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i 

25–050 2017

[H.A.S.C. No. 115–18] 

OVERSIGHT REVIEW OF 

INFRASTRUCTURE NEEDS AND 

PROJECTS READY FOR IMMEDIATE 

IMPLEMENTATION IN THE NUCLEAR 

SECURITY ENTERPRISE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT 

AND INVESTIGATIONS 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MARCH 16, 2017 
(II) 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

VICKY HARTZLER, Missouri, Chairwoman 

K. MICHAEL CONAWAY, Texas 

MATT GAETZ, Florida 

JIM BANKS, Indiana 

LIZ CHENEY, Wyoming 

AUSTIN SCOTT, Georgia 

SETH MOULTON, Massachusetts 

TOM O’HALLERAN, Arizona 

THOMAS R. SUOZZI, New York 

(Vacancy) 

HEATH BOPE, Professional Staff Member 

BARRON YOUNGSMITH, Counsel 

ANNA WATERFIELD, Clerk 
(III) 

C O N T E N T S 

Page 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Hartzler, Hon. Vicky, a Representative from Missouri, Chairwoman, Subcommittee on Oversight and Investigations ............................................................. 1 

O’Halleran, Hon. Tom, a Representative from Arizona, Subcommittee on 

Oversight and Investigations .............................................................................. 3 

WITNESSES 

Klotz, Lt Gen Frank G., USAF (Ret.), Administrator, National Nuclear Security Administration, accompanied by James J. McConnell, Associate Administrator for Safety, Infrastructure, and Operations, National Nuclear Security Administration .............................................................................................. 4 

McMillan, Dr. Charles F., Director, Los Alamos National Laboratory ............... 5 

Reichert, Michelle, Deputy Enterprise Manager, Consolidated Nuclear Security, LLC ............................................................................................................... 6 

Sullivan, Hon. Sean, Chairman, Nuclear Defense Facilities Safety Board ........ 8 

APPENDIX 

PREPARED STATEMENTS: 

Hartzler, Hon. Vicky ........................................................................................ 31 

Klotz, Lt Gen Frank G., joint with James J. McConnell .............................. 35 

McMillan, Dr. Charles F. ................................................................................. 44 

Moulton, Hon. Seth, a Representative from Massachusetts, Ranking 

Member, Subcommittee on Oversight and Investigations ......................... 33 

Reichert, Michelle ............................................................................................. 52 

Sullivan, Hon. Sean .......................................................................................... 60 

DOCUMENTS SUBMITTED FOR THE RECORD: 

Letter to Secretary of Energy, with photos .................................................... 69 

NNSA Unfunded Priorities List, October 2016 .............................................. 84 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Mr. Suozzi ......................................................................................................... 91 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

Mr. DesJarlais .................................................................................................. 103 

Mrs. Hartzler .................................................................................................... 95 

Mr. Rogers ......................................................................................................... 98 

(1) 

OVERSIGHT REVIEW OF INFRASTRUCTURE NEEDS AND 

PROJECTS READY FOR IMMEDIATE IMPLEMENTATION 

IN THE NUCLEAR SECURITY ENTERPRISE 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, Washington, DC, Thursday, March 16, 2017. 

The subcommittee met, pursuant to call, at 2:21 p.m., in room 

2212, Rayburn House Office Building, Hon. Vicky Hartzler (chairwoman of the subcommittee) presiding. 

OPENING STATEMENT OF HON. VICKY HARTZLER, A REPRESENTATIVE FROM MISSOURI, CHAIRWOMAN, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

Mrs. HARTZLER. Good afternoon. This hearing will come to order. 

I appreciate everyone’s patience during vote series. I know we are 

getting started a little late. But in connection with today’s hearing, 

I welcome the members of the full committee who are not permanent members of the subcommittee who are or will be attending. 

I also want to recognize and thank the distinguished gentleman 

from Alabama, Chairman Rogers of the Strategic Forces Subcommittee, for attending this hearing. 

I ask unanimous consent that these committee members be permitted to participate in this hearing, with the understanding that 

all sitting subcommittee members will be recognized for questions 

prior to those not assigned to the subcommittee. 

Without objection, so ordered. 

Many of the buildings, facilities, and laboratories of the U.S. nuclear weapons enterprise were constructed over 65 years ago, in the 

1940s and 1950s. These facilities currently have a backlog of deferred essential repairs, rehabilitation, and replacement construction totaling $3.7 billion. Infrastructure needs at this magnitude, 

if not addressed, threaten both the mission of the National Nuclear 

Security Administration, or NNSA, its labs and facilities, as well 

as the safety of its workers. 

The House Armed Services Committee has made NNSA infrastructure needs a high priority in recent years. The committee has 

previously authorized substantial increases in funding over Presidents’ past budget requests. However, not until last year did the 

NNSA, under the direction of the last Secretary of Energy, halt 

growth in the deferred maintenance backlog. This is an important 

first step, because as the old saying goes, once you are in a hole, 

stop digging. 

The funding challenges for the nuclear enterprise infrastructure 

are twofold. We need to keep the current infrastructure from dete-
2 

riorating further. This is an expensive proposition, especially when 

we must also support day-to-day funding requirements. And we 

also need to provide additional funding to start chipping away at 

the massive infrastructure backlog. 

We also need to look at policy, regulation, or statute changes that 

can be implemented. We can do this without sacrificing critical congressional oversight or for those that supervise projects within 

NNSA. 

There is an above-threshold reprogramming limit of $5 million 

and a general plant and projects, or GPP, limit of $10 million. We 

need to consider if such limits are still relevant in today’s fiscal environment. Perhaps they can be modified to more effectively and efficiently implement and oversee infrastructure projects. 

Finally, we need to establish and maintain a transparent and 

open dialogue about which funding mechanisms are most appropriately utilized. It is possible to exercise the normal line item authorization and appropriations process or use third-party, publicprivate partnership financing arrangements. 

Now, regardless of funding mechanisms, we need to ensure that 

construction and recapitalization initiatives are not plagued with 

major cost overruns and scope underruns that many of NNSA’s 

large line item projects in the past have experienced. 

An exemplary model project not on the bad list, and one that was 

well implemented using third-party, public-private partnership financing, is one that I don’t mind sharing about from my home 

State of Missouri. The Kansas City National Security Campus 

project enabled rapid replacement of the previous dilapidated facility that was housed in a former World War II-era Navy aircraft engine manufacturing plant built in 1942. 

In addressing the Kansas City infrastructure project, NNSA and 

the General Services Administration competitively selected CenterPoint Zimmer, a private developer, to replace the 70-year-old Bannister Federal Complex. The 20-year lease on the new facilities not 

only provides a flexible, responsive infrastructure that helps attract 

top talent, but also saves the taxpayer over $150 million annually 

in lower facility maintenance, energy, and other costs. Additionally, 

this project was completed ahead of schedule and under budget. 

Now the outstanding and professional workforce at the Kansas City 

campus today has a modern, clean, and safe environment in which 

to conduct their vital and unique work for our nuclear enterprise. 

This is the standard that we should all hope to achieve for our 

skilled and dedicated professionals throughout the entire nuclear 

enterprise if we hope to recruit, train, and retain the best of the 

best our scientific and engineering community has to offer. 

So I look forward to discussing the infrastructure needs of the 

enterprise with our distinguished panel of witnesses we have before us today. But before I introduce the witnesses, I turn to Representative O’Halleran, sitting in for the subcommittee ranking 

member, for any opening remarks that he would like to make. 

[The prepared statement of Mrs. Hartzler can be found in the 

Appendix on page 31.] 
3 

STATEMENT OF HON. TOM O’HALLERAN, A REPRESENTATIVE 

FROM ARIZONA, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

Mr. O’HALLERAN. Thank you, Madam Chairwoman. 

I would like to thank you, our witnesses, for appearing before 

this panel today. 

Today, our nuclear weapons enterprise is at a crossroads as we 

begin to make the first major payouts on a nuclear recapitalization 

program that is expected to cost over $1 trillion over 30 years. 

As we do this, the Department of Energy, via the National Nuclear Security Administration, is focusing extensively on efforts to 

design and build new weapons systems and new nuclear facilities. 

Reasonable investments in our nuclear deterrent are essential, but 

I would caution that we should be wary of doing all of this at the 

expense of adequate maintenance for our existing nuclear labs and 

infrastructure. 

When we discuss crumbling ceilings and flooded hallways at our 

nuclear facilities today, I encourage us to ask not just can we build 

a brand-new building to replace these facilities and how will we 

find the money, but also, how did we get to this point, and are 

there smart practices and proper incentives that we could have 

adopted so that this maintenance breakdown could have been 

avoided? 

I am concerned that there may be ingrained patterns of safety 

and budget practice at the NNSA that do not adequately prioritize 

maintenance over our programmatic requests. These maintenance 

problems are quite alarming when you consider that proper maintenance in these facilities jeopardizes the morale and safety of our 

nuclear workforce and poses the risk of a dangerous nuclear accident. 

Many of the facilities we are talking about here are old, but for 

a frame of reference, these facilities are comparable to many run 

by the Navy’s Naval Reactors office, which are also the same age, 

yet the facilities run by the Naval Reactors are in excellent shape 

and their safety records are stellar, because the Naval Reactors applies different maintenance and safety procedures and tripwires. 

Nearly 60 percent of Naval Reactors facilities are 50 to 70 years 

old, but they are in much better repair. That suggests that we 

could be doing prioritization, maintenance, and safety better. 

In the current budget environment, we can’t afford for our nuclear enterprise to be governed by inertia and the ways of the past. 

Thank you, Madam Chair. 

Mrs. HARTZLER. Thank you, Mr. O’Halleran. 

So I am pleased to recognize our witnesses today, and I want to 

thank them for taking the time to be with us. We have the Honorable Frank Klotz, the administrator of the National Nuclear Security Administration and retired Air Force lieutenant general. We 

have Mr. James McConnell, associate administrator at the National Nuclear Security Administration for safety, infrastructure, 

and operations. We have Dr. Charlie McMillan, laboratory director 

at the Los Alamos National Laboratory. We have Ms. Michelle 

Reichert, deputy enterprise manager for Consolidated Nuclear Security, LLC, which oversees operations at the Pantex nuclear facility in Amarillo, Texas, and at the Y–12 nuclear complex in Oak 
4 

Ridge, Tennessee. And the Honorable Sean Sullivan, chairman of 

the Defense Nuclear Facilities Safety Board. 

So thank you all for being with us today, and we will now hear 

your opening statements. 

Administrator Klotz, my understanding is that you will be giving 

the opening statement for Mr. McConnell and yourself. So we will 

begin with you. 

STATEMENT OF LT GEN FRANK G. KLOTZ, USAF (RET.), ADMINISTRATOR, NATIONAL NUCLEAR SECURITY ADMINISTRATION, ACCOMPANIED BY JAMES J. McCONNELL, ASSOCIATE 

ADMINISTRATOR FOR SAFETY, INFRASTRUCTURE, AND OPERATIONS, NATIONAL NUCLEAR SECURITY ADMINISTRATION 

General KLOTZ. Thank you, Chairwoman Hartzler and Representative O’Halleran and other members of the committee and 

subcommittee. Thank you for the opportunity to discuss the challenges and progress made by the Department of Energy’s National 

Nuclear Security Administration in improving the state of our infrastructure. We recognize the subcommittee and the committee’s 

important oversight role and appreciate your willingness to highlight the importance of our critical national security missions. 

As you said, I am pleased to be joined by Jim McConnell, who 

has the principal responsibility for safety, infrastructure, and operations within the NNSA headquarters. We have provided the subcommittee with a written statement and respectfully request that 

it be submitted for the record. 

