARSON, Indiana 

MARC A. VEASEY, Texas 

DREW WALTER, Professional Staff Member 

LEONOR TOMERO, Counsel 

ERIC SMITH, Clerk 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2014 

Page 

HEARING: 

Wednesday, March 26, 2014, Interim Report of the Advisory Panel on the 

Governance of the Nuclear Security Enterprise ................................................ 1 

APPENDIX: 

Wednesday, March 26, 2014 ................................................................................... 27 

WEDNESDAY, MARCH 26, 2014 

INTERIM REPORT OF THE ADVISORY PANEL ON THE GOVERNANCE 

OF THE NUCLEAR SECURITY ENTERPRISE 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Cooper, Hon. Jim, a Representative from Tennessee, Ranking Member, Subcommittee on Strategic Forces ............................................................................ 2 

Rogers, Hon. Mike, a Representative from Alabama, Chairman, Subcommittee 

on Strategic Forces ............................................................................................... 1 

WITNESSES 

Augustine, Norman, Cochairman, Advisory Panel on the Governance of the 

Nuclear Security Enterprise ................................................................................ 2 

Mies, ADM Richard W., USN (Ret.), Cochairman, Advisory Panel on the 

Governance of the Nuclear Security Enterprise ................................................ 5 

APPENDIX 

PREPARED STATEMENTS: 

Augustine, Norman, joint with ADM Richard W. Mies ................................. 33 

Rogers, Hon. Mike ............................................................................................ 31 

DOCUMENTS SUBMITTED FOR THE RECORD: 

Background material submitted by Mr. Cooper ............................................. 51 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Ms. Sanchez ...................................................................................................... 81 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

Mr. Cooper ........................................................................................................ 93 

Mr. Rogers ......................................................................................................... 85 

Ms. Sanchez ...................................................................................................... 98 

(1) 

INTERIM REPORT OF THE ADVISORY PANEL ON THE 

GOVERNANCE OF THE NUCLEAR SECURITY ENTERPRISE 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SUBCOMMITTEE ON STRATEGIC FORCES, Washington, DC, Wednesday, March 26, 2014. 

The subcommittee met, pursuant to call, at 10:04 a.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. This hearing of the Strategic Forces Subcommittee 

of the House Armed Services Committee will come to order. 

I want to thank everybody for being here and say hello to our 

witnesses. Appreciate you being here and taking the time to prepare for this hearing. I know this takes a lot of time, but it matters 

to us, it makes a big difference, and we appreciate you. 

Today’s topic—well, our hearing is a topic that is very familiar 

to those who have followed the subcommittee’s work over the past 

several years: governance and management problems at the Department of Energy [DOE] and specifically the National Nuclear 

Security Administration [NNSA]. Today we will hear about the ongoing work of the Advisory Panel on the Governance of the Nuclear 

Security Enterprise. This advisory panel was created by the fiscal 

year 2013 National Defense Authorization Act [NDAA] to take a 

look at the long-standing problems within our nuclear system—nuclear security enterprise’s system of management and oversight. 

Our witnesses today are the distinguished cochairs of that panel, 

Admiral Richard Mies, U.S. Navy (retired), and Mr. Norman Augustine, former chairman and CEO of Lockheed Martin. I want to 

thank you both for your service and for being here. I understand 

that your testimony will focus on the panel’s fact-finding efforts to 

date and provide us with a comprehensive illustration of the challenges we are facing. 

This subcommittee has been looking into these problems for quite 

a long time, but I believe you will help us clarify and assess the 

problems and why efforts to remedy them have failed. 

In creating this advisory panel, Congress highlighted that, quote, 

‘‘There is a widespread recognition that the current system for governance, management, and oversight of the nuclear security enterprise is broken,’’ close quote. As the fiscal year 2013 NDAA conferees stated, Congress believes, quote, ‘‘the status quo is not work-
2 

ing and must not be continued,’’ close quote, and that changes on 

the margins are not a solution. 

Recognizing that the nuclear security enterprise is broken and 

that previous efforts for the reform have failed, Congress looks to 

your panel’s final report for innovative solutions to these longstanding problems. Importantly, such solutions must not be dependent upon personalities or individuals to be successful and must 

not repeat the mistakes of the past. 

For this hearing, let’s ensure we all leave here with a full, clear 

understanding of the magnitude and complexity of the issues facing 

the enterprise as well as the national security imperative of getting 

this right. 

Thank you again to the witnesses, I look forward to your discussion. 

[The prepared statement of Mr. Rogers can be found in the Appendix on page 31.] 

Mr. ROGERS. And with that, I would like to turn over the microphone to the ranking member, my friend from Tennessee, Mr. Cooper. 

STATEMENT OF HON. JIM COOPER, A REPRESENTATIVE FROM 

TENNESSEE, RANKING MEMBER, SUBCOMMITTEE ON STRATEGIC FORCES 

Mr. COOPER. Thank you so much, Mr. Chairman. I too would like 

to welcome our distinguished witnesses today. I appreciate their 

long service to our Nation and in particular their chairing of this 

very important commission to figure out how to improve the work 

of the NNSA. 

I have no opening statement, Mr. Chairman, but I would like to 

ask unanimous consent that I insert some background material for 

the hearing record. 

Mr. ROGERS. Without objection, so ordered. 

[The information referred to can be found in the Appendix beginning on page 51.] 

Mr. COOPER. Thank you, appreciate it. Thank you, Mr. Chairman. 

Mr. ROGERS. I would now ask each of our witnesses to make an 

opening statement. We will start with Admiral Mies. Oh, with Mr. 

Augustine. The microphone is yours, sir. 

STATEMENT OF NORMAN AUGUSTINE, COCHAIRMAN, ADVISORY PANEL ON THE GOVERNANCE OF THE NUCLEAR SECURITY ENTERPRISE 

Mr. AUGUSTINE. Thank you, Mr. Chairman. I have an opening 

statement that runs about 8 or 9 minutes. If the 5-minute rule is 

in place, I can shorten it. 

Mr. ROGERS. Go ahead, deliver the whole thing if you would like 

to. 

Mr. AUGUSTINE. Thank you very much, Mr. Chairman and ranking member. 

Mr. ROGERS. Your microphone is not on. 

Mr. AUGUSTINE. I never was good at engineering. 

Thank you very much for the opportunity to present the findings 

to date of the Congressional Advisory Committee on the Govern-
3 

ance of the Nuclear Security Enterprise. And, as you know, Admiral Rich Mies and I have served as the cochairmen. And Congress 

tasked our panel, to broadly examine the performance of the nuclear security enterprise and to consider alternatives. 

Let us state at the outset that the current viability of our nuclear 

deterrent is not in question. At the same time, the existing governance structures and practices are most certainly inefficient and in 

some instances ineffective, putting the entire enterprise at risk 

over the longer term. 

During the past 5 months the panel has focused attention on the 

National Nuclear Security Administration, or NNSA as we know it, 

both in the headquarters and the field, including the laboratories 

and production plants and the Nevada National Security Site. We 

have also examined the current situation from the perspective of 

the national leadership in the legislative and executive branches 

and from the perspective of customers such as the NNSA, the DOD 

[Department of Defense], State, Intelligence Community, Department of Homeland Security. We have benchmarked NNSA against 

proven management approaches used by high-performing, hightechnology organizations, both in the private sector and in government. 

The panel’s work has relied on our 12 members’ decades of experience of a broad scope, dealing with nuclear enterprise issues. We 

have reviewed thousands of pages of previous studies, we have conducted on-site visits to numerous installations, and we have benefited from the testimony of dozens of expert witnesses, and we particularly appreciate the engagement of our colleagues on the panel 

as well as the candor of those that we have interviewed. 

Today we will summarize our panel’s findings on the current 

health of the NNSA and the root cause of the challenges we will 

cite. We are only now beginning to formulate our recommendations 

that we will provide in our final report. Unfortunately, the unmistakable conclusion of our fact-finding is that, as implemented, the 

NNSA experiment involving creation of a semi-autonomous organization has failed. The current DOE–NNSA structure has not established the effective operational system that Congress appears to 

have intended. This needs to be fixed as a matter of priority, and 

these fixes will not be simple or quick, and they need to recognize 

the systemic nature of the problem. 

Despite the flaws that we have found, there are numerous examples of successes in NNSA’s endeavors. To date Science-Based 

Stockpile Stewardship has succeeded in sustaining confidence in 

our nuclear deterrent. Unmatched technological innovation on the 

part of NNSA’s scientists and engineers has produced a dramatically increased understanding of our aging nuclear weapons stockpile. The labs and plants are providing solid support to nonproliferation efforts and unique expertise to the Intelligence Community. NNSA’s Naval Reactors organization continues to provide 

world-class performance in the development and the support of the 

most capable naval nuclear propulsion systems to be found in the 

world. 

But, NNSA as a whole continues to struggle to meet fundamental 

commitments. To the point, it has lost credibility and the trust of 

the national leadership and customers in DOD that it can deliver 
4 

weapons and critical nuclear facilities on schedule and on budget. 

Simply stated, there is no plan for success with available resources. 

NNSA is on a trajectory towards crisis unless strong leadership arrests the current course and reorients its governance to better focus 

on mission priorities and deliverables. 

At the root of the challenges are complacency and a loss of focus 

of the nuclear mission by the Nation and its leadership following 

the end of the Cold War, and although the national leadership has 

provided strong policy statements and substantial sums of money 

to the enterprise, it is evident that follow-through has been insufficient. The Congress’ current focus on the issue is a welcome development. 

Over the decades this changed situation has translated into the 

absence of a widely accepted understanding of and appreciation for, 

the role of nuclear weapons and nuclear technology in the 21st century, with the resultant well-documented and atrophied conditions 

of plants and plans for our strategic deterrent future. That is it 

with DOD as well as in DOE. Within the nuclear enterprise, this 

has been reflected as a lack of urgency and a respect for the compelling mission that it faces. 

As earlier reviews have concluded and this panel endorses, this 

is no time for complacency about the nuclear deterrent. America’s 

deterrent forces remain of the utmost importance. They provide the 

ultimate guarantee against major war and coercion. Further, our 

allies depend on these forces and capabilities for extended deterrence and could well pursue their own nuclear capabilities if they 

perceive that the U.S. commitment or competency is waning. 

Other countries carefully measure U.S. resolve and technological 

might, in making their own decisions about proliferation and nuclear force sizing. U.S. leadership in nuclear science is something 

we cannot afford to lose. We, along with our allies, are in a complex 

nuclear age, with several nuclear powers modernizing their arsenals, new nuclear technologies emerging, the potential new actors 

as well as regional challenges raising significant concerns. This 

would be a dangerous time to stumble. 

Furthermore, reform will be required to shape an enterprise that 

meets all of the Nation’s needs and rebuilds the essential infrastructure that is required. But while the technical work is rocket 

science, the management and cultural issues are not. In the case 

of the latter, however, the situation is not easily rectified. What is 

needed, is to issue clear plans and provide sufficient resources for 

success, assign and align responsibility along with the necessary 

authority and consequences and provide strong, accountable leadership and management at all levels focused on the mission. The 

panel believes such reform is possible, but it will demand determined and sustained high-level leadership. 

The changes we will recommend undoubtedly will be difficult to 

implement, regardless of where the enterprise is located within the 

government structure, since the fundamental problems are cultural 

more than organizational. Organizational change, while not unimportant, is only a small portion, the easy portion of the revisions 

that must be made. Previous efforts to reform and previous studies 

calling for action have largely failed due to the lack of leadership 

follow-through, the lack of accountability for enacting change and, 
5 

we might add, the lack of effective sustained top-level demand for 

change from the national leadership. 

The Department of Energy by itself would be challenged to oversee the radical steps that will be needed. Success is imaginable 

only with a strong and active engagement of a knowledgeable Secretary, supported by the White House and the Congress and a 

structure that removes impediments and that aligns to mission priority. The panel believes that the enterprise today benefits immensely from the political leadership of an engaged Secretary of 

Energy and the strong science and engineering of the national laboratory system. 

Each successive administration since that of President Eisenhower has reaffirmed the need to maintain a credible nuclear deterrent that is safe, secure, and reliable, but sustained national 

commitment and focus on the entirety of the mission of the enterprise charged with its execution has been lacking since the end of 

the Cold War, as evidenced by the condition in which the enterprise finds itself today. 

DOE and the NNSA have failed to act with a sense of urgency 

at obvious signs of decline in key areas. Five systemic disorders 

have taken root that we found to be at the heart of the program— 

problem. 

And with your permission, Mr. Chairman and members of the 

committee, Admiral Mies will briefly outline these issues. 

[The joint prepared statement of Mr. Augustine and Admiral 

Mies can be found in the Appendix on page 33.] 

Mr. ROGERS. Thank you, Mr. Augustine. 

Admiral Mies, you are recognized. 

STATEMENT OF ADM RICHARD W. MIES, USN (RET.), COCHAIRMAN, ADVISORY PANEL ON THE GOVERNANCE OF THE NUCLEAR SECURITY ENTERPRISE 

Admiral MIES. Chairman Rogers and Ranking Member Cooper, 

let me add my thanks as well for being here today. 

My remarks are intended to provide some specifics on the panel’s 

findings within the context of my cochair’s overall characterization 

of the health surrounding the enterprise. 

Our panel has identified five systemic disorders which result 

from the fundamental causes outlined in Norm’s preceding testimony. The causes and the disorders are inseparable. Most, if not 

all, of these disorders can be traced back to national complacency, 

the lack of a compelling national narrative and a widely accepted 

understanding regarding the role of our nuclear deterrent in this 

century. 

Today I would like to offer a synopsis of our panel’s key findings, 

specifically focusing on the five systemic disorders we have identified. 

First, a loss of sustained national leadership focus. Since the end 

of the Cold War we have experienced significant erosion in our 

abilities to sustain our nuclear deterrent capabilities for the long 

term. The atrophy of our capabilities has been well documented in 

numerous reports over the past decade. The fundamental underlying cause of this erosion has been a lack of attention to nuclear 
6 

weapon issues by senior leadership, both civilian and military, 

across both past and present administrations and Congresses. 

This lack of attention has resulted in public confusion, congressional distrust, and a serious erosion of advocacy, expertise, and 

proficiency, in the sustainment of these capabilities. Absent strong 

national leadership, NNSA as well as the whole national security 

enterprise has been allowed to muddle through. First and foremost, 

we must consolidate and focus national level support. 

Second, a flawed DOE–NNSA governance model. The current 

NNSA governance model of semi-autonomy is fundamentally 

flawed. NNSA has not established effective leadership, policy, culture, or integrated decisionmaking. Indeed, the design and implementation of NNSA governance has led to numerous redundancies, 

confused authorities, and weakened accountability. 

Third, a lack of sound management principles. NNSA and the associated policy-setting and oversight organizations within DOE reflect few of the characteristics of successful organizations. An entrenched risk-averse bureaucracy lacks a shared vision for and unified commitment to mission accomplishment, and hence they don’t 

act as a team. Both DOE and NNSA lack clearly defined and disciplined exercise of roles, responsibilities, authorities, and accountability aligned to NNSA’s mission deliverables. 

Too many people can stop mission essential work for a host of 

reasons, and those who are responsible for getting the work done 

often find their decisions ignored or overturned. Chains of command are not well defined, and resources are micromanaged. Personnel management and development programs, issue resolution 

processes, and deliverable aligned budgets are deficient. Shortfalls 

in project management and cost estimating are well documented 

and acute. 

Fourth, there is a dysfunctional relationship between NNSA, the 

Federal workforce, and their management and operations [M&O] 

partners. The trusted partnership that historically existed between 

the laboratories and DOE–NNSA headquarters has eroded over the 

past two decades to an arm’s length customer-to-contractor adversarial relationship leading to a significant loss in the benefits of the 

federally funded research and development centers, the FFRDC 

model. The trust factor essential to this model and underscored by 

a recent National Academies study results from unclear accountability for risk, a fee structure and contract approach that invites 

detailed transactional compliance-based oversight rather than a 

more strategic approach with performance-based standards. 

Additionally, atomized budget and reporting lines also confound 

effective and efficient programmatic management and further 

erode any sense of trust, and additionally there is no enterprisewide approach. While there are examples where the relationship 

has improved, such as the Kansas City Plant, overall, this government-to-M&O ‘‘partnership’’ remains highly inefficient and in many 

cases, severely fractured. 

Fifth and finally, there is uneven collaboration with NNSA customers. NNSA’s relationship—this issue deals primarily with 

issues we have identified mainly with the DOD weapons customers. There is no affordable, executable joint DOD–DOE vision, 

plan, or program for the future of nuclear weapons capabilities. 
7 

This is at once a cultural and communications divide, but there 

is also a fundamental lack of mechanisms to ensure that requisite 

collaboration and consensus to address core mission requirements. 

Other customers appear to be satisfied, but here too a more strategic approach could strengthen capabilities and the services that 

NNSA provides. 