Let me emphasize at the outset that the success of the Nation’s 

nuclear security enterprise and its workforce depends upon safe, 

reliable, and modern infrastructure at our laboratories, production 

plants, and other facilities. Unfortunately, as has already been 

pointed out, much of this infrastructure is antiquated, with many 

facilities dating back to the Eisenhower administration and in 

some cases even to the Manhattan Project era. As a result, our critical operations are subject to increasing risk, as is the physical 

safety of our people. 

As we contend with this aging infrastructure, NNSA is presently 

busier than we have been in many, many years. We are currently 

conducting three warhead life extension programs and one major 

alteration to ensure the long-term health of our nuclear deterrent, 

in addition to our usual stockpile stewardship activities. This 

tempo of operations has put increased pressure on an already fragile infrastructure. This is also true for the Office of Naval Reactors, 

which over the past 10 years has had to increase resource allocation to support aging facilities. 

Although the role of nuclear weapons in our national security 

strategy is widely understood and enjoys broad bipartisan support, 

the link between nuclear deterrence and the infrastructure that 

supports it is less appreciated. As I have stated before, before this 

committee and elsewhere, I can think of no greater threat to the 

national nuclear security enterprise than the state of NNSA’s infrastructure. We are long overdue to build a modern, safe complex 

that will meet military requirements, keep the deterrent safe, secure, and effective, and enhance worker and public safety. 
5 

My written statement catalogues our many efforts to improve 

NNSA’s infrastructure over the long-term by arresting the growth 

of deferred maintenance, gradually reducing it across the enterprise, disposing of excess facilities, and building new, modern facilities for our workforce where appropriate. It also describes our effort to ensure the long-term availability of the strategic materials 

associated with nuclear weapons—plutonium, uranium, tritium, 

lithium, and others—which are essential to the Nation’s nuclear 

deterrent. 

All of these activities are being more effectively and efficiently 

managed by employing new analytical and decision-making tools 

over the past few years. In particular, NNSA is making riskinformed management decisions using capabilities such as the Mission Dependency Index and BUILDER, which use hard data to 

evaluate assets and prioritize repair and investments. 

Furthermore, improved contract and project management practices are providing clear lines of authority for managers, improving 

cost and schedule performance, and ensuring that the most qualified people are managing NNSA’s work. 

So, again, I appreciate this subcommittee’s desire to draw attention to both our successes and to our challenges. With that, Jim 

and I look forward to answering any questions that you may have. 

[The joint prepared statement of General Klotz and Mr. McConnell can be found in the Appendix on page 35.] 

Mrs. HARTZLER. Thank you very much. 

Dr. McMillan. 

STATEMENT OF DR. CHARLES F. McMILLAN, DIRECTOR, LOS 

ALAMOS NATIONAL LABORATORY 

Dr. MCMILLAN. Chairwoman Hartzler, Representative O’Halleran, members of the committee, members of the subcommittee, 

thank you for the invitation to come speak today. 

Last fall in testimony, I said that the National Nuclear Security 

Administration’s laboratory and plant infrastructure is the foundation that supports our Nation’s nuclear weapons enterprise. I personally have devoted 34 years of my career to working in the weapons program, and based on that experience, I bring an understanding of the set of capabilities that are needed to ensure a safe, 

secure, and effective stockpile. 

The current set of scientific tools that is used to manage the 

stockpile are available today because of decisions that Congress 

made over the last several decades. Those decisions were informed 

by a belief that scientific analysis was the best method to support 

the stockpile without additional nuclear testing. Your decisions 

today will help set the course for the future for us. 

What are the essential features of our enterprise in 2030? 2030 

is a date I think about a lot. I think they include modern facilities 

that will handle high explosives, hazardous materials, plutonium, 

tritium, uranium, lithium; and in addition, new scientific facilities, 

like the enhanced capability for subcritical experiments and others, 

that will be needed to qualify new materials and manufacturing 

processes before they are introduced into the stockpile. 

Furthermore, we must not overlook the investments in the people who are the stewards of the stockpile when discussing infra-
6 

structure. The ability to attract, educate, and retain the bright 

minds who make up our next generation of weapons scientists and 

engineers depends on your investments. 

My written testimony focuses on three main areas: shovel-ready 

projects, plutonium infrastructure, and managing risk in order to 

eliminate hurdles. 

The shovel-ready projects that I address are more tactical efforts 

that by themselves should not be expected to solve the longer-term 

strategic infrastructure issues that we face. A recent review that 

was led by Mr. McConnell detailed more than $3 billion worth of 

needed investments across our enterprise, with about a third of 

those at Los Alamos. Many of these, though not all, are shovelready. 

Our country currently has an extremely limited capability to 

manufacture plutonium pits. A government analysis of alternatives 

that is currently underway evaluates the construction of plutonium 

modules that would connect as extensions to the plutonium facility 

at Los Alamos. These modules are designed to provide two important capabilities: First, the ability to reach the military-required 

capacity of 50 to 80 pits made in a year; and second, to substantially reduce the risk that is associated with the operation of our 

plutonium facility. 

In order to meet these goals that are currently set for toward the 

end of the 2020s, we have to take action and make decisions now. 

As Chairwoman Hartzler mentioned in her opening comments, 

the laboratories and plants have used general plant projects, or 

GPP, as an efficient way to address modest-scale infrastructure 

needs. One way to reduce hurdles would be to raise the GPP limit, 

and based on my conversations with my fellow lab directors, we believe $30 million would be a good target to aim for, and then to 

index that to inflation. 

Finally, on the subject of risk. Risk is inherent to laboratory and 

plant operations. Past practice has led many government managers 

as well as laboratory managers to be extremely risk averse. Risks 

can only be managed; they cannot be eliminated. Well-managed 

risk enables mission. 

Thank you for the opportunity to testify today, and I welcome 

your questions. 

[The prepared statement of Dr. McMillan can be found in the Appendix on page 44.] 

Mrs. HARTZLER. Thank you very much, Dr. McMillan. 

Ms. Reichert. 

STATEMENT OF MICHELLE REICHERT, DEPUTY ENTERPRISE 

MANAGER, CONSOLIDATED NUCLEAR SECURITY, LLC 

Ms. REICHERT. Chairwoman Hartzler, Representative O’Halleran, 

Representative Rogers, and members of the subcommittee, thank 

you for the opportunity to speak with you today about the infrastructure and deferred maintenance challenges facing the production plants and the laboratories that make up our nuclear security 

enterprise; more close to home for me, the Pantex Plant in Amarillo, Texas, and the Y–12 National Security Complex in Oak 

Ridge, Tennessee. 
7 

First, I would like to thank the committee for its longstanding 

support. The patriotic men and women that work at Pantex and Y– 

12 are grateful for the committee’s steadfast commitment to maintaining our nuclear deterrent. I would personally like to thank and 

express my appreciation to all of you for continuing to shine a light 

on this very important issue. 

Our dedicated employees at both sites diligently plan and work 

to maintain our production facilities in a safe and secure working 

environment, but the effort necessary to sustain our capabilities 

continues to grow. What we do at Pantex and at Y–12 doesn’t always get a lot of attention, but the work we do every day is vital 

to the ongoing security of our Nation and her allies. 

Much of that work takes place in buildings that helped win 

World War II and the Cold War, but the march of time has certainly taken its toll on these facilities. Many of our employees continue to experience roofs that leak onto their workspaces, inadequate heating and air conditioning systems, routine encounters 

with rodents and even snakes in their work environment. They deserve so much more. 

We have approximately $800 million of deferred maintenance 

currently on our books between Pantex and Y–12. Given the current pace of funding, erasing that backlog will be impossible, and 

we experience issues that affect production every day as a result. 

I do not, however, want you to think we are sitting idly by. Along 

with eliminating excess and deteriorating facilities, we are embarking on the largest set of capital construction projects at both sites 

seen in decades. Through third-party financing, a new administrative support complex is being built at Pantex. It will provide stateof-the-art workspace for 1,100 workers and improve recruiting and 

retention efforts. We also recently finished construction on a new 

High Explosive Pressing Facility at Pantex, and at Y–12 the Uranium Processing Facility project is well underway. 

With an appropriate investment, we could accelerate efforts to 

reduce the deferred maintenance backlog at both sites by moving 

forward on a broad complement of near-term efforts, ranging from 

capital construction to new roofs, replacement of our HVAC [heating, ventilation, and air conditioning] equipment, installation of 

new electrical equipment. Each of those projects would help us reduce the risks to our workers and to our mission. 

Near-term funding, combined with long-term recapitalization, aggressive disposition of our excess facilities, and increased utilization of additional funding approaches, as discussed already by my 

colleague, is necessary to preserve the mission work that occurs at 

our sites. Such an approach is essential to ensuring the safety of 

our workforce and essential to keeping Pantex and Y–12 on track 

to provide a safe, secure, and effective nuclear deterrent for our 

Nation. 

Again, thank you for the opportunity to speak to you today. 

[The prepared statement of Ms. Reichert can be found in the Appendix on page 52.] 

Mrs. HARTZLER. Thank you, Ms. Reichert. 

Mr. Sullivan. 
8 

STATEMENT OF HON. SEAN SULLIVAN, CHAIRMAN, NUCLEAR 

DEFENSE FACILITIES SAFETY BOARD 

Mr. SULLIVAN. Chairwoman Hartzler and distinguished members 

of this committee and subcommittee, it is an honor to be before you 

today as chairman of the Defense Nuclear Facilities Safety Board 

to share my observations on the challenges and actions associated 

with the aging infrastructure within the Department of Energy’s 

defense nuclear facilities complex. 

I have submitted a written statement, and respectfully request 

that it be included in the record. 

Mrs. HARTZLER. So ordered. 

Mr. SULLIVAN. The Board is responsible by statute for the independent oversight of all programs and activities impacting the adequate protection of the public health and safety within DOE’s [Department of Energy’s] defense nuclear facilities. The Board is statutorily mandated to review the content and implementation of the 

DOE’s standards, facilities and systems design, and events and 

practices at DOE defense nuclear facilities. 

As my fellow panelists have shared, many NNSA facilities are 

very old. Aging defense nuclear facilities present several potential 

safety problems that must be simultaneously managed. Systems 

degrade with time. The risks associated with radiological holdup 

within a facility increase with time. Waste streams with no defined 

disposition path may accumulate with time. Replacement parts for 

critical systems become unavailable as manufacturers go out of 

business or the technology becomes obsolete. And new or evolving 

missions require existing facilities to be used in ways for which 

they were not initially designed. 

To mitigate these issues, NNSA prioritizes maintenance at highrisk defense nuclear facilities, and within each facility NNSA prioritizes maintenance on safety class and safety-significant equipment 

and components. Nevertheless, many of these defense nuclear facilities are past or are approaching the end of their design life. 

Additionally, nondefense nuclear facilities, that is, NNSA facilities that do not contain special nuclear material, generally do have 

significant maintenance backlogs, and an accident, such as a major 

fire in one of those facilities, could pose a risk to nearby defense 

nuclear facilities. 

Many NNSA sites also have significant aging issues with critical 

site infrastructure, such as in-ground water pipes and overhead 

electrical transmission lines. Finally, aging infrastructure has a 

hard-to-quantify, but no less real, negative impact on human capital. 

For the Board in its role as an independent executive branch 

agency advising the Secretary of Energy on nuclear safety, the 

sheer number of issues posed by aging infrastructure is cause for 

concern. To the extent that a specific failure at a specific place can 

be anticipated, NNSA has demonstrated that appropriate action 

will be taken, but the risk of a significant unanticipated failure 

continues to increase with time. 

The written testimony I have submitted to this subcommittee 

contains several detailed examples of potential safety problems 

caused by aging infrastructure as well as some positive observations on existing NNSA programs to manage these safety risks. 
9 

I look forward to answering any questions you may have. Thank 

you. 