In conclusion, lasting reform requires aggressive action and sustained implementation in all five of these areas, but national leadership engagement is really the common theme. Improvement is 

possible, but it will demand strong leadership and proactive implementation of the panel’s recommendations by the President, the 

Congress, and an engaged Department of Energy Secretary. 

Thank you for your time, and we look forward to your questions. 

[The joint prepared statement of Admiral Mies and Mr. Augustine can be found in the Appendix on page 33.] 

Mr. ROGERS. Thank you both for those remarks. 

Admiral, did you and your staff get the impression when they 

were interacting with folks at the various levels, that they have a 

morale problem? I get the impression that they have, they are cognizant that they have got problems, but has it affected morale in, 

in a serious way? 

Admiral MIES. Well, I think across the complex you see a number 

of morale problems, and that is reflected not just within NNSA and 

the M&O contractors, but you also see it on the DOD side in many 

cases. You are witnessing a, a number of investigations associated 

with morale problems within the ICBM [intercontinental ballistic 

missile] force. 

That clearly was not part of our charter, but, yes, I think certainly there are morale issues. We did receive a copy of a recent 

cultural study that was done within DOE and NNSA, and again 

that identified a number of morale and cultural issues that I think 

affect performance of the organization. 

Mr. ROGERS. Mr. Augustine, you were the CEO of a very large 

corporation. If you were to give some advice to or if you were to 

take the reins of NNSA, what sort of initial actions should that 

new administrator employ, to demonstrate the seriousness of his or 

her approach to this new endeavor, that would send the message 

up and down the food chain within an organization that you are 

serious about changing the culture, which is what I am hearing 

from you all is it is really a cultural problem there. So give us an 

organizational lesson. 

Mr. AUGUSTINE. Well, Mr. Chairman, having spent 10 years in 

the government, let me say that it is much, much more difficult to 

manage in the government than it is the private sector, and nonetheless the same basic principles of management in my experience 

apply. 

People also watch the people at the top and how they behave. It 

is terribly important that the people at the top set an example of 

what is expected, they walk the talk. I think the first thing that 

needs to be done is to gather people and say, times have changed, 

things are different, and there will be some people who will view 

that as an opportunity, an exciting challenge, there will be those 

that say that we can live with that, and there will be those who 

will resist it, and somehow those people who resist it either have 
8 

to find new work that they can deal with or be put aside so they 

don’t interfere. 

And so I think that there need to be examples set very quickly 

that accountability is expected, and that were I to start out, I 

would have a conversation like that with the organization. I would 

travel the field for a few weeks. I would then make clear what our 

goals were, what our expectations were. I would do my very best 

to have our resources match those expectations. If there were people who weren’t up to the job, they need to find something new to 

do. 

Mr. ROGERS. Let me ask this, speaking about that, because I 

think you are exactly right: Do you think that whoever takes the 

reins at NNSA, assuming the Senate will soon confirm somebody, 

has the latitude to make those corrective changes in leadership 

personnel? For example, I was listening to Admiral Mies’ five 

points, and he made the observation that the bureaucracy was risk 

averse, and a lot of the folks in middle management either don’t 

want to make decisions or if they do, they are overruled by somebody. 

I am wondering how difficult it is to take a middle management 

person and replace them with somebody who is not risk averse. Did 

you even look at that or do you know? 

Mr. AUGUSTINE. We have looked at it. We have both experienced 

it, and many of the members of our group have served in government. And as you know very well, the civil service was set up to 

protect employees from political pressures. In so doing I think it in 

my view has leaned too far to make it difficult to remove people 

who are not up to their job. 

And I worked with many very, very capable people in government, particularly people in uniform. At the same time, I have encountered situations where people directly reporting to me were 

really not suited for the job they were in, and it is very, very difficult to do anything about that. 

Mr. ROGERS. In the government sector? 

Mr. AUGUSTINE. In government, yes; I should have been clearer 

but—— 

Mr. ROGERS. Well, we just saw that in Y–12, you know, we have 

had that incident up there, and to my knowledge to this day nobody has been terminated. 

Mr. AUGUSTINE. Well, as you are aware—well, I know you are 

aware—I was one of three people the Secretary asked to do an investigation of Y–12, an independent investigation, and it is very 

hard to find out what actually happened to the government employees after that. We have tried very hard. But what is clear is 

that the three intruders went to jail. 

Mr. ROGERS. Yeah. 

Mr. AUGUSTINE. The people working for the contractors—the contractor was fired, the contractor employees, some were fired, some 

were transferred, apparently laterally, and as best as I know, the 

people in government service were transferred laterally or no action was taken, and I qualify that with saying as best as we have 

been able to find out. 
9 

Mr. ROGERS. Yeah well, the head of their security did not get 

any—did not shoulder any responsibility for that, that is the thing 

I find most amazing. 

I do want to ask you all both, we heard your five systematic disorders. Would you both please provide some specific examples, if 

you can, of where we have seen the erosion of senior leadership attention to nuclear weapons issues and what impact that has had. 

Just if you can think of one or two specifics. If you can’t, that is 

fine. 

Admiral MIES. Well, I would say at the height of the Cold War 

we had a very robust infrastructure that was capable of producing 

nuclear weapons in significant volumes, significant quantities. 

Today we are dealing with a very obsolescent footprint within the 

NNSA complex, 54 percent or somewhere around there of the infrastructure is over 40 years old. Much of it is a legacy of the Cold 

War, and there is a need to streamline it and modernize it. We are 

struggling right now with the lack of any significant pit production 

capability because we don’t have two major facilities, a Chemical 

and Metallurgy Research Replacement [CMRR] Facility and a Uranium Processing Facility [UPF], which have been troubled, as you 

well know, by poor project management and deficient cost estimating. So, again, that is one significant example of an erosion of 

our infrastructure capabilities. 

Mr. AUGUSTINE. I will cite two quick examples. There are many. 

One is when the Nuclear Weapons Council met to approve what is 

known as the ‘‘3+2’’ plan, within a month of the time that was approved and widely agreed upon at a very high level, the NNSA 

came back and said we can’t carry that out, and the system basically stopped at that point in terms of proceeding as planned at the 

higher levels. 

The second example is the facilities have been allowed to age. 

Even though the people working in them are well aware of that at 

the highest levels, there has been no action in many cases. Today, 

over 50 percent of the facilities within the NNSA are over 40 years 

old, over 25 percent are over 60 years old, and not only does some 

of that raise a safety issue, it certainly impacts morale that you 

asked about. 

Mr. ROGERS. Thank you very much. 

The chair now recognizes the ranking member for any questions 

he may have. 

Mr. COOPER. I thank my good friend, the chairman of the subcommittee, and I most of all thank the witnesses for being here, for 

their long period of government and public sector service, and also 

for their expertise in leading this very important panel. 

I want to compliment members of the subcommittee here, not 

only on my side but across the aisle. It is great to have a senior 

member like Mr. Thornberry here who is even willing to sit below 

the salt in the subcommittee hearing to find out about the governance of the nuclear security enterprise, and this is, we should point 

out, probably one of the few hearings in which actually the attendance of the subcommittee compares very favorably with the attendance in the audience because the public has not tuned in to these 

issues as they should, and Congress, as you gentlemen point out, 
10 

has not focused on these issues as we should, so hopefully this is 

the process that starts the correction. 

I know that this is just a preliminary report on your findings on 

the governance of the national security enterprise. Are you on track 

to deliver the final report sometime this summer? 

Admiral MIES. I believe we are, and we look forward to delivering a full and comprehensive report. 

Mr. COOPER. When I went through your testimony, I was struck 

because you can view things usually as a glass half full or glass 

half empty, and I would like for each of you to look at your testimony and for Mr. Augustine, for example, he starts off by saying 

the current viability of our nuclear deterrent is not in question, 

glass half full, and of course points out some qualifying things, we 

can improve existing governance structures because they are inefficient or ineffective, you know. We are not going to die from that. 

But later on in the testimony it is sharper. It says, quote, ‘‘The 

NNSA experiment has failed.’’ It needs to be fixed as a matter of 

priority, presumably national priority. 

And I thought Admiral Mies’ testimony had a similar glass half 

full or glass half empty look at things. Admiral Mies starts off by 

saying there has been a significant erosion in our capabilities to 

sustain our nuclear deterrent capabilities, a lack of attention to 

weapons issues by senior leadership, both civilian and military. 

Again, we are not going to die from that. But later in your testimony I thought if there were to be a headline for this hearing, it 

would be this, a single sentence: Quote, ‘‘there is no affordable, executable joint DOD–DOE vision, plan, or program for the future of 

nuclear weapons capabilities.’’ Wow. That is a big sentence. That 

is a devastating sentence. So that would be in the glass half empty 

category. 

Now, I know you are just at the preliminary level, you have done 

fact-finding, the commission hasn’t been able to formulate recommendations, but as we go through our hearings and we learn 

that just, you know, to sustain current capabilities is probably $355 

billion, and that is assuming no further cost overruns or delays or 

erosion of scientific talent or bad relationships with contractors, 

whatever, and we are in an environment of sequestration. Like how 

are we going to do all this? 

So, this is a central challenge not only for Congress but for the 

Nation. Nuclear issues are not necessarily in fashion. It is easy to 

just dismiss them, or—but I hope that, as I say, this is the beginning of a process where we can focus in a mature way on sustaining and possibly even enhancing our capability because as the 

only great Nation on this Earth, that is our obligation. 

I also think it is important to put this in historical perspective 

because there has never been, you know, a perfect period for managing all this. If you read the history of the nuclear enterprise, 

there always are controversies and problems, and so the path has 

never been smooth. There is not one glory age, one Camelot, but 

hopefully we can do better than the NNSA has been doing because 

I agree with Mr. Augustine, the NNSA experiment has failed, and 

I look forward to your panel’s recommendations on the fixes. 

Thank you, Mr. Chairman. 

Mr. ROGERS. I thank the ranking member. 
11 

The chair now recognizes my friend and colleague from Texas, 

Mac Thornberry, for any questions he may have. 

Mr. THORNBERRY. Well, thank you, Mr. Chairman, and thank 

you for letting me sit in. 

There is some advantage to having been involved in this issue for 

20 years because one does see a progression of reports that largely 

reach the same conclusion you all do. There wasn’t anything that 

you said this morning, I don’t believe, that is new, and we have 

been grappling with it literally for 20 years. But I have got to say 

at the same time, I recently, as soon as Secretary Moniz was confirmed, I sent him a letter that said I have never been more concerned about the nuclear complex than I am now. 

And part of it is the morale, part of it is the lack of leadership 

at the top, part of it is the continued aging and deterioration of our 

weapons which we are not addressing, just a host of things. So I 

guess all that is a long way of saying I appreciate the efforts that 

you all are putting into this. 

I guess one question that keeps coming up in my mind is to what 

extent any recommendations are going to affect the culture and the 

basic leadership issues that you all identify. When we created the 

NNSA basically we took a report from some very distinguished people and the President’s Foreign Intelligence Advisory Board and 

took the more conservative option. We didn’t create an autonomous 

agency like the Nuclear Regulatory Commission. We tried to do the 

semi-autonomous. But even if you had an autonomous agency, if 

you don’t have attention from the President, from the Secretary of 

Defense, I don’t know, would it matter? How do you legislate cultural leadership focus, the number one issue that Admiral Mies 

identified? 

Mr. AUGUSTINE. Do you want to start on that one? 

Admiral MIES. I don’t know where to start. 

Well, first, to the minority Member’s concern about half full or 

half empty, I certainly think at the present time the glass is half 

full, but I think as we look to the longer term in the future, if dramatic action is not taken, then the concern is more a half empty 

view. 

I think you have to appreciate that there have been numerous 

studies, as you well know, that have done, that have preceded our 

panel. We have inherited about 50 past studies focused on the Department of Energy and to some degree NNSA, and all of those 

studies have reached similar findings regarding the cultural, personnel, organizational, policy, and procedural challenges that those 

organizations face right now, that exists within DOE and NNSA, 

and so many of our panel’s findings I don’t think are going to be 

necessarily new or original. But I think you have to appreciate that 

many of these problems existed before NNSA was created, and 

NNSA was created out of recognition that some of these problems 

existed and, frankly, the semi-autonomous model has not succeeded, and in a sense we view it as a failed experiment. 

From that standpoint I guess the change, the creation of NNSA 

was basically an organizational change, but organizational changes, 

as Norm indicated, are not the solution, the main solution to the 

problem. The main solution is cultural, not organizational, and you 

have to approach it from a DOE-wide basis, not just an NNSA 
12 

basis, and I think we are very fortunate to have Secretary Moniz, 

who is very engaged, who has a passion and an understanding of 

the mission and clearly is committed to making some cultural 

changes. The challenge that I think he will face and we will all face 

is can you institutionalize those changes so that they endure long 

beyond his tenure. 

Mr. AUGUSTINE. Mr. Chairman, might I comment on Mr. Thornberry’s question? 

First of all, I would strongly agree, you can’t legislate culture, 

and even in a corporation you can’t dictate changes by putting out 

memos. I think that what is required is to set an example of what 

the new culture is and to be totally intolerant of deviations from 

that. The firm I happened to work for, we’ve combined 17 different 

firms in 7 years—5 years to make it, to build it, and we had 17, 

sometimes I thought we had 18 different cultures, and it came together very well because we were very intolerant of individuals 

who just couldn’t deal with the new way of doing business. 

And I think as the Admiral says, we are fortunate today to have 

a Secretary of Energy that understands this. The chairman, Mr. 

Chairman, you mentioned at the outset that we need solutions that 

aren’t personnel, human dependent, but we have got to have Secretaries of Energy who understand something about the nuclear enterprise, about management, and I think that is where it starts. 

Mr. THORNBERRY. Thank you, Mr. Chairman. 

Mr. ROGERS. I thank the gentleman. 

The chair now recognizes the gentlelady from California, Ms. 

Sanchez. Is she still here? 

Mr. COOPER. She stepped out. 

Mr. ROGERS. The gentleman from Georgia, Mr. Johnson, is recognized. 

Mr. JOHNSON. Thank you. 

I am just sitting here thinking. I am listening to you all, and I 

was preparing what I was going to ask and say, and let me first 

say that I appreciate the study that you all have conducted, and 

it is indeed sobering to think of all of that nuclear power that is 

in a dangerous state of maintenance and management. 

And so our nuclear enterprise has been eroded from years and 

years of lack of focus and a lack of sustained leadership is what 

you have said from both civilian and military sources, and it has 

taken place over quite a period of time, since the end of the Cold 

War, and I think that the erosion of this nuclear enterprise is illustrative of the morass that Congress finds itself in. We are still 

doing business the same way that we have done for centuries, and 

right now this body is not functioning, this body needs a study that 

would provide us with some guidance in terms of where we are and 

what we need to do to move forward. I would submit that this Congress, while it is great that we are looking at our deficiencies right 

now, I also think that we need to be looking at what our future direction should be. It is not to be assumed that we should go back 

and correct everything to sustain what we had. 

I think the discussion should be what do we need as we move 

forward. So in my mind the President having—and this President, 

like previous Presidents having worked on nuclear disarmament 

treaties and such, we would be, this Congress would be well ad-
13 

vised, I think, to I don’t want to say follow, but we should explore 

this disarmament issue. 

Of course, we can’t unilaterally disarm, but the goal should be 

to have a world without nuclear weapons, and so if we start out 

from that premise and then work from that, I think we would do 

ourselves a whole lot of justice. $355 billion to get us back to where 

we need to be is unrealistic. I don’t think that is going to happen, 

and so how much will it take for us to get where we need to be 

in order to continue our efforts to eradicate nuclear weapons from 

the face of the globe? I think that should be our, that should be 

something that Congress, through its committees and subcommittees, should be about, and we need to be about it quickly because 

we can’t afford the status quo both from a security standpoint, especially from a security standpoint. 

So as we make sure that we don’t allow other nations to acquire 

nuclear weapons, we need to be about this kind of study, but Admiral Mies, you in your statement, you said that several nuclear powers are modernizing their arsenals. Which ones are those? And 

what is—how much money are they spending to do that? 

Admiral MIES. Well, let me say that very clearly both Russia and 

China are modernizing their nuclear arsenals, and we have good 

indications of that. They are developing new capabilities. I do want 

to go back and reassure you, though, that despite our testimony 

and our comments about erosion in the enterprise, I want to reassure the subcommittee that because of the strength of the Stockpile 

Stewardship Program and the great science that is going on in our 

national laboratories, we still have a safe, secure, and reliable 

stockpile. 

That is not an issue today. It might be an issue for the future 

if we don’t continue to invest and pay attention to those issues, but 

I think for the foreseeable future we have a safe, secure, and reliable stockpile, and I don’t want to create the impression that that 

is a concern. 

Mr. ROGERS. The gentleman’s time has expired. 

The chair now recognizes the gentleman from Florida, Mr. 

Nugent. 

Mr. NUGENT. Thank you, Mr. Chairman, and I appreciate this 

panel and what you are saying. 