[The prepared statement of Mr. Sullivan can be found in the Appendix on page 60.] 

Mrs. HARTZLER. Thank you very much, Mr. Sullivan. 

Dr. McMillan, I wanted to start with you with a few questions. 

You shared about reference to my opening remarks about the GPP 

and said that you thought, visiting with colleagues, it should be 

raised to $30 million, would give you more flexibility. Can you clarify that? Because I understand it was $5 million for the abovethreshold reprogramming, and then general plant and projects, a 

limit of $10 million. So which one are you saying should be $30 

million raised? 

Dr. MCMILLAN. It is the general plant projects. 

Mrs. HARTZLER. Okay. 

Dr. MCMILLAN. And, Chairwoman, the logic there is as follows. 

Particularly in California, since the last time the GPP limit was 

raised, we have seen substantial increases in construction costs. It 

is true across the country, but both my colleagues at Lawrence 

Livermore and Sandia have facilities in California where that has 

been particularly steep. 

In addition, as we look at issues like efficiency for the buildings, 

being able to build somewhat larger buildings allows us to have 

greater energy efficiency, better space efficiency in terms of how 

much is occupied by hallways rather than offices and labs. 

So having a higher limit allows us to more efficiently use that 

money. 

Mrs. HARTZLER. Great. And do you have any recommendation for 

the funding reallocation limits related to the interagency abovethreshold reprograms, which is now $5 million? 

Dr. MCMILLAN. I don’t have specifics, but I would like to defer 

to my NNSA colleagues on that, because they tend to be the ones 

who have to deal with those issues. 

Mrs. HARTZLER. Sure. 

Administrator Klotz. 

General KLOTZ. Sure. Thank you very much for the question. 

Let me say, I have made it a point, as I have gone out to visit 

our laboratories and other sites, to see some of the GPP projects 

that are out there. In fact, on one of my last visits to Los Alamos, 

Dr. McMillan took me over to view a facility that they had just recently completed. And I must say, I was very impressed, one, with 

the quality of the work that was done, and secondly, its impact on 

the morale of the employees that work in that particular facility. 

We hire the absolute best and brightest to be our laboratory and 

plant directors and the key personnel in each of those facilities. I 

am certainly willing, as the Administrator, to give them more discretion and more leeway in terms of the decisions that they would 

make in terms of what they would do for general purpose projects. 

We have a healthy discussion between us and all of our sites as 

they contemplate these kinds of projects to decide what is the best 

way to get at it. One shoe does not fit all. And I think what we 

really need are a lot of different shoes or tools, to mix a metaphor, 

in our toolkit to deal with some of the infrastructure issues that 

we have, ranging from line item capital construction projects of a 
10 

more traditional nature, to any number of different types of thirdparty financing schemes, to things like the GPP, as a way of getting at this issue. 

So from the NNSA perspective, we are very supportive of what 

the laboratory directors and plant directors have told us repeatedly 

that would help them help us in terms of maintaining those sites. 

Mrs. HARTZLER. Do you have a dollar amount that you would recommend, though, for the increase on the first, the interagency 

above-threshold reprogramming account? 

Mr. MCCONNELL. I believe that the $10 million threshold, exactly 

as Dr. McMillan said, has come to be a problem where projects 

of—— 

Mrs. HARTZLER. Okay. Well—— 

Mr. MCCONNELL [continuing]. Equal complexity this year—— 

Mrs. HARTZLER. Maybe there is a—— 

Mr. MCCONNELL. Is this the minor—— 

Dr. MCMILLAN. This is the $5 million—— 

Mr. MCCONNELL. Oh. 

Mrs. HARTZLER. Yes. So there are two different funds, one has 

a $5 million threshold, one has 10. I think we have fully explored 

that the $10 million should be raised to $30 million, but my question is about the $5 million—— 

Mr. MCCONNELL. Oh, reprogramming. 

Mrs. HARTZLER [continuing]. Should it be increased, and if so, 

how much? 

Mr. MCCONNELL. Can I add one other element to that first, because one other issue is the structure of the budget, because if you 

have—if you raise the budget thresholds for, for example—I will 

get into a couple of details here—to combine previous control 

points, then there is the ability to move money within the account 

as necessary to address issues without requiring any reprogramming at all. 

In the last couple of years, the Congress and your committee 

have helped us to restructure our budget such that we have three 

major infrastructure and operations control points that allow us to 

then do maintenance as a single entity across the enterprise, do recapitalization as a single budget line across the enterprise, and 

therefore inherent in that is the flexibility to move money between 

one lab that is having a problem and another lab that for some reason doesn’t. 

This year in particular, the Congress has looked at combining 

our operations at facilities control points, which are currently eight 

specific unique control points, one for each plant or site, into a single amount, that would allow the flexibility to move those operating 

dollars to wherever the needs are within our enterprise. 

So without perhaps deferring to the Administrator on a level for 

reprogramming, I would recommend that that current idea to combine the ops at facilities control points into one more flexible element would be an element that could help us solve this problem. 

Mrs. HARTZLER. Flexibility sounds good if you are able to combine. 

Before we move on, anything you want to say, Administrator? 

General KLOTZ. That is exactly what I was going to say, Congresswoman. Flexibility is good. 
11 

Mrs. HARTZLER. Yeah. 

Dr. MCMILLAN. If I could maybe add, based on the comments 

that my head of operations has provided since my earlier statement, he suggests that if we were to go to $10 million, it would 

give us quite a bit more flexibility, as General Klotz—— 

Mrs. HARTZLER. Ten million on that first account, $30 million on 

it. 

Dr. MCMILLAN. Correct. 

Mrs. HARTZLER. Okay. Thank you. 

And if we did raise those limits, how would you foster the relationship with oversight committees in Congress to ensure that we 

are still gaining the necessary insight into various projects so that 

we can conduct proper oversight of NNSA’s spending of our taxpayer dollars? 

Dr. MCMILLAN. I am happy to start with that, Chairwoman. 

One of the things that we do and I think we could certainly continue to do to ensure that oversight is provide reports both on the 

projects that we are doing as well as our progress on those projects. 

I am perfectly comfortable with the idea of transparency as a mechanism for oversight. 

What gives us difficulty is if there is a very elaborate decisionmaking process that goes with these, I call them medium-scale 

projects. So transparency is something we can very easily provide 

that I think can help your committee with that kind of insight. 

Mrs. HARTZLER. Okay. So this is a recommendation to change it. 

The policy—are there any other statutes, regulations, or policies 

that would impede immediate implementation of the projects that 

you would consider shovel ready for immediate implementation? 

Dr. MCMILLAN. Yes. 

Mrs. HARTZLER. What are some of those things? 

Dr. MCMILLAN. An example of a practice or policy, I am not quite 

sure where it fits, is the requirement that we destroy and decommission a building in the same year that we build the new building. It makes perfect sense to me that we should take down old facilities and be held accountable for that. The logic is when we take 

down an old building, we get rid of the maintenance costs associated with that, and that can then go into a new building. 

However, we would very much like to be able to bank that space 

when we—take it down as soon as we can, as soon as we can afford 

it. And then we may not be able to afford to put up new space in 

that year, but a year or two later draw from that bank of space so 

that we can then—so that would help us a lot. 

Mrs. HARTZLER. Okay. Ms. Reichert, do you have—— 

Ms. REICHERT. I think from our plant’s perspective, as well as allowing funding for us to take down the facilities, not processrelated facilities that aren’t contaminated, allowing some budget 

flexibility to do that, because we are investing a lot of money right 

now in facilities we no longer need. And the more efficient we become at the sites, the more we can invest in the critical infrastructure that we are maintaining for the long term. 

We don’t do much of that now, but we have in the past, and I 

think that would help all of us, both the labs and the plants, to 

have that flexibility within the budget to bring more of those 
12 

projects to fruition. And we do seek to do that in the out-years to 

make us more efficient. 

Mrs. HARTZLER. Great. 

Any other change in policies that you would recommend, Administrator Klotz or—— 

General KLOTZ. Well, one that we have talked to other members 

of the committee about in the past is clearly more flexibility in how 

we use third-party financing related to doing construction. You 

have already mentioned, and, of course, we have pictures, I think 

on page 6 is the Kansas City National Security Campus that you 

spoke about. That was built, as you mentioned, through a GSA 

[General Services Administration] lease with a third-party developer. 

We are also—again, great support from the committee—we are 

also in the process of building a facility at Amarillo, in fact, that 

is on page 9 of the slides which we provided, an Administrative 

Support Complex which will allow roughly a third of the Pantex 

workforce to get out of 1950s-era buildings into a modern, efficient 

building to do their work. That also is third-party financed. GSA 

was not part of that. This was a straight contract between Michelle 

Reichert’s people, who have responsibility for operating and managing Pantex and Y–12 for us, and a private developer. 

[The slides referred to are retained in committee files and can be 

viewed upon request.] 

General KLOTZ. I approved the mission need for this particular 

site in early 2015, and Michelle and her people are going to occupy 

it in early 2018. That is 3 years. That is a lot faster, much, much 

faster than we would have been able to do if it had been a line item 

construction project in which we would have had to come over probably a series of a couple legislative sessions in order to request the 

funding for it. 

So I think that is another area where more flexibility for us is 

something that we have certainly advocated and would continue to 

advocate. 

Mrs. HARTZLER. It sounds like you have already got that flexibility, though, because you have been able to complete these two 

projects. 

General KLOTZ. There are two, but there are other projects we 

would have done. And I will probably get in a lot of trouble with 

my executive branch colleagues, but I will tell you, it was exceedingly challenging work over a period of about 16 months in order 

to secure the approval—to secure authority to give approval to the 

M&O [management and operating] contractor to go ahead and 

enter into this lease. So some streamlining there would be very, 

very helpful. 

And there are other projects which we would like to do, which, 

quite frankly, don’t meet the scoring requirements, not just for the 

Office of Management and Budget, but also for the Congressional 

Budget Office. So there is where I think we need more flexibility. 

Ms. REICHERT. I think lease scoring changes is a big impediment 

to a lot of the projects that are being looked at right now, and a 

firmer policy on alternative financing as being a viable approach. 

As General Klotz mentioned, it wasn’t worth—wasn’t without con-
13 

siderable effort over a long period of time to make the Administrative Support Complex a reality. 

Dr. MCMILLAN. And if I could also support General Klotz in the 

statement about difficulty. My colleagues at Livermore and Sandia 

have projects that they have been working on for years in the 

third-party finance domain without success. It is a process that, 

while we have successes, and I applaud those successes, it is sort 

of beyond difficult right now. 

The other addition, and Michelle mentioned it, is effective use of 

lease space, lease scoring. While we certainly don’t want all of our 

facilities to be leased facilities, there are times when that can be 

a very cost-effective way to either buffer changes in facilities, deal 

with peak loads, those kinds of things. And, again, if we had policies that made that easier for us to use in a responsible way, it 

would be very valuable. 

Mrs. HARTZLER. I want to make sure my colleagues have a 

chance to ask their questions, so I will come back with some others. 

But would it be possible for each of you to put in writing to us suggested changes in policy that would be helpful to expedite these 

projects? 

Dr. MCMILLAN. These were included—— 

Mrs. HARTZLER. We have been taking notes here, but, you know, 

this would be something that we could actually move forward with 

legislation, and be helpful to have it in writing. 

Dr. MCMILLAN. All of these are in my written testimony. 

Mrs. HARTZLER. Okay. 

Ms. REICHERT. Mine as well. 

Mrs. HARTZLER. Okay. Very good. We will glean those out. Thank 

you very much. 

Mr. Scott. 

Sure. Mr. Suozzi. Sorry. 

Mr. SUOZZI. Suozzi. 