It is a sobering thought because, you know, deterrence is about 

our ability to project force, and our adversaries, while I know in a 

perfect world we would love that we didn’t have any, and that, you 

know, everybody loved each other and there would be no need for 

deterrence, but that is not the real world. We live in a place that 

is becoming actually more dangerous, not less dangerous. 

We see the actions of China and Russia, and particularly what 

we have just seen with Russia’s incursion into the Ukraine, much 

less what they did in Georgia, and they are still there. So while it 

would be great to live in this fantasy world, what bothers me the 

most is the fact that one of the last sentences in your testimony 

was lasting reform requires aggressive action, sustained implementation of all five of these areas that were mentioned in the report, 

but national leadership engagement is the common theme. 

‘‘Improvement is possible, but it will demand strong leadership 

and proactive implementation of the panel’s recommendations by 
14 

the President, the Congress, and engaged DOE Secretary.’’ I think 

that you have—at least from the Congress’ standpoint, we have 

shown leadership, and we are trying to give direction, but everything that we have talked about here is about interpersonal skills, 

about the ability for management to make sure that people stay on 

task, and that starts at the highest level, you know. 

Evidently, you know, this has been going on for years. I have 

been here for 3 years, and it disturbs me the fact that we can’t get 

administrators to actually do their job, and they are not held accountable, because in reading through all your testimony it is 

about accountability, and Mr. Augustine, you know, I was a sheriff 

and we had 500 employees, and I will tell you that we held people 

accountable. We had civil service, and there were ways to deal with 

those within the civil service system, but you had to hold people 

accountable, and you had to let people know what your mission 

was and what you would not tolerate. 

And in this particular endeavor, nuclear deterrence and the safety of the nuclear force that we have and the modernization really 

falls to those folks. You know, there is a whole bunch of other 

things going on, but that is their only mission. Their mission is 

very central. 

You mentioned that that takes rocket scientists to do this, but 

it takes managers and people to actually manage the systems. I 

don’t have to know much about how to construct a nuclear weapon, 

but I do have to know about how do I construct a management 

team to get us across the goal line. I guess I am just 3 years up 

here, I am still baffled by the fact that we can have studies and 

commissions, and we do all the stuff, and it doesn’t seem to get better. 

What does it really take? Does it take the President saying to 

you that, you know, DOE Secretary, you know, this is unacceptable, you have got to get this done? I mean, does it start there or 

where does it start? 

Mr. AUGUSTINE. I think you have said it exactly right. The President obviously is the principal person to provide leadership in this 

regard, the administration. Strong support from the Congress is required, and probably the most important individual is the, under 

today’s organization is the Secretary of Energy, who in many cases 

in the past did not have a background at all within this arena. 

As you spoke, I was thinking that I had tried to figure out how 

I would summarize in one sentence what at least I think I have 

learned, and my sentence would be that with regard to the NNSA 

or the nuclear enterprise that the whole is less than the sum of the 

parts. There is some very, very capable people, some capable organizations, but the leadership to bring them together, to set goals, 

and you referred to the focus should be very clear what their job 

is. 

We went to one national, one of the laboratories within the nuclear enterprise where the contractor that runs the facility, they 

have an award fee; 80 percent of the award fee had nothing to do 

with the primary mission. It had to do with peripheral issues. Very 

important peripheral issues, I would emphasize that, but 20 percent had to do with producing nuclear weapons and maintaining 

the stockpile and so on. 
15 

Mr. NUGENT. As a citizen of the United States, people should be 

concerned. I think the message is that we expect our leaders to actually lead, not just hope things get better and hope that processes 

improve. We can have all the commissions that we want, but until 

there is actual leadership to force the issue, I don’t see how this, 

Mr. Chairman, ever gets better. 

And I yield back. 

Thank you so very much. 

Mr. ROGERS. I thank the gentleman, and I understand his concern, and I hope he is wrong. 

The lady from California, Ms. Sanchez, is now recognized for 5 

minutes. 

Ms. SANCHEZ. Thank you, Mr. Chairman, and thank you gentlemen for—I really enjoyed reading your testimony, and as Mr. Cooper said, some real pearls of wisdom in there and also some real 

arrows at some very difficult problems that we need to solve. 

Of the 18 years that I have been here on this—in this Congress 

and in this full committee, 16 of those years have been spent on 

this committee, this subcommittee here, and I have seen a lot of 

interest and I have seen a lot of waning interest, not just, quite 

frankly, by people in the administration with respect to this issue, 

but also by members on this subcommittee over time, and so first 

of all I am really thrilled that so many have shown up today. 

Gentlemen, during the markup and conference of the fiscal year 

2013 and fiscal year 2014 NDAA, the House bill, we considered 

several legislative provisions related to NNSA and its related authorities and oversights, and some of these provisions included significantly limiting the authority of the Secretary of Energy, changing health and safety oversight by the NNSA, and the independent 

Defense Nuclear Safety Board even as the Department of Labor 

paid over $10 billion in compensation to workers or to their families because they were either killed or injured by exposure to radiation or toxic materials by when they were working at the Department of Energy at their nuclear sites. 

These legislative provisions led to significant concern about 

weakening oversight at a time when the NNSA is overseeing an 

ambitious nuclear weapons modernization and sustainment plan 

and also building, of course, some of our facilities, one-of-a-kind 

new facilities to handle plutonium and uranium operations. Considering that backdrop, do you see a role for independent oversight of 

safety and security and where would this come from? Who would 

we look to for that? And when the NNSA talks about priority missions, does this include—in your opinion does this include a serious 

commitment to safety and security? 

Mr. AUGUSTINE. Why don’t you start and I will follow up. 

Admiral MIES. Let me try and answer your question in a number 

of ways. 

First of all, with respect to oversight, I don’t think anybody on 

the panel wants to reduce the effectiveness of oversight, but I 

would say that in our review of the performance of the oversight 

function within NNSA and DOE, despite a large number of people 

at each of the field offices, we have really evolved over time into 

a transactional, compliance checklist-based kind of culture which, 

frankly, is both inefficient and not very effective, and so the issue 
16 

is not more oversight or less oversight in terms of bodies as much 

as it is better oversight, and are there better ways to do oversight, 

and really—— 

Ms. SANCHEZ. I guess that would be my question—— 

Admiral MIES. And really—— 

Ms. SANCHEZ. How would we go about really getting to the oversight that we need? 

Admiral MIES. Well, to some degree I think if you look at the 

current performance elements today, a lot of the laboratories and 

the sites are graded on nonmission-related functions. 

Norm previously mentioned that one organization had 80 percent 

of their award fee associated with nonmission-related issues. 

Again, there has to be a greater, stronger focus on mission. I would 

just give you one example to illustrate the point, Y–12. We have 

approximately 100 people at Y–12 doing oversight, and yet for 

whatever reason despite that large number of people doing oversight, the problem with the high level of frequency of false and nuisance alarms at the facility, the complacency that ultimately set in 

with the guard force over a long period of time, which ultimately 

contributed to the lack of a very effective and efficient response 

when the nun and her accomplices actually tripped some alarms. 

To me you have to ask yourself, with that many people doing 

oversight, why wasn’t there a recognition that this culture of complacency had kind of set in because of the large number of false 

and nuisance alarms and why wasn’t there attention given to fix 

it and address it? And, again, preceding the Y–12 incident, Y–12 

had received an inspection with respect to their safety and security, 

and they were held up as—— 

Ms. SANCHEZ. An example. 

Admiral MIES [continuing]. An exemplar of good security, so you 

have to ask yourself is the current type of oversight that we are 

doing really successful in achieving what you really want from a 

mission standpoint. 

Now, there is, has been one prototype test within the Department of Energy, within NNSA, the Kansas City model, where Kansas City transitioned to really exemption from a large number of 

DOE orders and regulations, and they were allowed to move toward industrial standards, accepted industrial standards, and ISO 

certifications, and that enabled Kansas City to reduce the number 

of Federal overseers, and at the same time significantly reduce the 

cost, but improve performance as well. 

Now, Kansas City is unique in that it doesn’t have a lot of nuclear functions, and so you can’t just transplant that model to some 

of the other elements of the site, but I certainly think it is a good 

example that we ought to look hard at, particularly for nonnuclear 

functions that are performed across the complex to see if there are 

opportunities where you can move to independent oversight or 

change the oversight model in a way that provides much more effective oversight. 

Mr. ROGERS. The lady’s time has expired. 

Ms. SANCHEZ. Thank you, Mr. Chairman. 

I have some other questions that I would like to submit for the 

record, and if Mr. Augustine has any comments, I would like to 
17 

have them submitted from him also. I think this is an incredibly 

important topic that we have been struggling with. 

Thank you. 

[The information referred to can be found in the Appendix on 

page 81.] 

Mr. ROGERS. I agree. 

The chair now recognizes the gentleman from Arizona, Mr. 

Franks, for any questions he may have. 

Mr. FRANKS. Thank you, Mr. Chairman. 

Thank you gentlemen both for being here. 

Mr. Augustine, for your commitment to the administration. 

And Admiral Mies, I want you to know I was impressed by the 

candor of your opening statement, and I think you are a credit for 

your uniform, or the one you used to wear, and am grateful to people like you that make it possible for all of us to sit here and have 

a peaceful conversation. 

I am convinced that our nuclear deterrent, our nuclear capabilities, are one of our most important elements of our entire arsenal 

of freedom. And yet it is important to remember that that deterrent is—essentially has its substance in two things, and that is the 

capacity that we are really here talking about today is our ability 

to know that we have a reliable capability, that capacity, and also 

intent. 

Now, I apologize for—ask you for diplomatic immunity. I don’t 

know of anybody but God that could figure out the intent of this 

administration. Okay? But the capacity here is what we are talking 

about today, and I am beginning to be concerned that there is some 

questions about that. And I think that is extremely dangerous in 

the kind of world that we live in if an enemy somehow feels like 

maybe our capacity or our intent is not up to par that it may potentially drag us into something that would be very scary. 

So with that, Mr. Augustine, I will turn and ask you the tough 

question, if I can do that. And you are—I’m still under diplomatic 

immunity here, if you don’t mind. 

Plutonium facility in New Mexico, around a billion dollars spent. 

Nothing built with no intention to ever to build it. The uranium facility in Tennessee, over $1.2 billion spent, with nothing built. 

NNSA is studying alternatives and is unlikely to build the design 

that has cost them $1.2 billion so far. 

The mixed oxide facility in South Carolina, over $3 billion spent. 

The concrete structure complete, but the NNSA has announced 

that with their fiscal year 2015 budget request that it is putting 

the project in, quote, ‘‘cold standby.’’ The W76 LEP [life extension 

program] is delayed 2 years. The B61 LEP delayed 3 years. The 

IW–1 LEP is delayed 5 years. And, you know, I will try to cut this 

short here. But it is not a really a positive situation. 

And the testimony here about the loss of sustained national leadership focus I think is spot-on, and I could not agree with you 

more, and find the administration’s lack of leadership and care for 

this nuclear deterrent that we have been talking about, I would 

call it shameful, but it is more terrifying than that. And I think 

those delays highlight that. 

This committee has been pulling in its—is pulling its collective 

hair out, really, trying to get the White House and the Office of 
18 

Management and Budget to put attention on the nuclear security 

enterprise. And I know you folks would like to see that as well 

without, you know, putting any of my own commentary in your 

mouth. We passed packages of reforms out of the House the last 

2 years in the NDAA, only to see the administration, quote, 

‘‘strongly object’’ or even threaten to veto them. But the administration has offered no real reforms of its own. Nothing, no answer 

to these problems. 

And so I guess I have to ask you, and I will make it to both of 

you. Mr. Augustine, I will let you go first, if you don’t mind. Has 

the White House engaged with your advisory panel and do you 

think—I shouldn’t say that. Does it understand the major problems 

that exist in the nuclear security enterprise? And do you think the 

President understands it, the gravity of it? 

Mr. AUGUSTINE. That is a difficult question—— 

Mr. FRANKS. It sure is. 

Mr. AUGUSTINE [continuing]. Mr. Franks, for us to answer. Clearly, as a nation, not just this administration, but over a period of 

years we have gradually let our nuclear capability degrade. I would 

come back to your initial remarks that deterrence is in the eye of 

beholder, as you know, and when other nations come to the conclusion whether our deterrent is not what we say it is, then we are 

in great danger. And one of the worst things we could do of course, 

is to state we have plans that we don’t provide the resources and 

the management capability to carry them out. If we can’t afford 

more, then we need to change the plan. But to have plans that 

don’t match the resources is probably the worst of all worlds. 

Once again, as we—we have visited in great detail the programs 

you have cited. There are a lot of examples of poor management. 

It has less to do with in this case the capability of the people in 

the system; most of the people we talk to are very capable, and 

very dedicated, and I might add, very frustrated. They know the 

problems. Probably better than we do. It comes down to leadership 

at all levels. I’m trying to be as candid as I can. 

Mr. FRANKS. I couldn’t agree with you more, Mr. Augustine. I 

don’t want to cut you short, but I am out of time and I wonder if 

we could give Admiral Mies—but I certainly appreciate your candor 

and your response. 

Admiral MIES. Separate from the White House and Congress and 

national-level leadership, I think there is a lot that the Department 

of Energy can do within itself. You spoke about several projects 

that have—we have already expended a significant amount of national treasure on, and we have yet to see a facility. A lot of that 

stems from a number of cultural issues and technical competence 

within the Department of Energy itself. There is a need for stronger cost-estimating capability, a much more rigorous analysis of alternatives up-front before you commit to a certain program, and 

also real strong, robust program management expertise. 

And I think those three elements to a certain degree are lacking 

within NNSA, have historically been lacking within NNSA. You 

don’t need the White House or Congress to fix those things. I think 

the Secretary has the ability to take on some cultural reforms to 

really make the organization more efficient to better utilize the resources that have already been given to the organization. 
19 

Mr. ROGERS. Gentleman’s time has expired. 

I do want to thank the Admiral for his comment. But I would say 

that Secretary Moniz, who I agree is a good man and prepared for 

that job, has his hands tied, to an extent, that we, going back to 

Thornberry’s question, we could legislate loosening up his hands a 

little. 

Jim. I got my thought process going over there. Mr. Langevin is 

recognized for 5 minutes. 

Mr. LANGEVIN. Thank you, Mr. Chairman. I would thank our 

witnesses for being here today. I have a couple specific questions 

I would like to ask, but first of all let me start off more broadly. 

Is the NNSA and the nuclear security enterprise under the current construct fixable or do we need to move in a totally new direction? If it is fixable, where would you start? If it is not, what would 

you do? 

Mr. AUGUSTINE. Well, under the current structure, at least as it 

is being carried out, it is clear that it doesn’t work, and is probably 

going to be very difficult to fix. 

What new structure one needs as a starting point is something 

that the committee is very much involved in trying to decide. The 

list of options is not great. 

You want to add anything to that, Admiral? 

Admiral MIES. Again I think organizational change is needed, 

but it is the lesser fix in the sense that cultural reform is, is far, 

far the greater priority. And you can move the organizational boxes 

around all you want, but if you don’t fix the cultural problem, those 

organizational shifts will be meaningless. So you really have to address some of these cultural issues, and that is the Secretary’s 

challenge. 

Mr. LANGEVIN. Well, I concur that changing an organizational 

culture is very difficult to do and in many ways is very—it is two 

specific things: A, you either have to incentivize and get buy-in 

from the people there to change the culture and have them be a 

part of the solution, or you just got to start all over, and that is 

a very daunting prospect if that is what it comes to. 

Let me just turn to a couple of specific questions. President 

Obama made clear in his Prague 2009 speech and the Nuclear Posture Review identified, the priority of strengthening nonproliferation, making progress on nuclear arms control, and sustaining a 

strong deterrent. Is there adequate national leadership below the 

President and above the NSA—NNSA level, to focus political support on these priorities? 

Mr. AUGUSTINE. In my mind, the part of the government you 

pointed at is the head of the Department of Energy. And I think 

today that is true, there is that capability. But the capability will 

need strong backing because there is always resistance to change. 

If one gets into various management levels within the Department 

of Energy, I think there are some cases that one would question 

whether we have got people in the job that are up to it. On the 

other hand, there are a lot of people there that are very good. This 

is a case-by-case issue. 

Mr. LANGEVIN. Admiral. 

Admiral MIES. I would only add that you can’t really separate 

the nonproliferation mission entirely from the nuclear weapons 
20 

stockpile surveillance and maintenance mission. The two are inextricably linked in that a large volume of our expertise in our weapons program is what contributes to our understanding and knowledge of what other countries are doing and how they are developing, and all that plays into our nonproliferation initiative. So I 

think they are inextricably tied together and both very critical. 

Mr. LANGEVIN. Thank you, Admiral. 

Let me move to this. After the disastrous Y–12 security incident, 

the Department of Energy Inspector General and the Government 

Accountability Office have stated that NNSA had an eyes-on, 

hands-off approach to oversight. It appears that NNSA officials did 

not have or use the authority to second-guess the contractor practices on security. Has this major deficiency been addressed within 

NNSA? And, more generally, does NNSA have the necessary expertise to evaluate performance and proposals from the M&O contractors? 

Mr. AUGUSTINE. Yeah, I think with regard to the first part of 

your question, the answer is, no, the capability doesn’t exist today. 

One of the things that has happened is that the responsibility for 

carrying out a mission, the mission within NNSA, has been separated from many other important supportive functions. The person 

in charge of producing a weapon should also have as part of their 

job, produce the weapon, but do it safely, do it environmentally responsibly, and so on. Securely. 

But today the staff functions have taken over those latter issues. 

And that should be embraced by the person who has the line-management responsibility and the authority. So today you have a separately—a separation of responsibilities, and that leads to great bureaucracy, delay, and ineffectiveness. 

Admiral MIES. I would only add that although we haven’t seen 

significant changes in the way oversight is done in that it is still 

pretty much a transactional compliance base, there is a major initiative underway to reduce the number of performance element factors that the fees are awarded upon and focus more on mission elements rather than nonmission-related elements. I think it is too 

early to say how successful that initiative will be. But clearly there 

is initiative to change the performance elements standards. 

Mr. ROGERS. Gentleman’s time has expired. 

Mr. LANGEVIN. Thank you, Mr. Chairman. 

I thank our witnesses for their testimony. We obviously have a 

daunting task ahead of us, and I appreciate your work and look 

forward to continuing to work with you. 

Thank you. I yield back, Mr. Chairman. 

Mr. ROGERS. I thank the gentleman. 

Chair now recognizes Mr. Wilson from South Carolina for 5 minutes. 

Mr. WILSON. Thank you, Mr. Chairman, and thank you for having this hearing, and thank you for your commitment to our country. And I look forward to reading the report and any way that we 

can be helpful. 

And, in fact, the issues that we are dealing with, even going back 

14 years ago, there was a report by the House Armed Services 

Committee Special Oversight Panel in regard to the Department of 

Energy reorganization, and it was ably chaired by soon-to-be chair-
21 

man Mac Thornberry. And in this report, he said that the central 

purpose of the new organization, the National Nuclear Security Administration, NNSA, is to correct the confused lines of authority 

and responsibility within the DOE nuclear weapons complex that 

contributed to the mismanagement and security problems at the 

Department and to provide a clear mission focus and accountability 

for DOE personnel involved in the nuclear weapons program. 

It also said there was the intended effect is to provide a substantial degree of independence but not total independence from the 

Department of Energy. 

And, Admiral, you have already touched on this. But with the 

2012 break-in at the Y–12 facility, do we still have confused levels 

of authority? And, additionally, for each of you, that would be one 

question. The other: Do you think that your recommendations 

would resolve the confused lines of authority? 

Admiral MIES. Well, separate from the Y–12 incident, I think 

just the fact that you have a semi-autonomous NNSA has created 

the growth of a number of redundant organizations within DOE 

and NNSA which have duplicative functions and hence there are 

conflicting and confused lines of authority. I think in many ways 

the creation of a semi-autonomous organization may have worsened 

the problem, not helped it. 

So that is why I think we think it is a—we consider at this point 

a failed experiment. 

Norm, do you want to—— 

Mr. AUGUSTINE. I would just add that, as implemented, the semiautonomous approach has clearly not worked. One of the things 

that leads to that, you touched on it, is the line management has 

been balkanized such that responsibility for many important functions, such as safety, security, health, environmental responsibility, 

and so on, is separate. It has major power of the organization such 

that at the lower levels of management decisions take forever to 

get up to the top between the staff and the line management. 

Somebody has to be put in charge and held responsible, and that 

just hasn’t happened. 

Admiral MIES. I would only add that this goes back to what we 

said earlier about basic successful management organizations that 

clearly define roles, responsibilities, authority, and accountability 

in many cases are lacking. And because of that, you find instances 

where too many people appear to be—believe they are authorized 

to say no and prevent actions from going forward. 

And to some degree a lot of that decisionmaking is not embedded 

in line management, who should be in the best position to make 

a risk-informed decision. Again to accomplish the mission safely, 

securely, and environmentally safe. 

Mr. WILSON. Well both of you have such experience. So I—we appreciate your insight. 

The mixed oxide fuel fabrication facility, the MOX facility in 

South Carolina, this is in accordance with the nuclear nonproliferation agreement that we have with the Russian Federation to process high-level weapons-grade plutonium, convert it to be used in 

nuclear reactors, and the cost overruns or cost growth has been 

gruesome. But it is 61 percent completed. 
22 

And, Mr. Augustine, as you were talking about capable and dedicated personnel, they are right there and making every effort to 

complete this facility. But it is being put on cold standby. It concerns me, obviously, having weapons-grade plutonium in our State. 

Is there any alternative to the existent to this? 

Mr. AUGUSTINE. I think there is no alternative to producing a facility that can do what we have committed to do. Whether there 

is an alternative to specific design or not, I am not in a position 

to say. 

Mr. WILSON. Thank you very much. 

Thank both of you. 

Mr. ROGERS. I thank the gentleman. 

Mr. Augustine, earlier you made a reference to the fact that you 

were in an organization where you took 17 smaller organizations 

and had to put them together and get them to act like one. And 

that one of the reasons you were successful is that you were very 

intolerant of folks who weren’t on the team. 

And, obviously, in the private sector, you had the ability to help 

somebody get on the road to finding something else to do if they 

didn’t want to be on the team. 

And I know, Admiral Mies, when he was in service, if he had a 

senior officer, even a junior officer that wasn’t on the team, he 

could help them find something else to do. 

I am not sure Secretary Moniz has that. And my question is if 

we were—could we go back to Mr. Thornberry’s comment about 

could we legislate. The only thing I think we could legislate that 

would help Secretary Moniz would be, give him termination authority, at least within NNSA. Maybe not throughout the Department of Energy. But at least within NNSA. So that if he does have 

some people in his organizational effort, or the new administrator, 

that need to either get on the team or move on, do you think that 

would be a significant piece of legislative authority that we could 

implement? Or would it really not be critical? 

Mr. AUGUSTINE. As a preface, I should say that what you alluded 

to in industry, I didn’t do alone; I had a terrific leadership team, 

and that, that is essential. 

I think what you suggested to give the Secretary termination authority would be a very useful step. I think it would also be very 

useful to give him greater authority in terms of hiring. It would be 

useful to give him the opportunity to have people who stay for a 

specific number of years, to put people in a job long enough to be 

responsible. 

I can remember years ago testifying beside Dave Packard at the 

Defense Department about this very topic, and people come and go 

so fast that really nobody is accountable. So I think those would 

be very useful steps. Obviously, they would be very difficult steps. 

Mr. ROGERS. Let me ask you, it has been 16 months, we have 

had a series of acting administrators, as you know, General Klotz 

has been waiting for months now for action by the Senate. How important—and so in your review so far—is it that we get somebody 

confirmed by the Senate in the position as a permanent administrator? 

Mr. AUGUSTINE. In my opinion, it is very important. 
23 

Admiral MIES. Mine as well. I think one of the concerns we have 

seen, and it’s not just with the director, but it’s a lack of leadership 

stability and continuity at the senior leadership levels within 

NNSA. It is vitally important if you want to make cultural changes 

and move on. 

I would just like to go back to your question. I think it is important, as Norm I think said, that you can’t legislate cultural reform, 

which I think is the biggest issue. And if you are going to legislate 

certain initiatives, I would just encourage you work very, very 

closely with the Secretary to ensure there is close alignment there. 

One of the issues that we are looking at, and we haven’t reached 

any conclusion on it, is, is the issue of exempted service positions 

within NNSA, whether there might be value in that or not. And 

we haven’t come to any conclusion. But again, how do you develop 

that technical competence, people with professional qualifications 

and certifications to really effectively manage the enterprise? 

Mr. ROGERS. Well, to that point, Mr. Cooper and I have been 

meeting with Secretary Moniz and asking him specifically what we 

could do to be helpful. We have got to get our colleagues to help 

us, outside of just me and Mr. Cooper. 

Lastly, you all made very various thought-provoking comments. 

But another one you made a little while ago was talking about how 

Secretary Moniz is the right guy, right now, because he has experience in the subject matter and there have been historically a lot 

of people in that position who didn’t. 

What do we do—Secretary Moniz is a good guy and he has got 

the right background, but nothing is to say that the person that follows him is going to have competence in the subject matter area. 

What would you all recommend—and you all may want to put it 

in your report, I don’t know but—that Congress do to try to make 

sure that we at least urge a certain type of person be viewed for 

that position? Or do you think that is even necessary for Congress 

to address? 

Mr. AUGUSTINE. We are acutely aware of that issue and spent a 

good deal of time discussing it and don’t really have a recommendation. We have a few, a few thoughts. But I think one thing, Congress does confirm people to Secretarial positions, and the Congress 

has a great deal of authority in seeing what kind of qualifications 

an individual has. 

And, this is particularly difficult job because it goes all the way 

from windmills to photocells on the one hand, to nuclear deterrence 

on the other. But there are people who have that mantle. Secretary 

Moniz happens to be one. 

I think one of the most important thing Congress could do is to 

be sure successive leaders, whatever organization one happens to 

choose, are qualified to deal with this issue. 

Mr. ROGERS. Okay. Thank you very much. 

Chair now recognizes Mr. Cooper for any comments he wants to 

make. 

Mr. COOPER Thank you, Mr. Chairman. Thank the witnesses 

again for an excellent hearing. 

Anybody in Congress should hesitate about giving anyone else 

management advice, because Lord knows this institution is not run 

properly. 
24 

But it worries me, two things that have come out in this hearing. 

One is the universal tendency of anybody in Congress to blame the 

administration, and Congress has been blaming the administration 

ever since George Washington was President. And last I checked, 

you don’t get a magic wand or halo any time you are elected to office, in either to the executive or the legislative branch. So it is important to realize that—and I think you have it in your testimony, 

it is not highlighted as perhaps it should be. 

There is something remarkable going on even within the NNSA 

today. In fact, there are several remarkable things. One of those is 

the Naval Reactors program, which has been largely exempt from 

any publicity or scrutiny because they do a darn good job. So you 

don’t have to blame the administration about that. And they have 

been able to survive different kinds of administrations. 

And another common thing has been, well, you can’t legislate 

culture, and that is probably true. But you can legislate an environment in which it is easier to create a good culture. 

And somehow Naval Reactors [NR] has been able to do that. 

Their ability, for example, to actually have contracting officers who 

know what they are talking about. You know, imagine that. Their 

scrutiny of expenditures, anything over $10 million, as opposed to 

the usual $100 million threshold. They know what is going on. 

Wouldn’t that be nice? 

So, to me, when we are looking for bright spots here, and we 

need to find some bright spots, extending that culture would be a 

very valuable thing. And, but part of it is avoiding the limelight, 

avoiding the publicity, avoiding the political back and forth so they 

can do their jobs. 

So, I worry that this institution has a tendency to do the usual 

thing, press conferences, publicities, express outrage. We have got 

to do better than that. And, so as you look at new models, there 

is a pretty good one right there at your fingertips, and I know the 

admiral is extremely familiar with this already. 

But thank you for your service. Thank you. We look forward to 

this report, and look forward to even more than that, to progress. 

Admiral MIES. I would just comment that we certainly have 

formed a benchmarking team to go out and look at what we 

thought were very successful examples of high performance organizations, and NR was clearly one of those. And we have certainly 

looked at a lot of the attributes that Naval Reactors has to try and 

see if those can be adopted by NNSA. 

Mr. ROGERS. Thank the gentleman. 

Chair now recognizes the gentleman from Texas, Mr. Thornberry. 

Mr. THORNBERRY. Thank you, Mr. Chairman, and I again appreciate you and Mr. Cooper allowing me to sit in. 

The only thought I would offer on Naval Reactors is they have 

had their own problems here recently with some cheating on— 

down in their school, and somewhat similar to what we see with 

the ICBM force. And maybe it is an isolated incident, maybe it is 

not a bigger problem. But you do worry that the problems that we 

have been talking about here are, are extending. 

The other thought is, for Naval Reactors, in a way, they report 

both to DOE and DOD. It is a unique sort of institution, started 
25 

by an admiral who had a very strong culture, that has been able 

to be continued over the years, and has been able to maintain 

largely that culture over time. 

I am not sure what that tells us. It was exactly, as the gentleman suggested, one of the things we looked at in creating NNSA 

is to look at Naval Reactors and why they are successful and what 

we can, we can duplicate. I think there are still more lessons there. 

I agree. But there are some worrisome signs. 

Admiral Mies, the only other thought is, as you were talking, 

talking about duplicative organizations within DOE and NNSA. 

Partly, that is by design. Because what happened before was everybody in DOE wanted a piece of NNSA. I don’t know if—I can’t remember the number. 

What percentage of DOE’s budget is NNSA right now? Do you 

know off the top of your head? Isn’t it about 40 percent. 

Mr. ROGERS. 40 percent. 

Mr. AUGUSTINE. 40 percent is about right. 

Mr. THORNBERRY. So you have got 40 percent of the budget. That 

means everybody at DOE wants a piece of it. And that goes back 

to what you were talking about earlier, the people responsible for 

getting the weapons out, were second-guessed by all these folks 

who wanted to justify their existence in DOE by getting a piece of 

it. So the idea was, you do separate, insulate NNSA from all those 

other people except the Secretary. He can do whatever he wants to. 

And, the last thought is, if the Secretary is the answer, and setting aside the increased authorities that the chairman was talking 

about, but if he is the answer, why hasn’t he been doing it? I had 

the exact same high hopes that everybody else had. But there 

hasn’t been much happening now. He is waiting on a confirmee 

from the Senate, I realize. 

I guess that is just a long way of saying, we have got to remember the problems that this was intended to create—to fix. I completely agree. It has not fixed them. But I don’t want to go backwards to those days either. Because it was a, quote, ‘‘dysfunctional 

bureaucracy, incapable of reforming itself.’’ I am not sure it is 

much better, but I don’t want to go back and be worse. 

So, any comments, I would welcome. But I appreciate you all letting me harangue. 

Mr. AUGUSTINE. I would be very brief. I think that future Secretaries of Energy, or whomever this organization reports to, have 

got to be qualified at the subject at hand, and have got to be 

strongly committed. And without that, I don’t think anything we 

propose is going to matter. 

Admiral MIES. Beyond duplicative functions, I do think the semiautonomy has created a bureaucratic seam between NNSA and 

other elements of the Department of Energy, particularly the Office 

of Science and the other DOE science labs, and when you look at 

those laboratories, there really is a need for close collaboration between the NNSA labs and the Office of Science labs because many 

of them work on nonproliferation issues, and have nuclear expertise and nuclear forensics in other areas. 

So, so again to some degree the semi-autonomy has created an 

impediment to hinder closer collaboration than you maybe would 
26 

desire, and so, it just isn’t the duplicative functions, but it is also 

the issue associated with collaboration. 

I would only add too that we have had several meetings with the 

Secretary, and he has moved out and is making a number of DOEwide organizational changes to address what I perceive are some 

of the cultural issues that he recognizes. 

Mr. ROGERS. I thank the gentleman. 

Mr. Garamendi, did you have anything you wanted to ask before 

we close it up? 

Mr. GARAMENDI. First of all, my apologies, we have a Coast 

Guard hearing, and being a ranking member, I was tied up there. 

I want to thank the witnesses and the commission for their work. 

I will catch most of the testimony and from the staff. 

I understand that one issue that was not covered—perhaps this 

is correct, from the 30-second briefing—is the issue of the Savannah River MOX facility. Did the commission look at this issue at 

all? And, if so, what did you determine? 

Admiral MIES. We haven’t looked at it in great detail. It clearly 

falls in the same example as the UPF facility in Tennessee and the 

CMRR, the plutonium facility in New Mexico. And in our analysis, 

in general, of those facilities and some of the other major projects 

within NNSA and the Department of Energy, is that they suffered 

from three elements that I talked earlier about: A lack of robust, 

real strong program management; a lack of a real rigorous analysis 

of alternatives up front, before you decide to embark on a path; and 

a lack of a, again a robust cost-estimating capability to really understand how much resources will be required to complete some of 

these major projects. And I think those three elements have contributed to the situation we find ourselves in today. 

Mr. GARAMENDI. I really want to apologize to the committee and 

the witnesses for not being here. Those issues are of great interest 

to me, and I really want to get into it, but it is not really appropriate now. I will circle back around at some point. I want to take 

this up in the NDAA, particularly with the Savannah River, and 

try to meet some of the issues there. 

Mr. ROGERS. Very important. Thank you, sir. 

And I want to thank the witnesses. I very much want to remind 

you, and I know you are cognizant of it, when your advisory panel 

was established the specific report request was that, quote, 

‘‘conferrees believe changes at the margins are not a solution,’’ 

close quote, and I know you all realize that. So be bold. 

We appreciate you. We look forward to getting your report this 

summer and hopefully having you come back this fall with some 

final thoughts. With that, we are adjourned. 