Mrs. HARTZLER. Suozzi. 

Mr. SUOZZI. Good afternoon. My name is Tom Suozzi. I am a 

freshman Congressman. This is all brand-new to me, this topic. I 

want to first say that it is obvious that you do very, very important 

work, and probably don’t get very much attention, considering how 

important it is, and I recognize what a challenge it has been for 

you. 

My former public service career was as mayor of my home town 

and county executive of a large county. I had a $2.8 billion budget, 

larger than 16 States. And my county grew rapidly from the 1940s 

through the 1960s to today. We went from 400,000 people in 1947 

when Levittown was built to 1.2 million people in 1960, and it was 

the same type of growth that you probably saw in your operation 

during World War II and afterwards. 

And when I look at these pictures, it is the exact same thing that 

I came into in my government, which is you had this sprawling enterprise that was pieced together over a period of time, and it kind 

of was just—you know, if you started from scratch, you would have 

never built all these different sprawling facilities. And nobody paid 

attention, and now all the buildings are falling apart. And you are 

scientists working on nuclear stuff, and you are not really probably 

as expert or as focused on maintenance and things like that. 
14 

So there are a couple different things that I would like to understand. And it is not going to happen today, but I would love to see 

some sort of report if it is done in some sort of comprehensive way. 

There are four different ways that I think that you should be 

looking at, which it sounds like from your testimony that you are 

already doing this already. But number one is consolidation. What 

are you doing to take your eight major facilities, and I am sure 

there are lots of other facilities, what are you doing to reduce it? 

Are you reducing it to six? Are you reducing it to five? What are 

you doing to consolidate your operations? I don’t expect you to answer this all now. 

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

page 91.] 

Mr. SUOZZI. But consolidation is probably one of the great things 

you can do, and maybe even sell your surplus property or give it 

away just to get rid of it or give it to some other government agency. And so that is number one, is consolidation and sale of surplus, 

elimination of surplus. 

Number two is, you know, in the earlier statement from Congressman O’Halleran, which he is taking the place of the ranking 

member today, he talked about how the Navy does a good job with 

their maintenance, and you guys are—you know, they have old facilities, but you guys don’t do as well. But they are big and you are, 

by comparison, small. You are not small, but by comparison you 

are small to them. And they have got, you know, a lot more depth 

and lot more funding and stuff like that. 

Is there some way that you could collaborate with another Federal agency that maybe is good at doing these type of things, that 

they could help you to do some of this day-to-day stuff and figuring 

out some of this capital planning? Because you have got all your 

resources dedicated to the science and to nuclear issues, and maybe 

there is somebody else that has a much larger operations and 

maintenance and capital building background than you, that you 

could get the big guys to help the little guys and help you figure 

out how to do this stuff instead of you trying to recreate the wheel. 

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

page 91.] 

Mr. SUOZZI. It is like hospitals today. Hospitals can’t survive by 

themselves because they have got too many areas of expertise, so 

they create these big networks, and instead of everybody trying to 

be expert at everything, you get one group is an expert at payroll, 

and this guy is an expert at cancer, this one is an expert at oncol— 

chiro—you know what I mean. 

So one is consolidation, two is can you collaborate with other 

agencies. 

Three is I am very interested in public-private partnerships 

[PPPs], and it seems like you are interested in that as well. And 

it would be great if, as part of a report, you would talk about your 

long-term vision for consolidation, collaboration, and public-private 

partnerships. What would be the projects you would want to focus 

on getting this private money in for, so that we could—I see these 

guys nod their head talking about how we should be doing more 

PPPs over here. You know, give us examples of it so we could help 

fight for you. 
15 

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

page 91.] 

Mr. SUOZZI. And number four is, are there any other reforms, 

other than these numbers of $10 million and $30 million increases? 

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

page 92.] 

Mr. SUOZZI. But I think the best thing would be if your agency 

as a whole had a comprehensive plan, which maybe you have and 

I just haven’t seen something like that, a comprehensive plan, this 

is our plan for the next 10 years as to how we are going to shrink 

our footprint, take care of it better in the future, collaborate with 

other people, save some money, and do things more efficiently. 

So I know I went a little bit all over the place, but go ahead. 

General KLOTZ. Can I dive just a little bit into that? And I really 

would welcome the opportunity to follow up over a series of visits 

and meetings to delve into this, because you raise extraordinarily 

important points. 

On the point of consolidation, the overall nuclear security enterprise has contracted significantly since the end of the Cold War. 

We shut down Rocky Flats, where we made plutonium pits; we 

have closed Pinellas, where we made neutron generators; we used 

to do uranium enrichment at Paducah, Kentucky, and in Portsmouth, Ohio, and all that—— 

Mr. SUOZZI. Are these surplus, or the government still holds onto 

them and they are contaminated? 

General KLOTZ. It depends on the specific site. Some, for instance, I believe Pinellas has been turned over to a local development authority, others are contaminated and we are still—we, I 

say we, the larger Department of Energy is involved in the decontamination process associated with that. 

On the Naval Reactors, there is one point I think we should 

make, and that is Naval Reactors is a part of the NNSA wearing 

one hat; the other hat takes them back to the Navy. It is true that 

they have done an extraordinarily good job in terms of maintaining 

their facilities and building new facilities. I think they would also 

tell you that they are behind. You know, if you go back and poke 

around in the back of their facilities, there are a lot of issues there 

as well. 

Mr. SUOZZI. Similar to yours? 

General KLOTZ. Similar to us. And, in fact, we fund their recapitalization and their maintenance, so we are very aware of the 

issues they have and are very, very supportive of fixing the laboratories. In fact, the facilities where they operate are DOE-owned facilities. 

Public-private partnership we have already talked about, but I 

am glad you raised working with other government agencies. We 

rely a lot on the U.S. Army Corps of Engineers in many of our 

projects, and they have been extraordinarily helpful in terms of design and in some cases actually being the build agent that would 

go out. They are very, very good on, you know, sort of general purposes, light laboratory, light industry types of work, and they even 

helped us out on some very specialized facilities associated with 

nuclear operations, which is not really their primary business. 
16 

So we are trying a lot of these as we are working to improve the 

way in which we do work. And as I said at the outset, I would be 

delighted to spend more time with you on that. 

Mr. SUOZZI. Thank you so much. 

Dr. MCMILLAN. Congressman. 

Mr. SUOZZI. Yes. 

Dr. MCMILLAN. If I could just add to what General Klotz said in 

a couple of regards. You ask are facilities being turned over. Rocky 

Flats Plant is an excellent example outside of Denver. It is now 

parkland. Okay. 

So the consolidation for our enterprise really occurred during the 

1990s at the end of the Cold War. So we have done that. 

Something I would add is, you asked about whether we had 

plans. Something that Mr. McConnell has been leading is something that we call the Management Asset Plan, MAP. All of the 

sites are providing input into that. He has been doing reviews at 

all of the sites. And what we traditionally had as our 10-year site 

plans are now being rolled up to the whole NNSA level. So those 

plans are being built, they exist, and I think it is well worth taking 

a good look at that. 

Ms. REICHERT. One other area I want to emphasize on consolidation as well, not just consolidation across the enterprise, but within 

each of our sites. At our Y–12 complex, for instance, we reduced 

about a million square feet in the last decade, a little over the last 

decade. At Pantex, our new Administrative Support Complex will 

eliminate 52 facilities on our sites. 

So being able to use efficiencies as well as any additional funding 

to bring those buildings down, it not only brings our workforce together in a nice modern facility, but it makes them so much more 

efficient, because they are together, and they can collaborate and 

work together in facilities where they are collocated. So I think we 

are looking at a bigger complex issue of consolidation, but we are 

certainly looking at it within each of our sites as well. 

Mr. SUOZZI. I am certainly taking up too much time, but how 

many square feet do you have in your total enterprise? Do you 

know? 

Mr. MCCONNELL. So real property-wise, we have a little over 

2,000 square miles that NNSA is responsible for. As far as the actual gross square footage, I will get you the specific number, but 

it is equivalent to about six Pentagons. 

Dr. MCMILLAN. To give you a sense of scale, Los Alamos alone 

covers 35 to 40 square miles. 

Mr. SUOZZI. Well, thanks very much. 

Mrs. HARTZLER. Thank you. Good question. 

Mr. Scott. 

Mr. SCOTT. Thank you, Madam Chairman. 

And just for the record, on page 5 of your testimony, Ms.—is it 

‘‘Reichert’’ or ‘‘Rickert’’? 

Ms. REICHERT. It is Reichert. 

Mr. SCOTT. Reichert. 

Ms. REICHERT. It is Reichert. 

Mr. SCOTT. I have a mayor back home that spells it the same 

way. It is ‘‘Rickert’’ for him. That is why I asked. 
17 

But I had circled your testimony on page 5 about the publicprivate partnership. And you mentioned two different ways of 

doing things. One of them was a GSA lease and one of them, I 

think the general said you went direct. 

What are the primary differences in going through GSA and you 

going direct? 

Ms. REICHERT. The direct approach that we took was certainly 

supportive of the NNSA, was a local area economic development 

agency took on the project. So we approached both Amarillo and 

the Panhandle communities. Panhandle stepped forward. They put 

out a bond offering, and we got a very good bond rating for that. 

They put out a bond offering that will finance the facility, and then 

they hire directly a developer and a contractor to build the facility 

for which we lease. And that has worked very well for us just going 

direct. 

I don’t have a lot of detailed knowledge, you guys may have 

more, on the Kansas City approach going through GSA, but it 

worked very efficiently going direct with the local agency. 

Mr. SCOTT. Let me follow up on that, if I may, because that 

brings to mind one of the other questions that I had. So you said 

that you used a local development agency. So you did not use a private company, you used a local government entity? 

Ms. REICHERT. Panhandle Area Economic Development Corporation that actually bond issued and then hired the developer and the 

contractor that built our facility. 

Mr. SCOTT. And they own the facility, and your lease is then with 

that economic development authority? 

Ms. REICHERT. Yes. 

Mr. SCOTT. Okay. One of my concerns was with facilities of this 

magnitude, of this importance to our country, that we end up 30 

years from now, whenever the lease ends, subject to whatever the 

person who owns the property. 

Ms. REICHERT. We have got very specific lease agreements in 

place as far as what they provide for us. At the end of 30 years, 

if you saw our Amarillo complex, we are a bit out of the way, so 

I can’t imagine that there is going to be a huge demand for the facilities. We are about 25 miles from town, and there is not much 

out there with us. But we have got very specific language in there 

that we can continue our leases in order to support the Nation and 

our plant. 

Mr. SCOTT. I assume at a set rate? 

Ms. REICHERT. Yes, sir. 

Mr. SCOTT. Be careful of the change orders. 

Ms. REICHERT. It is a firm fixed price turnkey project, so it is 

capped. 

Mr. SCOTT. Fair enough. So the third-party financing in this case 

comes through a local development authority, which I think is 

probably the better way to do it. 

General, going through GSA versus going direct, what are the 

advantages of each one and disadvantages? 

General KLOTZ. Let me put it in—as I understand it. First of all, 

in working with the GSA, the GSA then has to make a business 

decision in terms of whether or not they want to acquire a particular—build a building or acquire a particular piece of real estate. 
18 

And in the case, as Ms. Reichert alluded to, in the case of Kansas 

City, that was an easy business decision for them to make, because 

it is a very active metropolitan area. If for some reason the government ever left that particular facility, there are other government 

agencies that could move in there or there is a market for it on the 

commercial side. 

That is not quite the same case in the area outside of Amarillo, 

Texas, and I am from that part of the country. And Michelle is 

right, they are a long way away. So we approach—on all of these 

things, we do what is called—on all our major capital construction 

projects, we do a very rigorous analysis of alternatives. That is a 

new process we brought in about 3 years ago. 

Mr. SCOTT. In that analysis, do you include the maintenance of 

the facility? 

General KLOTZ. Yes, sir. 

Mr. SCOTT. Is that included in the lease? 

General KLOTZ. Yes. 

Ms. REICHERT. Yes, sir. 

General KLOTZ. And all of our analyses of alternatives, they will 

run the range from do nothing, in other words maintain the status 

quo, fix the status quo a little bit, build a new building, approach 

the GSA, do private development, or go for a line item construction 

project. So we generally consider the whole gamut. And we are not 

necessarily restricted to a particular location in terms of doing 

that. 

Mr. SCOTT. My time has expired. 

Mr. MCCONNELL. And one item is we do a full lifecycle analysis 

all the way through the D&D [design and development] of the facility to compare apples to apples. 

Mr. SCOTT. And on average, is that 20 years, 30 years? 

Mr. MCCONNELL. Forty years. 

Mr. SCOTT. Forty years. 

Thank you very much. 

Mrs. HARTZLER. Thank you. 

Mr. Rogers, Chairman Rogers. 

Mr. ROGERS. I thank the chairman. 

Ms. Reichert, as you know, I have been through Pantex and Y– 

12, and you are right, the great Americans that work at those two 

places are real patriots for doing that. They have options. These 

are not people that need that job. And they are patriots, and I appreciate their service to their country. 

General Klotz, we have talked about this before. I know you and 

I share the same goal, and that is to ensure the nuclear enterprise 

and its people are ready to be able to meet the challenges in the 

future. A big part of that is a mutual understanding that we simply must recapitalize NNSA’s facilities. You have said to this committee several times, quote, ‘‘I think of no greater threat to the nuclear enterprise, security enterprise, than the state of the NNSA’s 

infrastructure,’’ close quote. And you know I agree with that. That 

is why this hearing is so important. I thank Chairwoman Hartzler 

for calling it. 

Chairwoman Hartzler and I sent a letter, which I will introduce 

for the record, without objection—— 

Mrs. HARTZLER. Without objection. 
19 

[The letter referred to can be found in the Appendix on page 69.] 

Mr. ROGERS [continuing]. To Secretary Perry last week that 

asked the Secretary personally to engage to ensure you bring to 

this committee hearing a list of infrastructure projects that NNSA 

could be carried out in the intermediate range if funding was provided. This follows up on a request this committee made to DOE 

back in January. 

I understand that you are not able to provide that today. Is that 

correct? 

General KLOTZ. That is correct. 

Mr. ROGERS. That is disappointing. Please ensure that Secretary 

Perry and the OMB [Office of Management and Budget] understand that we are asking for a simple data call here, not a peek 

at predecisional budget plans. For example, you sent a letter to us 

with a similar list last year in response to a QFR [question for the 

record] from a September hearing. 

I would like to introduce that for the record, if I could. 

Mrs. HARTZLER. So ordered. 

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

page 84.] 

Mr. ROGERS. It lists projects that you say are, quote, ‘‘currently 

underfunded recapitalization projects that NNSA could execute in 

the next several years should additional resources be available. The 

list provided is unconstrained and builds from the project list included in the fiscal year 2017 budget request,’’ close quote. 

Chairwoman Hartzler and I are simply asking for a comprehensive update to that list with a bit more detail. You and I both know 

that there are plenty of projects that meet this criteria of, quote, 

‘‘shovel ready,’’ and are not on the list that you gave us in September. 

So I build to this: Can you get us that list in the next 30 days? 

General KLOTZ. I can’t promise that, Chairman, because you 

know what time we are in. We are in budget preparation time. As 

everyone here well knows, the Office of Management and Budget 

released its blueprint for the President’s fiscal year 2018 budget 

today, and I am happy to say that blueprint demonstrates the administration’s strong support for the United States nuclear security 

enterprise and will help ensure that we have a nuclear force that 

is second to none. 

The details of—well, I mean, the numbers are pretty—are laid out in there, a $1.4 billion increase for NNSA over the fiscal year 

2016 enacted level, which was $12.5 billion, so that is about an 11 

percent increase to that. And, of course, obviously much of that will 

be going towards all the line items within our budget, in addition 

to the life extension programs, recapitalization, and maintenance 

as well. 

Mr. ROGERS. How much toward deferred maintenance? 

General KLOTZ. I don’t have the—and I can’t release that until 

the President’s budget comes—— 

Mr. ROGERS. It was worth a try. 

General KLOTZ. Yes, sir. So believe me, we are on the same sheet 

of music, we have the same goal at the end. And we continue to 

update this list. We were using our—since the last time we have 

discussed this with your subcommittee, you know, we continue to 
20 

refine our tools, Jim, and work with the labs and the plants to 

make sure we have the list prioritized in a way that we can. 

But right now, as we are in the process of defining what the actual outlines of the President’s budget are, we do not want to get 

ahead of the budget request that he will send up to the Congress 

in the May timeframe. 

Mr. ROGERS. Okay. Well, I thank you again for your service. And 

you know this is something that is very important to me and to 

this committee, not only the subcommittee, but this full committee, 

and we want to stay after it and we want to be supportive. So I 

look forward to seeing that number. 

With that, I yield back, Madam Chairman. 

Mrs. HARTZLER. Yes. Thank you, Mr. Chairman. 

Dr. DesJarlais. 

Dr. DESJARLAIS. I thank the chair. 

Representing the great State of Tennessee, I thought I would 

take the opportunity to share the photo of the fallen concrete incidents at Y–12 to let you help shed some light on the consequences 

and the magnitude of the problem that we are discussing today. 

Ms. Reichert, the picture here of Y–12, what operations were 

being conducted in that building prior to this happening? 

Ms. REICHERT. It is our lithium operations, which are essential 

to the mission that we support at Y–12. 

Dr. DESJARLAIS. Okay. If we were to lose operating capacity 

there, which did happen for a period of time, would you deem that 

a single point failure? 

Ms. REICHERT. It is one of the key areas of concern that we have 

for our capabilities, uranium being one, lithium being one as well, 

high explosives at Pantex being another. All of those are integral 

to the weapons program, so if we did lose the lithium capability, 

it would be significant to the weapons program and the deterrent 

overall. We are working with NNSA right now on a lithium strategy so we can ensure that we have those materials for the future 

for the weapons stockpile. 

Dr. DESJARLAIS. So when an operation like this has to shut 

down, there is a direct impact to national security? 

Ms. REICHERT. Yes, sir. 

Dr. DESJARLAIS. All right. 

You talked about rodents and snakes and now falling concrete. 

Does anybody want to just further stress the impact that this has 

on the mission of the NNSA and to our overall national security? 

Dr. MCMILLAN. I would, Congressman. 

Dr. DESJARLAIS. Thank you, Dr. McMillan. 

Dr. MCMILLAN. I think in Chairwoman Hartzler’s opening remarks she very accurately said that this affects the morale of the 

people that we hire. We work very hard to bring in some of the 

very best people in the world to our laboratories, and when they 

come from a university setting, let’s leave aside the Googles and 

the Apples, when they come from a university setting and then 

come to a national laboratory or one of our plants and they say, 

‘‘This isn’t as good as what our university was,’’ it really doesn’t 

say, ‘‘What you are doing is critical for the Nation.’’ 

That is the case. I have trailers that were brought onto Los Alamos 30 years ago as temporary structures. They are still there 30 
21 

years later. We are working to get rid of them, but we have to be 

able to move people into real space. There are experiments that we 

are doing right now with things like manufactured buildings. This 

year we want to bring a manufactured building onto our site as a 

way to keep the costs down but take the quality up. We think there 

is opportunity in places like that. 

But one of my biggest concerns after safety is the morale of the 

people and our ability to retain those people in the service of the 

Nation. 

Ms. REICHERT. I would like to expound on that just a little bit. 

Representative Rogers, you got to see one of my highlighted facilities on what we call our ugly tour. 

Mr. ROGERS. Yeah. There was a lot of ugly too. 

Ms. REICHERT. There was a lot of ugly that day, yes, sir. 

We bring in some of the best and brightest scientists from across 

the country, especially in our high explosive technology area, in 

World War II vintage facilities. Rodents certainly are in those facilities. We get rain intrusion into those facilities, such that we 

have got high-tech equipment that we have to cover with tarps, 

and the mold and mildew was starting to attack those facilities as 

well. We have literally had to move those scientists out to 30-yearold trailers, which were an improvement from their R&D [research 

and development] facility in which they live now, and then they 

just go back and forth to the facility to do their R&D work. 

I have had young engineers look at me and say, ‘‘Ma’am, I could 

work at a high rise in Dallas and have a company car, you know, 

I don’t need to be uncovering my equipment in order to work on 

it during the course of the day.’’ So they deserve better than that. 

General KLOTZ. Could I just add one thing? As I indicated, I 

think, in my verbal opening statement, we are doing an awful lot 

of very important work for the Air Force and the Navy now in 

terms of the life extension programs for the bombs and the warheads that will go on the new submarines, that will go on the new 

bomber, will go on the new fighter, will go on hopefully someday 

a new intercontinental ballistic missile. And it is a very, very tight 

schedule. The labs and the production facilities are ramping up 

people and have very tight deadlines to do their work. 

If we have to shut down operations for a day, a week, a month 

because of a corroding sprinkler system or a collapsed ceiling, as 

you rightly point out, or a whole host of other kinds of age-related 

issues—and we will always put safety first, we will always put 

safety first for both our employees and the general public—if we 

have to shut down for that, the margin we have to deliver what 

this Nation needs for its nuclear deterrent gets stressed that much 

more. 

So there really is, in addition to recruiting and retention and 

safety, there is a real, no kidding, potential operational impact to 

what we are doing. 

Dr. DESJARLAIS. I would like to thank the panel. 

Mr. SULLIVAN. Congressman, can I add something to that quickly? 

Dr. DESJARLAIS. Yes, sir. Mr. Sullivan. 

Mr. SULLIVAN. Your question about the impact, I want to just 

make the point that safety systems and design, building design has 
22 

come a long way in the last several decades. And so I would use 

the analogy, I had a friend who had a 1952 Packard, an old automobile, and he spent a lot of money on that automobile and he kept 

it running as well as it ran in 1952. But it was still a 1952 Packard, and it didn’t have modern safety features like seatbelts and 

antilock brakes. And we see the same things in these facilities as 

well. 

And really for the Nation, the question is, since we now have the 

technology that could significantly reduce risk, we should be considering trying to use that, because we still maintain a lot of risk 

even in well-maintained older facilities. 

Dr. DESJARLAIS. Yeah. Great illustration. Thank you. 

Mrs. HARTZLER. You bet. Thank you. 

Mr. Suozzi. 

Mr. SUOZZI. Madam Chairwoman, I would like unanimous consent to enter Ranking Member Moulton’s statement in its entirety 

into the record. 

Mrs. HARTZLER. So ordered. 

[The prepared statement of Mr. Moulton can be found in the Appendix on page 33.] 

Mr. SUOZZI. Thank you. 

Mrs. HARTZLER. I have a couple more questions here. 

Administrator Klotz, so in the fiscal year 2017 budget request, 

NNSA requested a one-time funding line of $200 million to pay for 

final disposition of the Bannister Road Federal Complex in Kansas 

City. This funding allows NNSA and the U.S. Government to turn 

the facility over to a contractor for remediation and disposition and 

is a good deal for everyone. 

Would you please tell us what happens if NNSA does not get this 

funding in fiscal year 2017? And when is the deadline that NNSA 

must have this funding appropriated by in order to proceed with 

the transfer and remediation project? And what happens if the energy and water appropriation gets a full-year continuing resolution 

and this one-time program does not get a $200 million anomaly? 