[Whereupon, at 11:35 a.m., the subcommittee was adjourned.] 
A P P E N D I X 

MARCH 26, 2014 

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MARCH 26, 2014 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

THE HEARING 

MARCH 26, 2014 

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RESPONSE TO QUESTION SUBMITTED BY MS. SANCHEZ 

Mr. AUGUSTINE. Lasting reform will require aggressive action and sustained implementation across the federal government. The changes needed undoubtedly will 

be difficult to implement regardless of where the enterprise is located within the 

government’s structure, since the fundamental problems are cultural more than organizational. Organizational change, while not unimportant, is only a small portion—the easy portion—of the revisions that must be made to facilitate success. Previous efforts to reform and previous studies calling for action have largely failed due 

to lack of leadership follow-through, a lack of accountability for enacting change, 

and the lack of effective, sustained top-level demand for change from national leadership. The Department of Energy by itself would be challenged to oversee the radical steps that will be needed. Success is imaginable only with the strong and active 

engagement of a knowledgeable Secretary, supported by the White House and Congress, and a structure that removes impediments and that aligns to mission priorities. 

Previous efforts to reform and previous studies calling for action have largely 

failed due to lack of leadership follow-through, a lack of accountability for enacting 

change, and the lack of effective, sustained top-level demand for change from national leadership. [See page 17.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING 

MARCH 26, 2014 

(85) 

QUESTIONS SUBMITTED BY MR. ROGERS 

Mr. ROGERS. Mr. Augustine and Admiral Mies, from your testimony and the dozens of reports over the past decades on problems at DOE and NNSA it is obvious 

that the problems facing the nuclear security enterprise are as complex as they are 

numerous. Many of them are cultural, and we all know that cultures don’t change 

easily. And I think you’ve hit the nail on the head when you call the problems ‘‘systemic.’’ Leadership will be key to fixing these problems, and leadership is always 

about individuals and personalities. But I’m concerned about relying too much upon 

individual personalities, because the term of any senior leader in government is, inherently, limited. To provide the sustained leadership and effectively see-through 

cultural and other difficult reforms, don’t we need buy-in across multiple administrations, multiple leadership teams? How do we address this? 

Mr. AUGUSTINE and Admiral MIES. Lasting reform will require aggressive action 

and sustained implementation across the federal government. The changes needed 

undoubtedly will be difficult to implement regardless of where the enterprise is located within the government’s structure, since the fundamental problems are cultural more than organizational. Organizational change, while not unimportant, is 

only a small portion—the easy portion—of the revisions that must be made to facilitate success. Previous efforts to reform and previous studies calling for action have 

largely failed due to lack of leadership follow-through, a lack of accountability for 

enacting change, and the lack of effective, sustained top-level demand for change 

from national leadership. The Department of Energy by itself would be challenged 

to oversee the radical steps that will be needed. Success is imaginable only with the 

strong and active engagement of a knowledgeable Secretary, supported by the White 

House and Congress, and a structure that removes impediments and that aligns to 

mission priorities. [Question #1, for cross-reference.] 

Mr. ROGERS. Admiral Mies and Mr. Augustine, in 2009 the bipartisan Strategic 

Posture Commission devoted a chapter of its final report to the challenges within 

the nuclear security enterprise system. In your opinion, why did this report, and the 

dozens of others like it, have no effect? Why have we seen little or no action to fix 

these longstanding problems? 

Mr. AUGUSTINE and Admiral MIES. Previous efforts to reform and previous studies 

calling for action have largely failed due to lack of leadership follow-through, a lack 

of accountability for enacting change, and the lack of effective, sustained top-level 

demand for change from national leadership. 

In addition, robust, formal mechanisms to evaluate findings, assess underlying 

root causes, analyze alternative courses of action, formulate appropriate corrective 

action, gain approval, and effectively implement and institutionalize change are 

weak to non-existent within DOE/NNSA. 

Mr. ROGERS. Admiral Mies and Mr. Augustine, ultimately, the 2009 Strategic Posture Commission recommended creating an independent agency to take on NNSA’s 

responsibilities and mission. I won’t ask whether you or the panel agree with this 

or any other recommendation because your panel hasn’t gotten there yet, but I’d like 

you to comment on some of the findings. These include: ‘‘The NNSA was formed to 

improve management of the weapons program and to shelter that program from 

what was perceived as a welter of confusing and contradictory DOE directives, policies, and procedures. Despite some success, the NNSA has failed to meet the hopes 

of its founders. Indeed, it may have become part of the problem, adopting the same 

micromanagement and unnecessary and obtrusive oversight that it was created to 

eliminate.’’ Do you agree? Why or why not? 

a. Another finding from the Strategic Posture Commission: ‘‘NNSA’s problems will 

not vanish simply by implementing a new reporting structure. A major driver of 

micromanagement and excessive regulation is the attitude of the Federal workforce 

reflected in both unreasonable regulations and excessive oversight in implementing 

them.’’ Do you agree? Why or why not? 

Mr. AUGUSTINE and Admiral MIES. As implemented, the NNSA Act has actually 

been counter-productive. The problems fall into three main areas. 

• Overlapping DOE Headquarters and NNSA Staff Responsibilities 

The parallel DOE headquarters and NNSA staff structures increase bureaucracy, 

cloud decision-making authority, and add to the number of people without clear authority and accountability who can stop or delay decisions. As one field representa-
86 

tive put it, ‘‘We suffer in a regulatory framework where there are no clear lines of 

appeal or decision-making and no integrated place for the cost-benefit analysis to 

be done. For example, regarding facility safety and operational infrastructure, I get 

direction from the Office of Acquisition and Project Management, the Defense Programs leadership, the leadership for infrastructure management, DOE headquarters, and the Defense Nuclear Facilities Safety Board. How am I to do my job 

when getting direction from five different organizations?’’ • A Deepened Divide between Line Management and Mission-Support Responsibilities 

Under the existing parallel staff structure, DOE headquarters staffs continue to 

exercise their mission-support oversight of NNSA, but they do not have the countervailing pressures to accomplish the mission. This structure skews incentives at the 

DOE headquarters level. These factors create strong and counter-productive incentives to eliminate all risks—large and small—rather than seeking to effectively 

manage the most important ones. Because many officials in the DOE headquarters 

have lacked a compelling interest in mission execution (as many outside observers 

have noted), the staff conservatism is not challenged by the department’s leadership. • Ineffective and Inefficient DOE Orders, Directives, and Rulemaking Processes 

Because of the diversity of DOE operations, orders are often written broadly to 

apply to both non-nuclear and nuclear activities even though the latter may demand 

special considerations. Consequently, DOE orders for ES&H and security often lack 

the precision, consistency, and clear implementing guidance necessary to translate 

the order’s intent into practice. Not all sites have the same version of DOE orders 

for ES&H and security policy reflected in their contract. Indeed, there are sites that 

have both NNSA and DOE orders in their contract covering the exact same ES&H 

topic; although these orders may be similar, they can contain subtle, but crucial, differences. 

a. As noted in the second bullet above: 

Under the existing parallel staff structure, DOE headquarters staffs continue to 

exercise their mission-support oversight of NNSA, but they do not have the countervailing pressures to accomplish the mission. This structure skews incentives at the 

DOE headquarters level. These factors create strong and counter-productive incentives to eliminate all risks—large and small—rather than seeking to effectively 

manage the most important ones. Because many officials in the DOE headquarters 

have lacked a compelling interest in mission execution (as many outside observers 

have noted), the staff conservatism is not challenged by the department’s leadership. [Question #3, for cross-reference.] 

Mr. ROGERS. Admiral Mies and Mr. Augustine, is the mission of the nuclear security enterprise likely to succeed in the long-term under the current governance 

structure? 

Mr. AUGUSTINE and Admiral MIES. The current viability of the U.S. nuclear deterrent is not in question. The panel finds, however, that the existing governance structures and practices are most certainly inefficient, and in some instances ineffective, 

putting the entire enterprise at risk over the long term. 

Mr. ROGERS. Admiral Mies and Mr. Augustine, with hindsight, what are the 

strengths and weaknesses of the NNSA Act? 

a. Was the intent of the ‘‘separately organized’’ and ‘‘semi-autonomous’’ nature of 

NNSA clear? 

b. Do you believe there was agreement from all stakeholders—particularly within 

DOE and NNSA—regarding what these terms should mean and how they should 

be implemented? 

c. The 2009 Strategic Posture Commission stated that ‘‘NNSA was formed to improve management of the weapons program and to shelter that program from what 

was perceived as a welter of confusing and contradictory DOE directives, policies, 

and procedures.’’ Do you believe this intent was achieved? 

d. Do you believe the letter and spirit of the NNSA Act has actually been implemented? 

Mr. AUGUSTINE and Admiral MIES. One unmistakable conclusion of the panel’s 

fact finding is that, as implemented, the ‘‘NNSA experiment’’ in governance reform 

has failed. The current DOE/NNSA structure of ‘‘semi-autonomy’’ within DOE has 

not established the effective operational system that Congress intended. 

Despite the intent of the NNSA Act to create a separately organized NNSA within 

DOE, the NNSA has not established autonomous leadership authorities, a policy 

framework, distinct culture, or integrated decision-making mechanisms. 

Except for Naval Reactors, the NNSA Act does not provide a blanket exemption 

of NNSA from DOE orders and directives. NNSA decisions and initiatives remain 

subject to DOE headquarters staffing processes prior to consideration for Secretarial 
87 

1 U.S. Department of Energy, Departmental Directives Program, DOE O 251.1C (Washington, 

DC: Office of Management, January 15, 2009). 2 U.S. Department of Energy, Departmental Directives Program, DOE O 251.1C (Washington, 

DC: Office of Management, January 15, 2009). 3 ‘‘. . . NNSA and DOE have not fully agreed on how NNSA should function within the department as a separately organized agency. This lack of agreement has resulted in organizational 

conflicts that have inhibited effective operations.’’ Government Accountability Office (GAO), National Nuclear Security Administration: Additional Actions Needed to Improve Management of 

the Nation’s Nuclear Programs (Washington DC: GAO, 2007). 

approval. For instance, the department’s directive program (DOE O 251.1C) requires 

policies, orders, notices, guides, and technical standards to be reviewed by a Directives Review Board chaired by the Director of the Office of Management.1 Senior 

representatives from the three Under Secretarial offices, the Office of General Counsel, and the Office of Health, Safety and Security all serve as members whose concurrence is needed before final issuance. Should the review board be unable to reach 

consensus, the Deputy Secretary decides whether to overturn the position of the directive’s originating office. 

DOE’s implementation of the NNSA Act has produced parallel, intertwined NNSA 

and DOE headquarters staffs in many functional areas, rather than truly separate 

or independent DOE and NNSA staff offices. Parallel staffs exist in areas such as 

General Counsel, Human Capital Office, Public Affairs, Legislative Liaison, Chief 

Financial Officer, Environmental, Safety and Health (ES&H), Security, and Chief 

Information Office. Members of both the DOE headquarters and NNSA staffs point 

to the inefficiencies this creates. [Question #5, for cross-reference.] 

Mr. ROGERS. The 1999 Rudman Report, which in many ways Congress used as 

a guide for the NNSA Act, recommended that Congress create either: (1) a new, 

completely independent agency with sole responsibility for the nuclear weapons program; or (2) what it termed a ‘‘semi-autonomous’’ agency within DOE in which the 

bureaucratic interactions between the new agency and broader DOE would be minimized. The Rudman Report explained that this term, ‘‘semi-autonomous,’’ would 

mean that the agency would be ‘‘strictly segregated from the rest of the department’’—which would be ‘‘accomplished by having the agency director report only to 

the Secretary.’’ The Rudman Report said that DOE was ‘‘a dysfunctional bureaucracy incapable of reforming itself.’’ Has this definition of the term ‘‘semi-autonomous’’, as described by the Rudman Report, been put into practice at DOE/NNSA? 

Could a ‘‘separately organized’’ and ‘‘semi-autonomous’’ NNSA, if implemented well, 

be effective and efficient? 

Mr. AUGUSTINE and Admiral MIES. As noted in the answer to question 5: 

Despite the intent of the NNSA Act to create a separately organized NNSA within 

DOE, the NNSA has not established autonomous leadership authorities, a policy 

framework, distinct culture, or integrated decision-making mechanisms. (page 11) 

Except for Naval Reactors, the NNSA Act does not provide a blanket exemption 

of NNSA from DOE orders and directives. NNSA decisions and initiatives remain 

subject to DOE headquarters staffing processes prior to consideration for Secretarial 

approval. For instance, the department’s directive program (DOE O 251.1C) requires 

policies, orders, notices, guides, and technical standards to be reviewed by a Directives Review Board chaired by the Director of the Office of Management.2 Senior 

representatives from the three Under Secretarial offices, the Office of General Counsel, and the Office of Health, Safety and Security all serve as members whose concurrence is needed before final issuance. Should the review board be unable to reach 

consensus, the Deputy Secretary decides whether to overturn the position of the directive’s originating office. 

DOE’s implementation of the NNSA Act has produced parallel, intertwined NNSA 

and DOE headquarters staffs in many functional areas, rather than truly separate 

or independent DOE and NNSA staff offices. Parallel staffs exist in areas such as 

General Counsel, Human Capital Office, Public Affairs, Legislative Liaison, Chief 

Financial Officer, Environmental, Safety and Health (ES&H), Security, and Chief 

Information Office. Members of both the DOE headquarters and NNSA staffs point 

to the inefficiencies this creates. 

Could a ‘‘separately organized’’ and ‘‘semi-autonomous’’ NNSA, if implemented 

well, be effective and efficient? 

The panel’s interim report is critical of the ‘‘separately organized’’ structure as implemented: 

Despite the intent of the NNSA Act to create a separately organized NNSA within 

DOE, the NNSA has not established autonomous leadership authorities, a policy 

framework, distinct culture, or integrated decision-making mechanisms.3 The panel 
88 

concludes that the relationships among NNSA, the Secretary of Energy, and the 

DOE headquarters staffs are fundamentally broken and must change. 

The panel’s interim report does not provide a judgment on the relative efficacy 

of the organizational alternatives, including whether a well implemented structure 

within DOE could work well. The report’s observations on this subject are provided 

in the conclusion: 

The panel’s interim findings indicate that fundamental reform will be required to 

reshape an enterprise that is capable of meeting all of the nation’s needs. The 

changes will be difficult regardless of where the enterprise is located within the government, since the fundamental problems are cultural more than organizational. Organizational change, while not unimportant, is only a small portion of the changes 

that must be made. The panel believes lasting improvements are possible, but they 

will demand strong and sustained leadership and proactive support from Congress, 

the White House, and engaged Departmental Secretaries. 

Mr. ROGERS. Admiral Mies and Mr. Augustine, several reports have noted that 

semi-autonomous agencies in other cabinet departments have met with considerable 

success. For instance, the FBI in the Justice Department, and the NRO in the DOD. 

The Rudman Panel suggested the NRO is a small, agile, ‘‘semi-autonomous’’ organization that has had significant (but not unblemished) success in managing very 

large contracts to build and operate surveillance satellites. What, if anything, can 

we learn from this and other semi-autonomous agencies that might apply to NNSA? 

Mr. AUGUSTINE and Admiral MIES. The panel’s benchmarking activities identified 

a number of proven management characteristics common to successful high-risk, 

high technology operations. (See Table 2.) Prominent among these are a shared vision and mission priorities to chart the path ahead; the clear definition and disciplined exercise of roles, responsibilities, authorities, and accountability aligned to 

mission priorities; a technically competent workforce with the right skill mix and 

capabilities; clear plans with careful analysis of the resources needed to succeed; 

structured decision-making processes, with an emphasis on timely resolution of 

issues; and a structure and budget aligned to focus on customer deliverables. 

Table 2. Criteria for Success in High Reliability, High Tech Organizations 

General • Universally understood and accepted purpose 

• Effective culture developed over many years by transformative leadership and maintained by indoctrinating carefully selected personnel 

• Adequate visibility with external stakeholders 

Structure • Clearly established, codified, and reinforced lines of authority, responsibility, and accountability 

• Formal, inclusive, decisive, prompt, and documented decision-making processes 

• Deliberative body, such as a Board of Directors or Management Council, which 

obliges the organization to collectively engage in risk-based resource allocation decisions to accomplish mission 

• Separation of program/mission functions from institutional/support functions 

Personnel • Long-tenured director and/or senior leadership with extensive experience 

• Technically proficient and accomplished staff 

• Exceptional candidates recruited early to instill and sustain culture 

• Professional development programs emphasizing problem identification/solving, continuous learning, leadership, and the socialization of best practices 

Communications • Mission priorities aligned with purpose and frequently communicated by senior leadership 

• Information flows freely and quickly up and down the organization, and decisions are 

made at the appropriate levels 

• Few if any obstacles (people or processes) prevent bad news from moving up the 

chain of command 

• Mechanisms exist for field oversight offices and site managers to communicate regularly and directly with the head of the organization 

Planning and • Single strategic planning reference document guides all decisions 

Budget • Unwavering adherence to a disciplined planning and budget process, which is comprehensive and detailed 

Program 

Management 

• In a government operation, government program managers oversee efforts, but contractors execute the work within established policies 
89 

4 ‘‘. . . NNSA and DOE have not fully agreed on how NNSA should function within the department as a separately organized agency. This lack of agreement has resulted in organizational 

conflicts that have inhibited effective operations.’’ Government Accountability Office (GAO), National Nuclear Security Administration: Additional Actions Needed to Improve Management of 

the Nation’s Nuclear Programs (Washington DC: GAO, 2007). 5 In 2012, the total reportable cases of workplace injuries for the Kansas City Plant were .4, 

for the weapons complex .9, and for U.S. industry 2.4. (Total reportable case rate = cases per 

100 full-time employee work years (200,000 work hours)). 