General KLOTZ. If you would permit me, Madam Chairwoman, 

let me start this, but actually Jim McConnell, who is sitting here 

to my left, is our lead senior executive who is working this for the 

NNSA as well as our team, Mark Holecek and team out in Kansas 

City. 

This is an extraordinarily good deal for the American taxpayer. 

As you indicated, we were operating out of a 3 million—we were 

using 3 million square feet of an even larger facility that was built 

in World War II. We have now moved out of that. We have made 

a commitment to the people of Kansas City and the State of Missouri and the State of Kansas that we would not leave that as an 

eyesore for years or decades to come. 

And as it turns out, there are commercial interests in that particular facility. And we can, for $200 million, which seems like a 

lot, we can turn that over to a commercial entity to do the demolition and remediation of the property for a sum that is roughly— 

is less than 25 percent of what we would have to do if we, the U.S. 

Government, if we, the Department of Energy, were having to remediate it. So big cost savings. 
23 

But all committees involved, the two authorizing committees on 

both sides of the Hill, the two appropriations subcommittees on 

both sides of the Hill, agreed that this was a good deal and gave 

us the full mark to be able to pay the private developer the money 

that is necessary to do that this year, which is when the deadline 

is. 

So without a fiscal year 2017 budget, or if capped at flat line in 

a continuing CR [continuing resolution] at the fiscal year 2016 levels, we will not have the money to consummate this deal, in a nutshell. 

Do you want to add anything to that? 

Mr. MCCONNELL. Just one of your questions was about timing, 

ma’am. The three main entities, the State of Missouri, the private 

corporation that we are engaged with, and the Department of Energy, are on track to work through the issues that need to be resolved prior to transfer. They are mostly involved with the Resource Conservation and Recovery Act, the RCRA, that underpins 

the environmental cleanup. That is on track with public hearings 

in Missouri in the not-too-distant future that would result in a 

transfer in August. 

In order to have an August transfer, there has to be the money 

available for this entity to certify that it has the ability to complete 

the environmental cleanup, and so that requires us to back up several months to have the money to reach an agreement with CenterPoint, who is the corporation going to do the cleanup. That means 

that it is April or May, right at about the time that this continuing 

resolution ends, is when we would actually need that $200 million. 

General KLOTZ. If I could just add one thing, Congresswoman. 

The Congress actually was very helpful in the passing of the continuing resolution by giving us an anomaly, which allowed us to 

move moneys around in the weapons activity account to cover bills, 

and without having to go to Congress beforehand. We did have to 

notify you within 15 days after doing that. 

We have exercised that authority, and we exercised that authority to provide some money for this particular effort in order to keep 

the deal alive, as it were, into the summer while the State of Missouri government and the contractor and our people continued to 

work through the issues that Mr. McConnell just talked about. But 

we were borrowing money from other accounts, other activities, 

that those bills are still going to come due, so they will have to be 

paid. 

So flexibility to move money around is not enough, because there 

is not enough money in the bank account to cover all that and do 

all the other things that we need to do in terms of our life extension programs, in terms of the salaries we have to pay, and other 

activities in that account. 

Mrs. HARTZLER. It is very, very important that we get this done. 

So I appreciate the summary of where you are at right now and 

then also emphasizing how important it is that we get this figured 

out in April and May, that we get a full budget. 

Administrator Klotz, as it relates to some of the NNSA’s large 

line item nuclear facility construction initiatives, how have the 

projects performed related to original planned costs scheduled and 

building specifications, and what mechanisms are in place within 
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NNSA to provide sufficient oversight of construction and adherence 

to budget and building requirements. 

General KLOTZ. Thank you very much. 

I think maybe one of the underlying premises of that question is 

that in recent times the DOE has had challenges in doing largescale nuclear-related construction projects, and that is fair. But 

over the past several years, we have made some significant 

changes in the way in which we manage both programs and projects to ensure that we have the most highly qualified people leading those projects. We have done a good job, I think, of bringing 

in practices that were used by the Army Corps of Engineers and 

by Naval Construction, in fact hired many of their best people into 

the NNSA, and have begun to make some significant—see some 

significant progress. 

The vast majority of our portfolio is delivered on time and on 

budget. We have a couple of—and, in fact, except for—you know, 

we are off the high risk category list the GAO [Government Accountability Office] has for all projects under $750 million. That 

leaves three major projects, MOX [mixed oxide fuel], the Uranium 

Processing Facility at Y–12, and our project to move out of the 

chemical metallurgy building at Los Alamos is still on the high risk 

list. 

As I think you know, and other members of the committee know, 

about 3 years ago we restructured our approach to how we are 

doing that, and I would be happy to go into details now or later, 

but since we have made those changes and changed our management structure for watching how we exercise oversight over that, 

both of those are on schedule and on budget. In fact, I have some 

pictures of the construction that is going on at the Uranium Processing Facility. We are still committed to delivering that facility for 

$6.5 billion by 2025. And I was just down there a couple weeks ago, 

and it is very impressive, the work that is being done. 

I don’t know if you wanted to add anything to that. 

Mrs. HARTZLER. Very good. 

Well, I really appreciate your coming today and certainly the important work that you do. 

Before we close the hearing, I will give each one of you a chance 

to make any closing remarks if you haven’t perhaps had a chance 

to make those points before. 

So, Administrator Klotz, do you have anything else you want to 

add? 

General KLOTZ. I would. There is a lot of talk, and we will be 

sending a report to the Congress soon on what we call having a responsive stockpile. To me, that involves a number of different factors. It involves having the right facilities to do the work, the right 

equipment to do the work, the right people, the talent, the intellectual capital that we need to do that work, and it requires the resources to pay for all three of those things. 

And I certainly appreciate the extraordinary support that we 

have received from this committee as well as other committees in 

the Congress for moving forward. As I indicated, there appears to 

be broad bipartisan support across the aisles and across both sides 

of Capitol Hill, and I would add, at both ends of Independence or 

Pennsylvania Avenue, on the importance of strategic deterrence for 
25 

the security of our Nation and that of our allies. So it is very, very 

important that we get this right, and we are going to need your 

support to do that. 

Mrs. HARTZLER. Thank you. It is our number one priority. That 

is right. 

Mr. McConnell. 

Mr. MCCONNELL. First, the question I didn’t answer before. 

NNSA operates about 36 million square feet of real property. 

Mrs. HARTZLER. Okay. 

Mr. MCCONNELL. The one point I would like to add, which the 

Administrator has already made, is we didn’t get into this situation 

overnight. This is the result of a fairly long period of slow deterioration in some of these key facilities. We have now gotten ourselves 

to the point where we have a significant infrastructure challenge, 

and we won’t be able to get out of it overnight. 

So we appreciate your continued support. And this is going to require a collaborative, continuous effort for many, many years at a 

fairly substantial funding level in order to be able to address the 

several—$2 billion—more than $2 billion worth of current infrastructure needs. 

Mrs. HARTZLER. Dr. McMillan. 

Dr. MCMILLAN. Chairwoman, I would like to quantify what my 

colleagues have said. The National Research Council has looked at 

sort of ratios of how much should be spent as a function of overall 

replacement value. The number they have come up with is of order 

4 percent of the replacement value. 

Let me just give you an idea of what that means. At Los Alamos, our replacement value is something like $14 billion, give or take a 

little bit. That would mean that we should be spending something 

on the order of $550 million a year in maintenance. We spend 

about $150 million. 

So when we talk about not only the integrated issues of the past, 

when we haven’t had the resources to do that, and how do we not 

get into this situation in the future, it is going to require substantial resources to do that. This is not a trivial amount of money. 

Ms. REICHERT. One thing that I want to reemphasize, like Dr. 

McMillan, I have been in this enterprise for 30-plus years and have 

dedicated my life to it. And often my family would say, ‘‘Why do 

you stick with it, especially if you describe the infrastructure as we 

have it?’’ And I say, ‘‘Because we do very important work.’’ And 

that is truly what our folks at both of our sites truly feel about 

their mission. 

But as the leaders of our company especially, we have imperatives, which are safety and security. Only when we are safeguarding our folks and the materials to which we have been entrusted 

can we truly deliver on our mission. 

We are very encouraged by the interest we are seeing from the 

committee, and many members have been to visit our sites and 

truly understand the issues that we face. We look forward to working with you on addressing these issues in our infrastructure. We 

have got plenty of very important work ahead of us. So we thank 

you for the opportunity. 

Mrs. HARTZLER. Thank you. 

Mr. Sullivan. 
26 

Mr. SULLIVAN. Thank you, Chairwoman. 

I served many years on U.S. Navy submarines, and a submarine 

is designed with a hull that will take a certain number of cycles 

of sea pressure as it submerges and comes back up. And when that 

predetermined designed life is reached, the ship is taken out of 

service, and there is very little that can be done to make it extend 

any further, because the risk is too great. 

We don’t have that in most NNSA facilities. I mean, the facilities 

were built many years ago. They had a designed life, you reached 

the designed life, and then for various reasons most of them are extended beyond the designed life. And I just wanted to reiterate that 

that brings a safety risk that I would encourage all of us who are 

in positions of responsibility for the United States Government to 

think about as to whether or not that risk is something that deserves priority, as the dollars, which are always scarce, are put to 

various needs. 

Thank you. 

Mrs. HARTZLER. Thank you. Very, very important. 

We appreciate everything that you do, and you really are patriots. We appreciate what that means to our country. So thank you 

for being here today. 

This hearing is now adjourned. 

[Whereupon, at 3:40 p.m., the subcommittee was adjourned.] 
A P P E N D I X 

MARCH 16, 2017 

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MARCH 16, 2017 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

THE HEARING 

MARCH 16, 2017 

(91) 

RESPONSES TO QUESTIONS SUBMITTED BY MR. SUOZZI 

General KLOTZ. Since the end of the Cold War, the nuclear security enterprise has 

contracted significantly, including eliminating unnecessary redundancies. For example, in 1994 the Department of Energy ceased operations at the Rocky Flats Plant 

in Colorado, where plutonium pits were produced. Similarly, operations at the 

Pinellas Plant in Florida, where neutron generators were produced, ceased in 1997. 

Operations were also ceased at the Mound Site in Ohio in 2003, where beryllium 

initiators were manufactured and used in early atomic weapons. More recently, 

NNSA moved operations of our Kansas City Plant from the aging Bannister Federal 

Complex to the modern, efficient Kansas City National Security Campus (KCNSC), 

reducing the KCNSC footprint from 1.5 million gross square feet to 2.9 million gross 

square feet. 

Although the current enterprise is extensive and complex, each NNSA site fills 

a unique role and responsibility. Therefore, further consolidation of NNSA sites is 

not anticipated at this time. However, NNSA is making investments to improve the 

efficiency and responsiveness of our infrastructure. For example, NNSA is recapitalizing the facilities that support strategic materials capabilities with projects such as 

the Chemistry and Metallurgy Research Replacement project at Los Alamos National Laboratory (LANL) and the Uranium Processing Facility at the Y–12 National Security Complex. Both projects will move operations from degraded facilities 

into newer buildings, increasing the responsiveness of the enterprise. 

Additionally, current and future support to readiness and responsiveness is provided through investment in vital general purpose infrastructure projects, such as 

the TA–3 Substation Replacement project at LANL. This project, which began in FY 

2016, will replace a dilapidated and increasingly unreliable system with a modern, 

reliable, and robust system that is easier and more cost effective to maintain and 

operate. The new substation will reduce deferred and emergency maintenance, improve safety, and upgrade and increase power import capacity to support new programs. [See page 14.] 