Table 2. Criteria for Success in High Reliability, High Tech Organizations—Continued 

• Lean and authoritative site offices have sufficient technical and operational expertise to effectively oversee the work 

• Stakeholders are included early in project life cycle and strive to understand all requirements and regulations upfront 

• Technical and financial elements of programs are scrutinized in order to validate efforts and control costs 

• The more hazardous the operation, the more safety is considered part and parcel of 

mission performance 

• Specialized ES&H and security standards are used only when more generally accepted standards (e.g., industrial standards, OSHA standards) are shown to be inadequate or unclear 

Contracts • Contracts focused and evaluated on costs and mission performance, not award fees 

related to aspects other than meeting the mission 

• Contracts consolidated where appropriate to achieve economies of scale 

• Contracts competed Cost Plus Fixed Fee (very low) with no incentive/bonus awards or 

Fixed Price Incentive (based on mission performance), depending on the work being 

done 

Mr. ROGERS. Admiral Mies and Mr. Augustine, in a 2007 report, GAO said ‘‘management problems continue, in part, because NNSA and DOE have not fully agreed 

on how NNSA should function within the department as a separately organized 

agency. This lack of agreement has resulted in organizational conflicts that have inhibited effective operations.’’ What were some of the organizational conflicts? How 

did they inhibit effective and efficient operations? Do you believe this problem has 

been resolved? 

Mr. AUGUSTINE and Admiral MIES. The panel’s observations are consistent with 

those of the GAO study, and in fact, that study is cited in the panel’s interim report: 

Despite the intent of the NNSA Act to create a separately organized NNSA within 

DOE, the NNSA has not established autonomous leadership authorities, a policy 

framework, distinct culture, or integrated decision-making mechanisms.4

The answer to question 3 describes three major factors that inhibit effective and 

efficient operations. In summary these factors are: 

• Overlapping DOE Headquarters and NNSA Staff Responsibilities 

• A Deepened Divide between Line Management and Mission-Support Responsibilities 

• Ineffective and Inefficient DOE Orders, Directives, and Rulemaking Processes 

Mr. ROGERS. Admiral Mies and Mr. Augustine, many studies and reports over the 

past ten years, including the 2009 Strategic Posture Commission, recommend eliminating duplicative NNSA and DOE regulation of any lab functions that are already 

regulated by external bodies—such as health and occupational safety by the Occupational Health and Safety Administration (OSHA)—and letting these external bodies 

regulate and oversee those regulations. Do you agree? What cost savings might be 

realized by such a move? 

Mr. AUGUSTINE and Admiral MIES. Beginning in 2005, DOE exempted the Kansas 

City Plant from DOE orders in areas where there were relevant commercial or industrial standards. The reforms moved the Kansas City Plant under industrial best 

practice standards (e.g., International Organization for Standardization (ISO) standards) with validation from external expert bodies. Kansas City Plant officials estimate that this initiative reduced the DOE-specific regulatory requirements on the 

facility by about 55 percent. These changes, coupled with internal business process 

improvements, have generated steady increases in workplace performance along 

with reduced mission-support costs. The plant reports that its safety record has improved under the reformed regulatory regime, and is about six times better than 

U.S. industry averages.5 A 2008 independent audit following the reforms estimated 
90 

6 J.W. Bibler and Associates, ‘‘Kansas City Site Office Oversight Plan: Assessment of Implementation Cost Savings’’ (January 2008). More recently, the plant management reported to the 

panel that the headcount of ES&H specialists in the M&O was reduced by 81 percent (between 

1995 and 2012). 7 At benchmark organizations, the new entrants are carefully screened and selected, in part 

based on suitability for long-term careers within the organization. Employees tend to spend long 

careers within the organization. Promotion to the most senior levels (other than a political appointee) is usually from within, and these organizations favor those with broad-based career experience within the organization. 

an overall personnel savings of about 12 percent.6 In parallel, the NNSA site office 

was able to reduce its staff by 20 percent, from fifty to forty staff. 

An internal NNSA Enterprise Re-Engineering Team concluded that the ‘‘Kansas 

City model’’ of relying on applicable industrial standards could be much more widely 

applied for non-nuclear functions within the enterprise, and targeted an initial expansion for Sandia and the Nevada National Security Site. However, initiatives to 

adopt elements of the ‘‘Kansas City model’’ at these sites have thus far been denied 

by DOE/NNSA headquarters staff. Nonetheless, this remains a significant governance reform opportunity. [Question #9, for cross-reference.] 

Mr. ROGERS. Admiral Mies and Mr. Augustine, many agencies with national security functions operate outside the bounds of the general civil service system. All Federal positions in these agencies are ‘‘excepted service’’. Has the advisory panel explored this concept? What benefits might result from applying it to this problem? 

Would this be a way to ensure NNSA Federal employees have the appropriate skills 

and quality needed to govern and oversee the nuclear security enterprise? 

Mr. AUGUSTINE and Admiral MIES. The NNSA has not taken the steps necessary 

to build a cohesive culture that instills accountability for customer deliverables, nor 

has it instituted the personnel programs needed to build a workforce with the necessary technical and managerial skills for operations. The purposeful development 

of leaders, managers, and staffs is essential to any governance system. The effective 

organizations benchmarked for this study focus on personnel management to create 

a reinforcing virtuous cycle: proven leaders emerge from careful selection and decades of experience involving careful development and screening. Such leaders make 

a system work well. They also attract and inspire other high-caliber people to join 

and stay in their organizations.7 As one example, the current Director of Navy Strategic Systems Programs (SSP) started his career within that organization as a junior officer, and almost all of his subsequent assignments have been in the command. 

In addition to deep familiarity resulting from a long career with the same organization, long command tours provide needed continuity and allow the Director to promulgate and sustain the desired culture. Recently, the tenure of the SSP’s Director 

was extended from about four years to eight years to strengthen this benefit. 

A key staffing issue for the NNSA is the lack of operational experience in headquarters. In the peak years of the nuclear weapons program, the operational core 

of the nuclear enterprise was located in the Albuquerque Operations Office. Albuquerque synchronized the cycle of design-test-build throughout the Cold War, until 

1992, when the production of new weapons was suspended. Albuquerque was officially disbanded ten years later, in 2002. NNSA headquarters assumed Albuquerque’s operating functions (which were greatly diminished by then since the U.S. had 

ceased producing warheads), and decades of operational experience, knowledge, and 

technical expertise within the Albuquerque staff was lost in the reorganization. 

Now, as the United States embarks on an intensive series of warhead life extension programs covering the entire stockpile, a leadership team with deep experience 

and continuity (such as the team in the Albuquerque Operations Office) would be 

an enormously valuable asset for governing the enterprise. Creating and sustaining 

a personnel management system to build the needed culture, skills, and experience 

is a vital component of governance reform. 

The panel has also noted that greater use of excepted service positions is a potential tool for building a more technically and professionally competent workforce. 

[Question #10, for cross-reference.] 

Mr. ROGERS. Admiral Mies and Mr. Augustine, the NNSA labs are operated as 

federally funded research and development corporations (FFRDCs). The FFRDC 

construct was created to allow the Federal Government to broadly determine ‘‘what’’ 

work needed to be done while the FFRDC determines ‘‘how’’ to accomplish the work. 

Do you believe NNSA’s current management and governance model for the labs operates in the spirit and intent of the FFRDC model? Why or why not? 

a. Is it appropriate, under the Federal Acquisition Rules governing FFRDCs, for 

NNSA to have a long-term relationship and contract with an entity managing and 

operating one of its labs? Under what circumstances should NNSA seek to recompete such a contract? 
91 

8Source: Defense Acquisition University. 

Mr. AUGUSTINE and Admiral MIES. The FFRDC model for the NNSA labs has 

been [seriously impaired]. Historically, the Federally Funded Research and Development Centers the laboratories have played a key strategic role as trusted advisors 

in informing the government regarding effective execution of the mission. The historic, statutorily-defined relationship between the FFRDC and its sponsor includes 8

• Comprehensive knowledge of sponsor needs—the mission, culture, expertise, 

and institutional memory regarding issues of enduring concern to the sponsor • Adaptability—the ability to respond to emerging needs of their sponsors and anticipate future critical issues • Objectivity—the ability to produce thorough, independent analyses to address 

complex technical and analytical problems • Freedom from conflicts of interest and dedication to the public interest—independence from commercial, shareholder, political, or other associations • Long-term continuity—uninterrupted, consistent support based on a continuing 

relationship • Broad access to sensitive government and commercial proprietary information— 

absence of institutional interests that could lead to misuse of information or 

cause contractor reluctance to provide such information • Quick response capability—the ability to offer short-term assistance to help 

sponsors meet urgent and high-priority requirements 

[Misguided contract requirements] reinforce the transactional nature of the relationship and undermine the FFRDC partnership with the NNSA laboratories. Significant award fees combined with mission-support-oriented performance evaluation 

criteria are troublesome in that they reinforce DOE/NNSA’s emphasis both at headquarters and in the field on functional compliance and not mission performance. 

. . . performance evaluation criteria that focus incentives on compliance do little to 

encourage building a strong M&O leadership team. The recent transition to Strategic Performance Evaluation Plans could help catalyze the shift away from transactional oversight, but this transition will require a sweeping cultural change at 

NNSA and its Field Offices and a redesign of the weighting of the performance objectives to better capture M&O contributions to mission priorities. 

The benefit of the FFRDC relationship is that an FFRDC can function as an independent, long term trusted advisor and honest broker. Any decision to re-compete 

an FFRDC contract should be based upon contractor performance and weighed 

against the value of continuity and a long standing relationship. 

Mr. ROGERS. Admiral Mies and Mr. Augustine, NNSA conducted a pilot program 

at its Kansas City Plant to determine if near-total elimination of normal NNSA and 

DOE oversight policies and practices could be replaced with higher level contractor 

assurance systems—while still ensuring mission effectiveness. The pilot study was 

assessed by an outside consultant and found it lead to major cost savings, and the 

Strategic Posture Commission recommended it be expanded across the full nuclear 

security enterprise. Has the advisory panel examined this study? Do you believe it 

was successful? What should we learn from this pilot program? 

Mr. AUGUSTINE and Admiral MIES. The panel has reviewed the Bibler study, and 

cites the findings of that external review in the panel’s interim report, as described 

in the answer to question 9. As noted in that answer, the panel’s interim report 

finds that 

. . . this [the KC Plant model] remains a significant governance reform opportunity. 

Mr. ROGERS. Admiral Mies and Mr. Augustine, has DOD’s closer-engagement with 

NNSA and its budget and programs in the past few years been beneficial for ensuring NNSA focuses on and executes the parts of its mission that are critical to the 

military? 

Mr. AUGUSTINE and Admiral MIES. Although there is currently some agreement 

between DOD and DOE/NNSA on the long-term [‘‘3 plus 2 concept’’] for modernizing 

the stockpile, they have not converged on a long-term resource plan, nor have they 

converged on near-term mission and budget priorities. There remain fundamental 

differences in views on the appropriate composition of the weapon life extension program and the timing of deliverables. Additionally, coordination suffers from the departments’ differing resource management systems, the lack of joint program reviews, and the lack of coordination in the timing of their budget submissions. Lastly, their coordination mechanism the Nuclear Weapons Council lacks enforcement 

authority for the agreements reached within its deliberations. There are also significant process issues that need to be addressed. The Nuclear Weapons Council process 

has been unable to achieve the integrated teamwork and staffing required before 

decisions are prepared for Council meetings, despite many attempts at establishing 
92 

disciplined staff processes and follow up. Representatives of customer organizations 

designated to facilitate communication with the NNSA testify that they often are 

unable to obtain consistent answers from their NNSA counterparts, prior to briefings at the Nuclear Weapons Council. 

Mr. ROGERS. Admiral Mies and Mr. Augustine, in the course of many hearings 

and briefings over the past three years, this subcommittee has discussed the dozens 

of reports from the 1980s and 1990s that led to creation of NNSA. They all offer 

clear descriptions of the problems at DOE, including recurring security problems 

and gross mismanagement. Senior DOE leadership even embarked on several reform initiatives in the 1990s—but none were effective. Why was senior DOE leadership unable to reform the organization? Why did it require Congress to step in and 

try to fix a problem (by creating NNSA) that was so widely recognized? 

Mr. AUGUSTINE and Admiral MIES. The panel’s interim report notes that successful reform will require a government-wide effort. As noted in the answer to question 

1: 

Lasting reform will require aggressive action and sustained implementation 

across the federal government. The changes needed undoubtedly will be difficult to 

implement regardless of where the enterprise is located within the government’s 

structure, since the fundamental problems are cultural more than organizational. 

Organizational change, while not unimportant, is only a small portion—the easy 

portion—of the revisions that must be made to facilitate success. Previous efforts 

to reform and previous studies calling for action have largely failed due to lack of 

leadership follow-through, a lack of accountability for enacting change, and the lack 

of effective, sustained top-level demand for change from national leadership. The 

Department of Energy by itself would be challenged to oversee the radical steps that 

will be needed. Success is imaginable only with the strong and active engagement 

of a knowledgeable Secretary, supported by the White House and Congress, and a 

structure that removes impediments and that aligns to mission priorities. 

Mr. ROGERS. Admiral Mies and Mr. Augustine, I sincerely hope that the final report and recommendations of this panel are not left on a shelf and ignored, as so 

many previous reports on this topic. Can you assure the subcommittee that you and 

your fellow panel members will take the time and effort to advocate for changes to 

both Congress and the administration, after your final report is released? We need 

your knowledge and advocacy to move our government to finally address these critical problems. 

Mr. AUGUSTINE and Admiral MIES. As noted in the panel’s interim report, reform 

will not be easy. As the co-chairmen, we are committed to providing recommendations that are actionable and following through to ensure our recommendations are 

known to and understood by the responsible parties. As noted in the interim report, 

the real focus of the reform effort must be within the federal government: 

The panel believes lasting improvements are possible, but they will demand 

strong and sustained leadership and proactive support from Congress, the White 

House, and engaged Departmental Secretaries. 

Mr. ROGERS. Admiral Mies and Mr. Augustine, do you believe contractor assurance systems, if appropriately implemented and overseen, can be used effectively in 

the governance of the nuclear security enterprise? 

Mr. AUGUSTINE and Admiral MIES. Contractor assurance systems were not specifically addressed in the panel’s interim report. But based on our professional experience, yes, if appropriately designed and implemented. Relevant to the purpose and 

design of contractor assurance systems, the panel’s interim report notes that the 

focus of the relationship should be on the safe, secure execution of the mission, not 

on detailed compliance checklists or data. The panel found that: 

Contract incentives reinforce the transactional nature of the relationship and undermine the FFRDC partnership with the NNSA laboratories. Significant award 

fees combined with mission-support-oriented performance evaluation criteria are 

troublesome in that they reinforce DOE/NNSA’s emphasis both at headquarters and 

in the field on functional compliance and not mission performance. 

Witnesses note that the focus on compliance checklists can actually divert attention from the substance of safe and secure mission performance. 

Excessive and uncoordinated inspections, audits and data calls fuel inefficiencies 

and generate little value added; in fact, they may detract from the desired safety 

or security outcome 

Mr. ROGERS. Admiral Mies and Mr. Augustine, how do we strike the correct balance between appropriate oversight without micromanaging the management and 

operating contractors of the NNSA labs and plants? 

Mr. AUGUSTINE and Admiral MIES. The interim report does not provide recommended solutions. The situation, as observed in the panel’s interim report, identifies the issues in the relationship that need to be addressed. 
93 

9 National Research Council, Managing for High-Quality Science and Engineering at the 

NNSA National Security Laboratories, 5. 

In effective organizations, the government sponsor decides what is needed and the 

M&O partner, in particular the Federally Funded Research and Development Center, decides how to meet that need. . . . Put in the simplest terms, the government 

should identify the work to be done; identify the best performer to do the work; provide adequate resources; and hold the performer accountable. Under this construct, 

a competent M&O partner is relied upon to provide the expertise, corporate culture 

and leadership sufficient to execute the work, and meet the government’s operating 

standards. 

Over the decades, the changes in mission priorities from design and production 

to stewardship, and heightened regulatory oversight, overturned accepted priorities 

within the nuclear weapons program and radically altered the well-understood relationships between line managers and mission-support functions within the government as well as between the government and the M&O contractors. 

The resulting tension in defining the roles of the M&O contractors and the Federal mission-support officials has created significant friction in the governmentM&O relationships, especially at the laboratories. DOE/NNSA has increasingly 

moved toward detailed direction and regulation of the M&Os. . . . A 2012 National 

Resource Council of the National Academies study concluded there is little trust in 

the relationship between the laboratories and NNSA. NNSA has lost confidence in 

the ability of the laboratories to ‘‘maintain operation goals such as safety, security, 

environmental responsibility and fiscal integrity.’’ 9 The panel finds that this lack 

of trust is manifested in three ways: NNSA’s use of increasingly inflexible budgets 

and milestones to control work at the operating sites, the continued reliance on 

transactional regulation and oversight to enforce behavior, and the exclusion of 

M&O executives from NNSA headquarters deliberations in setting strategic direction. This management approach is costly, unwieldy, and counterproductive as further discussed in sub-section D. It creates a high degree of management complexity, 

puts detailed decisions in the hands of headquarters personnel who lack a complete 

understanding of field operations or technical requirements, undermines accountability, creates incentives to focus attention on administrative matters over program 

substance, and incurs excessive costs in administering the relationship. 

QUESTIONS SUBMITTED BY MR. COOPER 

Mr. COOPER. Do you believe that NNSA has been successful in setting clear requirements? 

Mr. AUGUSTINE and Admiral MIES. One form in which requirements may be set 

is by establishing a clear long-term plan for the enterprise. As noted in the panel’s 

interim report: 

Lacking strong leadership that unifies priorities, there has been no mechanism for 

the NNSA, its customers, and the national leadership to converge on a credible resource-loaded plan to chart the path ahead. The President’s annual Nuclear Weapons Stockpile Memorandum and the Nuclear Weapons Council evolving ‘‘baseline’’ 

plan, for instance, provide important direction, but they do not provide programmatic guidance. As discussed in Section 5 on NNSA’s collaboration with its customers, the Nuclear Weapons Council and the Mission Executive Council for interagency customer coordination continue to struggle in setting priorities, defining the 

enterprise’s needs, and identifying resources to support those needs. And, of course, 

planning efforts have been seriously undermined by the turbulent national budget 

environment as well as by NNSA’s inability to accurately estimate costs. 

At the level of the government-industry relationship, the panel’s interim report 

observes: 

In effective organizations, the government sponsor decides what is needed and the 

M&O partner, in particular the Federally Funded Research and Development Center, decides how to meet that need. . . . Put in the simplest terms, the government 

should identify the work to be done; identify the best performer to do the work; provide adequate resources; and hold the performer accountable. Under this construct, 

a competent M&O partner is relied upon to provide the expertise, corporate culture 

and leadership sufficient to execute the work, and meet the government’s operating 

standards. 

Over the decades, the changes in mission priorities from design and production 

to stewardship, and heightened regulatory oversight, overturned accepted priorities 

within the nuclear weapons program and radically altered the well-understood rela-
94 

10 National Research Council, Managing for High-Quality Science and Engineering at the 

NNSA National Security Laboratories, 5. 11 At benchmark organizations, the new entrants are carefully screened and selected, in part 

based on suitability for long-term careers within the organization. Employees tend to spend long 

careers within the organization. Promotion to the most senior levels (other than a political appointee) is usually from within, and these organizations favor those with broad-based career experience within the organization. 

tionships between line managers and mission-support functions within the government as well as between the government and the M&O contractors. 

The resulting tension in defining the roles of the M&O contractors and the Federal mission-support officials has created significant friction in the governmentM&O relationships, especially at the laboratories. DOE/NNSA has increasingly 

moved toward detailed direction and regulation of the M&Os. . . . A 2012 National 

Resource Council of the National Academies study concluded there is little trust in 

the relationship between the laboratories and NNSA. NNSA has lost confidence in 

the ability of the laboratories to ‘‘maintain operation goals such as safety, security, 

environmental responsibility and fiscal integrity.’’ 10 The panel finds that this lack 

of trust is manifested in three ways: NNSA’s use of increasingly inflexible budgets 

and milestones to control work at the operating sites, the continued reliance on 

transactional regulation and oversight to enforce behavior, and the exclusion of 

M&O executives from NNSA headquarters deliberations in setting strategic direction. This management approach is costly, unwieldy, and counterproductive as further discussed in sub-section D. It creates a high degree of management complexity, 

puts detailed decisions in the hands of headquarters personnel who lack a complete 

understanding of field operations or technical requirements, undermines accountability, creates incentives to focus attention on administrative matters over program 

substance, and incurs excessive costs in administering the relationship. 

Mr. COOPER. Does NNSA have the necessary expertise to evaluate performance 

and proposals from the M&O contractors? 

Mr. AUGUSTINE and Admiral MIES. The NNSA has not taken the steps necessary 

to build a cohesive culture that instills accountability for customer deliverables, nor 

has it instituted the personnel programs needed to build a workforce with the necessary technical and managerial skills for operations. The purposeful development 

of leaders, managers, and staffs is essential to any governance system. The effective 

organizations benchmarked for this study focus on personnel management to create 

a reinforcing virtuous cycle: proven leaders emerge from careful selection and decades of experience involving careful development and screening. Such leaders make 

a system work well. They also attract and inspire other high-caliber people to join 

and stay in their organizations.11 As one example, the current Director of Navy 

Strategic Systems Programs (SSP) started his career within that organization as a 

junior officer, and almost all of his subsequent assignments have been in the command. In addition to deep familiarity resulting from a long career with the same 

organization, long command tours provide needed continuity and allow the Director 

to promulgate and sustain the desired culture. Recently, the tenure of the SSP’s Director was extended from about four years to eight years to strengthen this benefit. 

A key staffing issue for the NNSA is the lack of operational experience in headquarters. In the peak years of the nuclear weapons program, the operational core 

of the nuclear enterprise was located in the Albuquerque Operations Office. Albuquerque synchronized the cycle of design-test-build throughout the Cold War, until 

1992, when the production of new weapons was suspended. Albuquerque was officially disbanded ten years later, in 2002. NNSA headquarters assumed Albuquerque’s operating functions (which were greatly diminished by then since the U.S. had 

ceased producing warheads), and decades of operational experience, knowledge, and 

technical expertise within the Albuquerque staff was lost in the reorganization. 

Now, as the United States embarks on an intensive series of warhead life extension programs covering the entire stockpile, a leadership team with deep experience 

and continuity (such as the team in the Albuquerque Operations Office) would be 

an enormously valuable asset for governing the enterprise. Creating and sustaining 

a personnel management system to build the needed culture, skills, and experience 

is a vital component of governance reform. 

Mr. COOPER. Have the customers of NNSA services and products been satisfied 

with the FY15 budget request for nuclear weapons sustainment and non-proliferation programs? 

Mr. AUGUSTINE and Admiral MIES. The panel’s interim report did not specifically 

evaluate the FY15 budget proposal, nor did the panel solicit the customers’ views 

on the proposal. However, there are two relevant observations from the panel’s interim report: 
95 

12OSD Office of Cost Assessment and Program Evaluation, ‘‘NNSA Governance Discussions: 

Briefing to the Advisory Panel’’ (Washington, DC: DOD, December, 2013); Congressional Budget 

Office (CBO), Projected Cost of U.S. Nuclear Forces, 2014 to 2023 (Washington, DC: CBO, December 2013). 13 U.S. Department of Energy (DOE), FY2015 Stockpile Stewardship and Management Plan 

(Washington, DC: DOE, April 2014). 

A rough estimate, based on assessments by DOD’s Cost Assessment and Program 

Evaluation Office and the Congressional Budget Office, is that the aggregate NNSA 

program, as was structured in its 2014 Stockpile Stewardship and Management 

Plan, was at least $10 billion under-funded over the coming decade.12 The recently 

released 2015 Stockpile Stewardship and Management Plan reduces projected funding over the next decade and proposes significant delays in the delivery of several 

major life extension programs and nuclear facilities.13 Without commitment to an 

executable plan, NNSA has reacted and adjusted to funding as it is doled out yearto-year, or month-to-month. Large construction projects, Life Extension Programs 

(LEP), and infrastructure modernization investments are managed with incremental 

funding. This creates significant inefficiency. In each area the enterprise routinely 

incurs program slips, delivery delays, program suspensions, and accumulations of 

deferred maintenance—all leading to increased long-term costs. 

In addition, some specific observations touch on the DOD–DOE relationship: 

First, a general finding: 

There is a lack of effective joint planning and budget coordination because of a 

fundamental lack of mechanisms to ensure requisite collaboration and consensus to 

address core mission requirements. As a consequence, DOD customers lack trust in 

NNSA’s ability to modernize facilities and execute warhead life extension programs. 

Second, a finding on recent working relationships: 

NNSA and DOD staffs spent much of 2012 working to achieve a common resource 

plan for the enterprise that would be geared to meeting DOD’s needs. This effort 

led to a tentative agreement in early 2013 on an NNSA program and budget that 

would be in line with the ‘‘3+2 Concept,’’ and DOD agreed to contribute additional 

funding to execute the program in FY14. In total, DOD has agreed to transfers of 

nearly $12 billion over multiple years in budget authority to DOE. 

During this period, a series of NNSA budget shortfalls were reported. These resulted most significantly from significant cost growth in the DOE programs. Other 

contributing factors included reductions in the overall NNSA budget due to Continuing Resolutions, congressional marks, the Budget Control Act, and the effects 

of sequestration. 

DOD has been frustrated by these continuing shortfalls, delays in agreed-upon 

programs, and requests for additional funding. DOD officials also have been frustrated by the limited budget and cost information provided by DOE/NNSA, and they 

have pressed for information on budgeting and program management processes in 

order to track the execution of the transferred funds. A satisfactory degree of visibility has not been achieved. Although these transfers were included in the President’s Budget, visibility of the funds was lost during the Congressional appropriations process. It appears the net effect of the transfer is that DOE budgets have increased by less than the amount by which DOD budgets have decreased. 

The cycle of DOD–NNSA engagement continues through the Nuclear Weapons 

Council, with additional attempts to reach convergence on realistic program and infrastructure plans that can guide NNSA budgets. There remain significant procedural issues that will need to be resolved to repair this relationship. Considerable 

work remains to be done: the Nuclear Weapons Council has a central role to play 

in creating an executable plan for the future stockpile agreed on by the two departments. This responsibility will require an orderly process for the Nuclear Weapons 

Council’s working groups to serve its principals and greater transparency between 

the two departments. 

Mr. COOPER. When NNSA talks about priority mission, does this include a serious 

commitment to safety and security? 

Mr. AUGUSTINE and Admiral MIES. The panel’s main focus has been on the efficacy of the governance mechanisms for achieving safe, secure operations. The interim report’s findings focus on how an improved governance system might achieve 

equal or better safety with practices that have proven effective in successful organizations. As implemented in NNSA, transactional oversight has proven to be expensive and counterproductive. More oversight does not necessarily equate to better 

oversight—or improved performance. Some specific observations include: 

Transactional oversight is expensive and counterproductive. 
96 

14Office of Management and Budget (OMB), Preparation, Submission, and Execution of the 

Budget, Circular A–11 (Washington, DC: Executive Office of the President, July 2013). 

Excessive and uncoordinated inspections, audits and data calls fuel inefficiencies 

and generate little value added; in fact, they may detract from the desired safety 

or security outcome. 

Witnesses note that the focus on compliance checklists can actually divert attention from the substance of safe and secure mission performance. 

Mr. COOPER. Has the NNSA Stockpile Stewardship and Management Plan been 

helpful to NNSA’s planning process and setting requirements? 

Mr. AUGUSTINE and Admiral MIES. Although there is currently some agreement 

between DOD and DOE/NNSA on the long-term concept for modernizing the stockpile, they have not converged on a long-term resource plan, nor have they converged 

on near-term mission and budget priorities. There remain fundamental differences 

in views on the appropriate composition of the weapon life extension program and 

the timing of deliverables. 

. . . Lacking strong leadership that unifies priorities, there has been no mechanism 

for the NNSA, its customers, and the national leadership to converge on a credible 

resource-loaded plan to chart the path ahead. The President’s annual Nuclear 

Weapons Stockpile Memorandum and the Nuclear Weapons Council evolving ‘‘baseline’’ plan, for instance, provide important direction, but they do not provide programmatic guidance. As discussed in Section 5 on NNSA’s collaboration with its customers, the Nuclear Weapons Council and the Mission Executive Council for interagency customer coordination continue to struggle in setting priorities, defining the 

enterprise’s needs, and identifying resources to support those needs. And, of course, 

planning efforts have been seriously undermined by the turbulent national budget 

environment as well as by NNSA’s inability to accurately estimate costs. 

Mr. COOPER. In FY14 NNSA achieved $80 million of efficiencies, $240 million 

short of its $320M goal. NNSA has not identified any efficiencies goals in FY15. Do 

you believe NNSA adequately taking a close look at efficiencies? 

Mr. AUGUSTINE and Admiral MIES. The panel’s interim report does not address 

the specific NNSA efficiency initiatives. However, the panel’s discussion of the inefficiencies of transactional oversight described in the answer to question 38, and the 

discussion of the potential benefits of adopting the Kansas City model for employing 

industrial standards, where feasible, suggests areas where potential improvements 

are evident. 

In addition, the panel notes that substantial improvements in the execution of 

programs for customer deliverables, and major construction projects are needed. 

These, too, may represent important targets for efficiency improvements. Some relevant observations from the interim report include: 

Program and project management is not supported at the staffing and funding 

levels that the private sector and other agencies have demonstrated are necessary 

to assure success, especially in the field, for the duration of major projects. Funding 

levels for reserves and contingencies are not even close to levels that have been 

demonstrated as necessary for major projects, especially recognizing the unique 

technical nature of many of the NNSA’s projects. When projects or programs proceed 

from design stages to production stages, there is not adequate configuration control 

of designs and too many unnecessary subsequent changes are allowed. 

The management practices for infrastructure upgrades and major facilities construction are also problematic. DOE’s guidance for such projects is contained in 

DOE Order 413, which aligns with the management practices prescribed in OMB 

Circular A–11 for Capital Acquisition projects.14 However, Order 413 is offered and 

viewed as guidance and not as required practice, so adherence and enforcement are 

weak. For instance, rigorous planning processes at the front end of a project, such 

as Analyses of Alternatives, are lacking. Circular A–11 covers everything from roles 

and functions to legal framework to the actual transmission of White House policy 

in the budgeting process. OMB requires agencies to establish a disciplined capital 

programming process that addresses project prioritization between new assets and 

maintenance of existing assets; risk management and cost estimating to improve the 

accuracy of cost, schedule and performance provided to management; and the other 

difficult challenges posed by asset management and acquisition. In establishing its 

Acquisition and Project Management Office, NNSA is trying to bring such discipline 

to NNSA project management. 

Mr. COOPER. GAO has issued reports overseeing NNSA management and programs since 1995. In a February 2012, providing another independent perspective, 

GAO stated that: ‘‘Laboratory and other officials have raised concerns that federal 

oversight of the laboratories’ activities has been excessive. With NNSA proposing to 

spend tens of billions of dollars to modernize the nuclear security enterprise, it is 
97 

important to ensure scarce resources are spent in an effective and efficient manner’’ 

and that ‘‘In many cases, NNSA has made improvements to resolve these safety and 

security concerns, but better oversight is needed to ensure that improvements are 

fully implemented and sustained. GAO agrees that excessive oversight and micromanagement of contractors’ activities are not an efficient use of scarce federal resources, but that NNSA’s problems are not caused by excessive oversight but instead result from ineffective departmental oversight.’’ 

In a 2013 testimony before the Strategic Forces Subcommittee of the House 

Armed Services Committee, GAO stated that: 

‘‘NNSA continues to experience major cost and schedule overruns on its projects, 

such as research and production facilities and nuclear weapons refurbishments, 

principally because of ineffective oversight and poor contractor management (. . .) 

GAO continues to believe, as it concluded in its January 2007 report, that drastic 

organizational change to increase independence is unnecessary and questions 

whether such change would solve the agency’s remaining management problems.’’ 

Do you agree? 

Mr. AUGUSTINE and Admiral MIES. A capability for independent cost estimates for 

major acquisition programs, coupled with a disciplined cost reporting system, is essential to effective program scoping and initiation, resource planning, source selection, and contract oversight and management. NNSA lacks expertise, data, and tools 

for independent costing, requirements evaluation, and program planning. Initial cost 

estimates for major NNSA programs have been found to be off not by 20–30 percent 

but by factors of nearly two to six: • B61 LEP: An initial estimate (2010) assumed that the cost would be comparable 

to that of the W76 LEP in the range of $4 billion. However, lab experts, when 

engaged by NNSA, concluded that the B61 LEP would be much more complex 

than the W76. When the final B61 LEP cost report was completed, the estimate 

rose to $8 billion. • Los Alamos CMRR facility (the Chemistry and Metallurgy Research Replacement): An initial estimate (2005) placed the ceiling at $975 million; by 2010 this 

ceiling had risen to $5.8 billion, with a three to seven year delay. Now, the 

project is being deferred five years, and the design is being reconsidered. • Y–12 highly enriched uranium processing facility (UPF): An initial estimate 

(2004) placed the maximum at $1.1 billion; this was raised to $3.5 billion 

(2007), and then to $6.5 billion (2010). An independent review by the Army 

Corps of Engineers placed the maximum cost at $7.5 billion (2011). Recently 

discovered design flaws (the ceiling is too low) add an additional $0.5 billion. 