General KLOTZ. NNSA collaborates with other Federal agencies to implement 

proven systems and tools to improve NNSA’s infrastructure. During the past several 

years, for example, NNSA has been collaborating with the U.S. Army Corps of Engineers (USACE) to implement the BUILDER Sustainment Management System, 

which has been recognized by the National Academy of Sciences as a best-in-class 

practice for infrastructure management. BUILDER is a web-based software tool to 

help decide when, where, and how to best maintain, repair, and recapitalize infrastructure. The tool uses preexisting engineering data to predict facility and component conditions, prioritize maintenance work, and support analysis of different 

spending scenarios. NNSA’s full implementation and sustainment of BUILDER is 

planned to be achieved in 2018. 

Additionally, NNSA developed a new customized Mission Dependency Index 

(MDI) based on models used by the Marine Corps, Coast Guard, and Navy. NNSA’s 

new MDI measures the ‘‘consequence to mission’’ by combining the impact to mission if an asset were lost, the difficulty to replace the asset, and the interdependency of assets to calculate a score from one to 100. As a result, MDI provides much 

greater insights into prioritization of risks, opportunities, and investment decisions 

than prior analytical tools. [See page 14.] 

General KLOTZ. NNSA always selects between leveraging public-private partnership financing or line item construction based on what is in the best interest of the 

government. NNSA uses OMB Circular A–11 and A–94 standards as guidance for 

such assessments, and when appropriate consults with the General Services Administration (GSA). As part of our improved project management initiatives, NNSA implements a comprehensive Analysis of Alternatives process to help inform many of 

these decisions. 

For example, NNSA recently selected a third-party financing solution to construct 

the Pantex Administrative Support Complex in Amarillo, Texas, based on an assessment that such an approach would be in the government’s best interest. In contrast, 

NNSA determined that line item construction was in the government’s best interest 
92 

for the new Albuquerque Complex, the Federal administrative building in Albuquerque, New Mexico. [See page 15.] 

General KLOTZ. NNSA continues to study ways to improve the efficiency and effectiveness of our operations. We will be working to vet proposals within the new 

Administration to decide what specific steps would be most helpful going forward.

[See page 15.] 
QUESTIONS SUBMITTED BY MEMBERS POST HEARING 

MARCH 16, 2017 

(95) 

QUESTIONS SUBMITTED BY MRS. HARTZLER 

Mrs. HARTZLER. General Klotz, what are the consequences to the U.S. government 

and taxpayers if we do not close the deal on the Bannister Road Complex in Kansas 

City soon? What if we do not get this $200 million appropriated here in FY2017? 

General KLOTZ. NNSA requires $200 million in FY 2017 to transfer ownership of 

the Kansas City Bannister Federal Complex—a high-risk, excess facility formerly 

home to the Kansas City Plant—to a private developer for demolition, remediation, 

and redevelopment. If the FY 2017 transfer window is missed, the private developer 

may walk away from the project, preventing NNSA from transferring the property. 

In the event the transfer is missed, NNSA will be required to carry the Bannister 

Federal Complex until disposition, which is estimated to cost between $8 million– 

$10 million per year. Additionally, NNSA may need to invest in improvements to 

keep the facility in stable condition until eventual disposition. The extent of these 

facility stabilization investments will vary significantly depending on the long-term 

disposition plan (e.g., disposition in several years versus 10 years or more). Additionally, the full extent of future funding requirements cannot be estimated due to 

unforeseeable emergent failures, such as a recent water main break in February 

2017. Ultimately, if the Federal Government is required to complete the demolition 

and remediation, the cost is expected to be approximately $900 million. 

Mrs. HARTZLER. General Klotz, you’ve said several times to this committee and 

the public: ‘‘I can think of no greater threat to the nuclear security enterprise than 

the state of NNSA’s infrastructure.’’ This is a tremendously important statement 

and one that Congress and the American people need to internalize. Would you 

please elaborate on why you say this? And what you believe must be done? 

General KLOTZ. Infrastructure plays a vital, cross-cutting role in enabling NNSA’s 

multiple national security missions, from ensuring the reliability of the U.S. nuclear 

deterrent to reducing the threat of nuclear proliferation and nuclear terrorism. 

Much of our infrastructure dates to the Eisenhower Administration, and in some 

cases the Manhattan Project era. Failure to revitalize this antiquated infrastructure 

presents significant risks to our ability to deliver missions effectively and efficiently, 

expand our capabilities and production capacity, and attract and retain new employees. Furthermore, without adequate investments, NNSA’s infrastructure can pose 

safety risks to our workers, the public, and the environment. The breadth of these 

impacts informs my assessment that there is no greater risk to NNSA’s missions 

than the current state of our infrastructure. Yet, although it has presented significant challenges, NNSA infrastructure has successfully enabled execution of the mission to date, and we are taking steps to address known challenges. 

The establishment of the Office of Safety, Infrastructure, and Operations in January 2015 was the first action of many to improving the state of NNSA’s infrastructure. This new organization enables NNSA to focus on identifying infrastructure 

gaps and risk, responding to emergent needs as they arise, and improving NNSA 

infrastructure over the long term. Within the Office of Safety, Infrastructure, and 

Operations, NNSA has two programs that target investments to improve the condition of infrastructure and reduce programmatic and safety risk: 

• Maintenance and Repair of Facilities; and 

• Recapitalization: Infrastructure and Safety. 

NNSA began requesting and receiving additional funding for maintenance and recapitalization activities starting in FY 2015. Sustained, predictable, and increased 

investments in these two programs along with strategic investments for new construction are needed to improve the condition of NNSA’s infrastructure. 

Additionally, the Office of Defense Programs also employs a smaller recapitalization program, Capability Based Investments (CBI), focusing on managing risks in 

existing capabilities by prioritizing investments to upgrade and improve the reliability, efficiency, and capability of programmatic equipment and associated infrastructure. 

Mrs. HARTZLER. One of the many unique elements necessary for the proper maintenance and operation of the nuclear stockpile is beryllium. This strategic and critical material, along with its cousin, beryllium oxide, cannot be replaced without significant risk to our nuclear deterrent. Is NNSA, and especially Los Alamos National 
96 

Laboratory, exploring ways to ensure that its requirements for beryllium and beryllium oxide will be met in a cost-effective and efficient manner in the coming decades? 

Dr. MCMILLAN. Beryllium and beryllium oxide are critical materials for the stockpile. Replacement with acceptable alternative materials would pose a significant 

technical challenge and potential risk to as-designed and tested performance. Ensuring the necessary infrastructure for the manufacture and supply of beryllium and 

beryllium oxide is vitally important to stockpile stewardship. The Laboratory has 

maintained beryllium fabrication capabilities, but relies on industry for supply. The 

National Nuclear Security Administration (NNSA) has assigned staff to oversee beryllium supply issues. The Laboratory has also conducted preliminary studies to 

help identify cost-effective technical solutions and produced a strategy document 

currently under review by NNSA. An essential part of that strategy is to examine 

potential long-term and cost-effective partnerships with industry to provide additional capabilities for the nation. 

Mrs. HARTZLER. Dr. McMillan, would you please elaborate on your suggestions for 

new authorities, streamlined processes, or other actions the government could take 

to more efficiently and speedily address NNSA’s massive infrastructure problems? 

Are there particular statutes, regulations, policies, or processes that should be revisited and streamlined (or eliminated)? 

Dr. MCMILLAN. Broadly speaking, there are three steps in the infrastructure process where streamlined approaches would be of help: • Obtaining funding • Planning and obtaining approvals on the work and • Construction. The table below summarizes a recommendation for the funding 

stage for each major level of project. 

Current 

Funding 

Limits 

Funding Type Relative Utility towards 

infrastructure Recommendation 

Up to $10M General Plant Project 

(GPP) 

Most useful method for small 

projects 

Consider increasing limit to $30M 

and index to inflation 

>$10 M Major Item of Equipment 

(MIE) 

Most useful for replacing process 

equipment and facility support systems 

Enable process tailoring by acquisition official to streamline or exempt like for like replacements of 

equipment from 413 management 

processes. 

>$10 M Line Items Used only when there is no other 

alternative 

For Line Items below $50M, eliminate Analysis of Alternatives, Independent Cost Evaluations, and require NNSA to make Critical Decisions within 30 days from Submittal Dates. 

Mrs. HARTZLER. Ms. Reichert, would you please elaborate on your suggestions for 

new authorities, streamlined processes, or other actions the government could take 

to more efficiently and speedily address NNSA’s massive infrastructure problems? 

Are there particular statutes, regulations, policies, or processes that should be revisited and streamlined (or eliminated)? 

Ms. REICHERT. As I testified, it would significantly increase efficiency and safety 

if operating lease language in OMS Circular A–11, Appendix B was relaxed to reinstate a viable lease-to-own option and allow third-party financed projects like the 

Pantex Administrative Support Complex to be scored by OMS as an operating lease. 

It would also be beneficial if the Congressional cap on NNSA line item projects was 

increased from $10 million to $25 million, and if regulations were changed to allow 

NNSA to move $10 million across control points per site with notification (up from 

$5 million). 

In addition to these provisions, there are several other actions that would help 

address infrastructure issues at the sites. These include: • Permitting NNSA to consolidate Consolidated Nuclear Security, LLC, (CNS) 

cost savings from various control accounts into infrastructure improvement initiatives under $25 million with notification to Congress. 

• Altering the 1931 Davis-Bacon Act with language that would grant flexibility 

in making wage determinations in order to allow the use of the most appropriate labor resource and the use of prevailing rates. Currently, the act applies 

to ‘‘contractors and subcontractors performing on federally funded or assisted 

contracts in excess of $2,000 for the construction, alteration, or repair (including 
97 

painting and decorating) of public buildings or public works.’’ At a minimum, 

the act should be updated to reflect a meaningful financial threshold to trigger 

action. A sum of $2,000 in 1931, when the bill was passed, is equivalent to $125 

in 2017. • Reducing the number of control points for stockpile systems to allow more flexibility to accommodate changing requirements and increased efficiency. • Repealing 40 CFR 761 and include Polychlorinated Biphenyls (PCBs) under Resource Conservation and Recovery Act (RCRA) rules for management of hazardous wastes, eliminating separate management and administrative requirements for PCBs and hazardous wastes. • Amending Clean Water Act Section 404 and related regulations to limit federal 

agency jurisdiction to high quality wetlands larger than one acre, an increase 

from the current requirement for permits on wetland disturbance greater than 

one-tenth of an acre. • Removing emergency stationary engines from 40 CFR Part 60 Subpart 1111 

and 40 CFR Part 63 Subpart ZZZZ from air permitting rules because of their 

limited use and limited amount of pollutants emitted to the atmosphere. • Eliminating application of the RCRA ‘‘mixture’’ and ‘‘derived from’’ rules under 

40 CFR 261.3 to the management of environmental media (soil, water) and 

treatment residues that otherwise might contain RCRA ‘‘listed’’ wastes. As currently applied, these rules cause soil and groundwater that contain any detectable quantity of a ‘‘listed’’ waste to be managed as a hazardous waste. • Altering the McKinney-Vento Act to allow the United States Department of 

Housing and Urban Development (HUD) assessments for homeless occupancy of 

buildings scheduled for demolition to occur on a site-by-site basis rather than 

building-by-building, eliminating the need for hundreds of redundant reviews. 

Mrs. HARTZLER. Ms. Reichert, would you please provide information to us regarding successful public-private partnerships and third-party financing arrangements 

that have been used at Pantex and Y–12? What were the cost and benefits to the 

U.S. Government for the Jack Case Center, the Pantex Administrative Support 

Complex, and other examples? 

Ms. REICHERT. The Jack Case/New Hope Center project at the Y–12 National Security Complex was a third party financed project that provided 550,000 square feet 

of new administrative/office space to replace aged, deteriorated 1940s-era facilities. 