Now, the project is being delayed and the design is being reconsidered. • Savannah River plutonium disposition facility (the Mixed-Oxide Fuel Fabrication Facility, or MOX): DOE approved a cost estimate of $4.8 billion (2007) and 

start of operations in September 2016. Although construction began in August 

2007, NNSA subsequently increased the estimate to $7.7 billion (2012) with the 

start of operations delayed to November 2019. Now the project is in a strategic 

pause as DOE evaluates other options for plutonium disposition. 

NNSA’s poor track record of planning for and estimating the costs of these and 

other major projects is a major source of dissatisfaction among the national leadership and customers, and further undermines NNSA’s credibility. Both NNSA and 

DOE are engaged in initiatives to create needed independent cost estimating capabilities, including the development of the requisite staffs, tools, and data. Success 

with these initiatives will help repair its damaged credibility, and will be an essential precondition for NNSA to regain trust with its critics. 

Mr. COOPER. What would you recommend to improve contractor accountability? 

Mr. AUGUSTINE and Admiral MIES. The panel’s interim report has focused primarily on diagnosing the current situation. Our recommendations will come in the 

final report. The interim report observes that current contracting arrangements 

place too little emphasis on mission performance, and too much emphasis on complying with administrative requirements. The major findings in the interim report 

are as follows: 

A. Misguided Contract [Requirements] 

[Misguided contract requirements] reinforce the transactional nature of the relationship and undermine the FFRDC partnership with the NNSA laboratories. Significant award fees combined with mission-support-oriented performance evaluation 

criteria are troublesome in that they reinforce DOE/NNSA’s emphasis both at headquarters and in the field on functional compliance and not mission performance. 

Contractual arrangements also can limit the contributions of the M&O contractor 

parent organizations. At some sites, the parent organization is exerting a strong influence: the Kansas City Plant offers an example in which the parent company is 

aggressively driving a proven corporate culture into the workplace. However, several 
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15 At benchmark organizations, the new entrants are carefully screened and selected, in part 

based on suitability for long-term careers within the organization. Employees tend to spend long 

careers within the organization. Promotion to the most senior levels (other than a political appointee) is usually from within, and these organizations favor those with broad-based career experience within the organization. 

issues that have hindered the broader realization of these objectives need to be considered in clarifying future roles.... 

Last, and most important, performance evaluation criteria that focus incentives 

on compliance do little to encourage building a strong M&O leadership team. The 

recent transition to Strategic Performance Evaluation Plans could help catalyze the 

shift away from transactional oversight, but this transition will require a sweeping 

cultural change at NNSA and its Field Offices and a redesign of the weighting of 

the performance objectives to better capture M&O contributions to mission priorities. 

Mr. COOPER. Have you found the Department of Energy needs new or additional 

hiring or firing authorities, or authority to influence contractor employee hiring or 

firing? 

Mr. AUGUSTINE and Admiral MIES. The panel’s interim report does not provide 

recommendations, but the panel will address this question in its final report. The 

panel’s findings suggest significant action is needed to address skill needs. The panel’s findings (as also noted in the answer to question 10) are as follows: 

The NNSA has not taken the steps necessary to build a cohesive culture that instills accountability for customer deliverables, nor has it instituted the personnel 

programs needed to build a workforce with the necessary technical and managerial 

skills for operations. The purposeful development of leaders, managers, and staffs 

is essential to any governance system. The effective organizations benchmarked for 

this study focus on personnel management to create a reinforcing virtuous cycle: 

proven leaders emerge from careful selection and decades of experience involving 

careful development and screening. Such leaders make a system work well. They 

also attract and inspire other high-caliber people to join and stay in their organizations.15 As one example, the current Director of Navy Strategic Systems Programs 

(SSP) started his career within that organization as a junior officer, and almost all 

of his subsequent assignments have been in the command. In addition to deep familiarity resulting from a long career with the same organization, long command tours 

provide needed continuity and allow the Director to promulgate and sustain the desired culture. Recently, the tenure of the SSP’s Director was extended from about 

four years to eight years to strengthen this benefit. 

A key staffing issue for the NNSA is the lack of operational experience in headquarters. In the peak years of the nuclear weapons program, the operational core 

of the nuclear enterprise was located in the Albuquerque Operations Office. Albuquerque synchronized the cycle of design-test-build throughout the Cold War, until 

1992, when the production of new weapons was suspended. Albuquerque was officially disbanded ten years later, in 2002. NNSA headquarters assumed Albuquerque’s operating functions (which were greatly diminished by then since the U.S. had 

ceased producing warheads), and decades of operational experience, knowledge, and 

technical expertise within the Albuquerque staff was lost in the reorganization. 

Now, as the United States embarks on an intensive series of warhead life extension programs covering the entire stockpile, a leadership team with deep experience 

and continuity (such as the team in the Albuquerque Operations Office) would be 

an enormously valuable asset for governing the enterprise. Creating and sustaining 

a personnel management system to build the needed culture, skills, and experience 

is a vital component of governance reform. 

QUESTIONS SUBMITTED BY MS. SANCHEZ 

Ms. SANCHEZ. Independent Safety oversight: Has independent safety oversight 

helped maintain safety as a priority across the nuclear enterprise? 

Mr. AUGUSTINE and Admiral MIES. The panel’s interim report does not address 

the independent role of the DNFSB. The report did find: 

The internal weaknesses in DOE’s regulatory apparatus also have significantly 

weakened the DOE/NNSA’s ability to engage effectively with the Defense Nuclear 

Facilities Safety Board. Congress chartered the DNFSB to provide independent 

oversight, by identifying safety concerns and raising issues with respect to the 

DOE’s implementation of its own orders. At the same time Congress has recently 

stated that, ‘‘it is incumbent upon the Secretary to reject or request modifications 

to DNFSB recommendations if the costs of implementing the recommendations are 
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16 ‘‘Joint Explanatory Statement to Accompany the National Defense Authorization Act for 

Fiscal Year 2014,’’ Congressional Record 159: 176 (December 12, 2013), H7968. 

not commensurate with the safety benefits gained.’’ 16 Given the statutory role of the 

DNFSB as an independent oversight arm for public safety, and the lack of a DOE 

analytical capability to effectively evaluate options to respond to its recommendations, the DNFSB exerts a dominant influence over DOE’s risk management in nuclear safety policies and programs, which at times leads to actions that do not reflect prudent risk management or safety concerns. 

Ms. SANCHEZ. Cost estimates: Concern about the effectiveness of NNSA governance of the nuclear security enterprise has been increasing, in the context of several 

failures. These failures include all major NNSA projects significantly increasing in 

cost and incurring delays, including billion dollar increases in the cost estimates for 

the B61 life extension program, the uranium facility at Y–12 (Tennessee), the plutonium facility (at Los Alamos), and the MOX facility (at the Savannah River Site, 

SC). 

Is NNSA equipped with the expertise and processes to provide accurate cost estimates? Are they taking advantage of DOD CAPE Office which has significant experience in this area? 

Mr. AUGUSTINE and Admiral MIES. The Panel met with CAPE officials as well as 

the NNSA official responsible for establishing cost estimating and resource analysis 

capabilities in NNSA. CAPE was heavily involved in the joint activities of 2012 cited 

in the panel’s interim report. It appears this involvement has ceased. The relevant 

interim report findings are as follows: 

NNSA’s unreliable planning and cost estimating, combined with its lack of openness, has engendered significant distrust within the DOD. Beginning in 2010, the 

DOD has worked with DOE/NNSA to transfer funds from DOD’s proposed budget 

to the NNSA account for weapons activities essential for sustaining deterrence capabilities—including LEPs, stockpile surveillance, Chemical and Metallurgy Research 

Replacement (CMRR), and UPF. 

NNSA and DOD staffs spent much of 2012 working to achieve a common resource 

plan for the enterprise that would be geared to meeting DOD’s needs. This effort 

led to a tentative agreement in early 2013 on an NNSA program and budget that 

would be in line with the ‘‘3+2 Strategy,’’ and DOD agreed to contribute additional 

funding to execute the program in FY14. In total, DOD has agreed to transfers of 

nearly $12 billion over multiple years in budget authority to DOE. 

During this period, a series of NNSA budget shortfalls were reported. These resulted most significantly from significant cost growth in the DOE programs. Other 

contributing factors included reductions in the overall NNSA budget due to Continuing Resolutions, congressional marks, the Budget Control Act, and the effects 

of sequestration. 

DOD has been frustrated by these continuing shortfalls, delays in agreed-upon 

programs, and requests for additional funding. DOD officials also have been frustrated by the limited budget and cost information provided by DOE/NNSA, and they 

have pressed for information on budgeting and program management processes in 

order to track the execution of the transferred funds. A satisfactory degree of visibility has not been achieved. Although these transfers were included in the President’s Budget, visibility of the funds was lost during the Congressional appropriations process. It appears the net effect of the transfer is that DOE budgets have increased by less than the amount by which DOD budgets have decreased. 

The cycle of DOD–NNSA engagement continues through the Nuclear Weapons 

Council, with additional attempts to reach convergence on realistic program and infrastructure plans that can guide NNSA budgets. There remain significant procedural issues that will need to be resolved to repair this relationship. Considerable 

work remains to be done: the Nuclear Weapons Council has a central role to play 

in creating an executable plan for the future stockpile agreed on by the two departments. This responsibility will require an orderly process for the Nuclear Weapons 

Council’s working groups to serve its principals and greater transparency between 

the two departments. 

Ms. SANCHEZ. Non-proliferation: There is significant pressure on NNSA to deliver 

nuclear weapons sustainment programs on time and on budget. Do you see the same 

pressure to prioritize nuclear non-proliferation? 

Mr. AUGUSTINE and Admiral MIES. The interim report did not address the priorities for the non-proliferation program. The panel’s findings relating to non-proliferation and other mission areas are as follows: 

Given the overall success of the interagency projects, the panel did not focus deeply on the enterprise’s relationships with its interagency customers. Nevertheless, experts identified several issues for the panel’s consideration. One is the tactical ap-
100 

17 Homeland Security Act of 2002, Sec. 309, authorizes DHS use of DOE national laboratories 

and sites via joint sponsorship, direct contract, or ‘‘work for others.’’ Labs and sites perform such 

work on an equal basis to other missions at the laboratory and not just on a noninterference 

basis. DHS does not pay costs of DOE or its contractors in excess of the amount that the DOE 

pays. DHS’ position is that it strongly prefers using authorities given it in law to allow it to 

work across the DOE complex in response to proposals. 18 A full list of those who provided not-for-attribution testimony to the panel may be found 

in Appendix A. 

proach taken by many customers: much of this work for external sponsors is accomplished using annual task orders with no long-term commitment. There is also a 

range of areas where working relationships could be simplified and improved: 

• Interagency tasks are typically quite small and each laboratory manages hundreds of such tasks. (For example, LLNL reported it manages about 800 interagency tasks, many providing a few tens of thousands of dollars in support.) 

• Approval processes are needlessly cumbersome. Tasks are reviewed and approved individually. Even small, routine contracts require multiple levels of approval and can take weeks. 

• Delays are not uncommon in the movement of funds from sponsors to the labs. 

In some cases, technical efforts may be put on hold pending arrival of funds. 

• Year-to-year uncertainty in funding makes it difficult to forecast demand and 

manage professional staffs. 

• Recapitalization of scientific and other physical capital is not addressed. While 

external funding covers the overhead costs immediately associated with the 

work being accomplished, it does not cover the cost of refurbishing and replacing the unique lab capital equipment and facilities used in some tasks. 

Some customers have found ways to resolve some of these challenges by employing interagency agreements with DOE/NNSA in which the external funding organization makes a standing commitment to funding support at a specified level of effort.17 While necessarily subject to the availability of annual appropriations, this 

eliminates most of the uncertainty, enabling the nuclear weapon labs to better align 

and manage professional staffs and plan and conduct technical work. Capital investments to develop needed capabilities for interagency customers are a more difficult 

challenge, but they too have been overcome in limited cases. NNSA has had to approach this challenge on a facility-by-facility basis. 

Ms. SANCHEZ. Please provide for the record a list of those who have testified or 

made presentations before the full panel, and those that the panel subcommittees 

have met with. 

Mr. AUGUSTINE and Admiral MIES. The attached list, which is an annex to the 

interim report, identifies the individuals and organizations consulted by the panel. 

The general approach is outlined in the interim report as follows: 

Recognizing that there has already been extensive examination of the enterprise, 

the panel reviewed thousands of pages produced by studies and reviews conducted 

both before and since the creation of the NNSA. The members heard from many experts, both inside and outside of the enterprise.18 This included past and present 

senior leadership in the Department of Energy (DOE), NNSA, and Department of 

Defense (DOD), Field Office managers, Management and Operating (M&O) executives and a cross-section of personnel at each site, Laboratory Directors, chairmen 

of previous studies of the enterprise, Congressional staff, representatives from the 

customer communities (DOD, Intelligence Community, the Federal Bureau of Investigation, Department of State, Department of Homeland Security), the Defense Nuclear Facilities Safety Board (DNFSB), the Government Accountability Office, and 

the British nuclear weapons program. 

The panel divided its field investigative work into four fact-finding groups as follows: 

• The National Leadership group focused on the perspectives of the Executive 

branch (National Security Council Staff, Office of Management and Budget 

(OMB), and Office of Science and Technology Policy); the Legislative branch 

(both the Senate and the House of Representatives, and both the appropriations 

and authorization committees); Department of Energy headquarters; and the 

Nuclear Regulatory Commission, the DNFSB and other national-level stakeholders such as the Occupational Safety and Health Administration (OSHA) 

and the American Federation of Labor and Congress of Industrial Organizations 

(AFL–CIO). 

• The NNSA group interviewed leadership personnel within NNSA headquarters 

and also conducted site visits to the three laboratories (Los Alamos National 

Laboratory (LANL), Lawrence Livermore National Laboratory (LLNL), and 

Sandia National Laboratory (SNL)), the four production plants (Kansas City 
101 

Plant, Pantex, Savannah River Site, and Y–12 National Security Complex), and 

the Nevada National Security Site (NNSS). These visits incorporated discussions with the Field Offices (including the Albuquerque Complex) and the M&O 

contractor leadership as well as tours of some of each site’s important facilities. 

• The Customer group obtained perspectives of the clients of the enterprise to include DOD, the Intelligence Community, Department of State, Department of 

Homeland Security, the Federal Bureau of Investigation, and the British nuclear weapons program. 

• The Benchmarking group examined successful high-risk, high technology organizations to identify potential processes and structures that might be adopted 

by the enterprise. Among these organizations were Naval Reactors, Navy Strategic Systems Programs, National Aeronautics and Space Administration 

(NASA), representatives from the civil nuclear power industry, DOE’s Office of 

Science, the Centers for Disease Control, the Federal Aviation Administration, 

and the British nuclear weapons program. 

Ms. SANCHEZ. Do the M&O contractors have the correct incentives to support 

NNSA’s mission and deliver products on time and on budget? The Sandia National 

Laboratory contract has been extended at least two years, after a previous 2-year 

extension, while other contracts are going on 10 years. Is there adequate competition? Has the promise of added competition and cost savings, which was the goal 

of privatizing the nuclear enterprise, materialized? Has this model worked? 

Mr. AUGUSTINE and Admiral MIES. Contract incentives reinforce the transactional 

nature of the relationship and undermine the FFRDC partnership with the NNSA 

laboratories. Significant award fees combined with mission-support-oriented performance evaluation criteria are troublesome in that they reinforce DOE/NNSA’s 

emphasis both at headquarters and in the field on functional compliance and not 

mission performance. 

. . . performance evaluation criteria that focus incentives on compliance do little to 

encourage building a strong M&O leadership team. The recent transition to Strategic Performance Evaluation Plans could help catalyze the shift away from transactional oversight, but this transition will require a sweeping cultural change at 

NNSA and its Field Offices and a redesign of the weighting of the performance objectives to better capture M&O contributions to mission priorities. 

It is clear that the recent acting NNSA Administrator recognized the problems 

with the government-M&O relationships. He has been working to clarify roles and 

responsibilities, focusing on the relationships among the NNSA Administrator, the 

Field Office Managers, and the M&O executives. In the field, there is evidence of 

improved communication and collaboration between the M&Os and the NNSA Field 

Offices, especially at the plants. They have demonstrated a willingness to share information and otherwise communicate and collaborate, embracing the concept that 

they are a team ultimately working toward the same purpose. Much more attention 

to clarifying and managing these relationships will be needed. 

Æ