Y–12 staff moved into the new facilities in 2007. The Administrative Support Complex project at the Pantex plant provides 343,000 square feet of administrative/office 

space and will be accomplished by the same third party financing process, replacing 

aged, deteriorating facilities. It will be ready for occupancy in the spring of 2018. 

The primary advantages of this third party financing approach are: 1) a shorter 

construction schedule (by two to three years); 2) a reduced construction cost (by 

about 25 percent); 3) the flexibility to vacate the lease with a one-year notification; 

and 4) allowing federal line item funding to be focused on recapitalizing missioncritical processes and facilities. Through this approach, the facilities can be constructed faster and more economically by using commercial standards and construction practices while not being constrained by a staged decision-making process and 

federal budget cycles where budget appropriations are received annually. 

The modern facilities allow increased operational efficiency by co-locating technical and administrative staff, as well as helping to attract, retain, and motivate 

workers. In both the Y–12 and Pantex projects, NNSA evaluated and approved mission need and performed a thorough analysis of alternatives to select the best acquisition option. This was followed by developer solicitation, proposal evaluation, and 

developer selection. In both cases, the developer performed 60 percent design and 

developed a guaranteed maximum price to allow project review and approval. 

Financial Benefits • Reductions to Maintenance costs: Enable banking of square footage, interchangeability 

between banked square footage space types, and exemptions for legitimate construction needs over the baseline would alter the incentive structure away from maintaining 

ageing and excess facilities until they are aligned with construction efforts. 

Technical Benefits • Integration of longer-term solutions to space reduction allows mission needs to be met 

while optimizing utilization of space. 

Other Benefits • Acceleration of demolition Efforts: Allowing for greater site flexibility would allow for better 

incentive structures to encourage contractors to aggressively pursue demolition without 

having to absorb mission risk for not having the square footage to construct replacements. 

Mrs. HARTZLER. Ms. Reichert, please describe the Material Staging Facility 

project at Pantex. What are the expected costs and benefits of this project? What 

cost savings/avoidances are likely to be realized by eliminating the need for recapi-
98 

talizing Zone 4 at Pantex and shrinking the size of the protected area? How would 

security and safety be improved by eliminating the need for intra-site transportation 

of weapons and components? What is the status of this project and when will be 

it be initiated, constructed, and opened? 

Ms. REICHERT. The Material Staging Facility has received mission need approval 

(Critical Decision 0) from NNSA and is beginning the requirements validation and 

analysis of alternatives phase. At Critical Decision 0 submittal to NNSA, the preliminary estimate for the facility was $179M to $714M with a point estimate of 

$357M (range of ¥50 percent to +100 percent of point estimate). This estimate is 

based on very preliminary information; as the project proceeds, existing designs for 

similar Air Force base facilities will be examined for direct applicability and potential cost savings. 

Cost savings projected over a 50-year period approach $2 billion. Primarily, we 

would avoid having to replace deteriorating Pantex Zone 4 facilities (including the 

development of additional storage space as the current facilities approach maximum 

capacity) and the Zone 4 Perimeter Intrusion Detection & Assessment System 

(PIDAS), which is estimated to cost between $81–322 million. It would also avoid 

costly material transport between separated Protected Areas and reduce operating, 

maintenance, and protection costs. Security would be greatly improved by having 

material storage and staging directly coupled to the assembly/disassembly operations at the Pantex Plant rather than having to transport material several miles. 

Assuming the project can complete the analysis of alternatives and receive FY 2019 

capital funding, the earliest facility completion would be FY 2023. 

QUESTIONS SUBMITTED BY MR. ROGERS 

Mr. ROGERS. Mr. McConnell, would a FIRP-like program, with special authorities 

to quickly pursue key projects, provide added value to NNSA’s infrastructure recapitalization efforts? What special authorities could be included in such a temporary 

program? 

Mr. MCCONNELL. During the last several years, NNSA restructured our budget 

to provide clarity and focus on infrastructure investments consistent with what was 

achieved under the Facilities and Infrastructure Recapitalization Program (FIRP). 

The two FIRP-like programs that address deferred maintenance today are: 

• Maintenance and Repair of Facilities; and 

• Recapitalization: Infrastructure and Safety. 

Sustained, predictable, and increased investments in these two programs, rather 

than the creation of a separate program, are needed to improve the condition of 

NNSA’s infrastructure and reduce deferred maintenance. 

The Administration will consider changes to existing authorities that could help 

NNSA implement infrastructure improvements faster and more efficiently to eliminate deferred maintenance and arrest the decline of infrastructure. We look forward 

to engaging Congress when and if specific legislative changes are sought by the Administration. 

Mr. ROGERS. Mr. McConnell, does NNSA have metrics or ways to measure the inefficiencies or costs that are being borne because of the existence of very old buildings and a very large backlog of deferred maintenance? What are those costs, as a 

rough order of magnitude estimate? 

Mr. MCCONNELL. NNSA is investigating new measures to give greater insight into 

the costs and inefficiencies caused by the declining state of infrastructure. A clear 

indicator of costs borne from old and declining facilities is the annual carrying cost 

of excess facilities. NNSA spends approximately $50 million annually for excess facility maintenance, surveillance, and stabilization to keep the facilities in safe and 

stable condition until eventual disposition. 

Mr. ROGERS. Dr. McMillan, how would you improve DOE and NNSA’s approach 

to managing risk? Are mission risks being appropriately weighed and balanced 

against operational risks and other types of risk? Is there an appropriate process 

for elevating such risks to senior levels and getting timely decisions? How should 

this be structured? 

Dr. MCMILLAN. There are many forms of risk present in the NNSA portfolio. Two 

areas of specific concern are mission/program risk and operational risk. Over the 

past twenty years, the NNSA has developed a robust, but cumbersome and expensive system for managing operational risk, which has had some positive effect on 

the rate of NNSA safety incidents. This system can also limit productivity in the 

constant pursuit of engineered facilities regarded as ‘‘perfect’’. An overemphasis on 

operational risk can actually increase mission risk. The process to improve infrastructure is a good example of unbalanced risk. Regulatory requirements and long 
99 

government deliberations for new facilities increase costs and delay the acquisition 

process. As a result, fewer facilities are built and those in construction take too long 

to complete. The net result is the prolonged use of older, aging facilities and increased safety and mission risk from extended use. For example, NNSA and its 

predecessor organizations have been actively trying to replace the capabilities from 

the Chemistry and Metallurgy Research (CMR) facility since 1984, a process that 

will now likely extend to near 40 years. There are limited incentives in government 

to make timely and balanced risk decisions. Often, as a result of multiple layers of 

reviews, the most conservative accident scenarios and solutions are chosen that lead 

to increased project costs and delays. Elevating risk decisions can sometimes lead 

to multiple layered reviews adding to the time to make decisions. Because NNSA 

Defense Programs is responsible for the budget funding these projects, we suggest 

that the responsibility for balancing program, operational and project risk reside 

there. There is a desire on the part of Congressional appropriators to have projects 

that never exceed budget even though the project costs are often forecasted years 

earlier. This creates pressure on NNSA to always request more funding than is 

needed to ensure that projects never overrun. This conservative behavior leads 

sometimes to fewer projects being requested than are needed because not enough 

funding is available to guarantee all the project’s success. 

Mr. ROGERS. Dr. McMillan, how would you suggest enforcing a lockdown of safety 

requirements during development and design of a large construction project? At 

what phase/stage of the project should all requirements be locked? What level of 

senior official approval should be required after that stage to make changes to such 

requirements? Can you provide an specific example where changing requirements 

late in a project has led to increased costs? 

Dr. MCMILLAN. The philosophy of safety through integration in design is being 

carried to extremes. The interpretation of how requirements are applied sometimes 

changes during the development of the safety basis documents. Improved consistency in risk acceptance across government could be achieved by revising DOE 

Standards and Orders to reflect industry standards wherever possible and to seek 

consistency with other non-DOE regulatory, risk acceptance requirements (e.g., Nuclear Regulatory Commission (NRC), Occupational Safety and Health Act (OSHA) 

to reduce costs and provide adequate risk reduction. 

a) How would you suggest enforcing a lockdown of safety requirements during development and design of a large construction project? 

Lockdown of reasonably conservative safety requirements early in projects can improve the likelihood of project success. Imposing additional safety requirements at 

later stages of the project leads to increased costs and extended schedules. After 

CD–1, given that our current process is conservative by design, any additional requirements should be accompanied by a cost-benefit analysis and a proposal for a 

cost-neutral impact to the project. If the additional requirement is not cost neutral, 

then it should not be implemented unless it addresses a previously unidentified gap 

that must be closed. The project manager and program owner must be empowered 

to examine these requirements as they are gathered and compile a reasonable list 

of applicable requirements. 

b) At what phase/stage of the project should all requirements be locked? 

The current practice of locking in controls at the Critical Decisions stage is appropriate. Design requirements, including code-of-record (COR), are locked down at the 

declaration of conceptual design (CD–1). Credited safety class and safety significant 

Systems, Structures and Components (SSC) are supposed to be locked down with 

approval of a Preliminary Documented Safety Analysis (PDSA) (CD–2). As previously stated above, the lockdown of safety requirements should be viewed as conservative at these stages and the expectation should be made clear that the final 

set of controls identified in the Documented Safety Analysis (DSA) (CD–4) can be 

reduced from the controls in the PDSA when assumptions and uncertainties about 

facility operations are better known. Reliance on appropriate Specific Administrative 

Controls (SACs) and Initial Conditions in the DSA should also be expected as an 

appropriate means to augment expensive engineered controls. Relying only on engineered controls may not be affordable. 

c) What level of senior official approval should be required after that stage to make 

changes to such requirements? 

As discussed earlier, any increased changes to safety requirements or credited 

controls should be subjected to a cost benefit analysis and not implemented if they 

increase total project costs and provide marginal improvements in safety. Any increase must be elevated to the National Nuclear Security Administration (NNSA) 

Administrator for approval and resolved quickly (time is money). To support these 

decisions, reductions in mandated Code of Record requirements may require an exemption request, which should be approved by the local safety basis approval au-
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thority. Currently all exemption requests must be approved by U.S. Department of 

Energy/Headquarters (DOE/HQs) and these deliberations can take months to resolve, not including the desire by the Defense Nuclear Facilities Safety Board 

(DNFSB) to also review and weigh in all of these matters. 

d) Can you provide a specific example where changing requirements late in a 

project has led to increased costs? 

The combination of the following LANL specific examples has resulted in excessive additional costs during project design, construction, and operations for engineered controls, without consideration of costs against the benefit of risk reduction. 

TRU Waste Facility (TWF) Fire Suppression System (FSS) and Use of Forklifts Significant debate between NNSA and Los Alamos occurred to resolve a disagreement 

regarding need for credited building fire suppression systems (FSS). NNSA directed 

that six months after startup the Transuranic Waste Facility (TWF) FSS be upgraded to Safety Significant (SS). One reason is to control battery failure-caused 

forklift fires in lieu of using administrative controls on combustible loading (removing the hazard; a preferred strategy), maintenance on a forklift (preventive), and a 

fire watch during forklift waste handling within the buildings. Electric forklifts were 

already planned instead of hydrocarbon-powered units to improve safety during the 

earlier conceptual design phase of the project. Ultimately, the Laboratory will be required by NNSA to credit the FSS for this facility, regardless of the work to remove 

ignition sources and combustibles from the facility. This direction will increase operational costs for marginal safety improvement and the debate added months to the 

schedule. TRU Waste Facility (TWF) Sealed Sources, Government Furnished Equipment (GFE), and Safety Controls In this case, additional safety controls were required for Government Furnished Equipment (GFE) of a High-Energy Neutron 

Counter (HENC) trailer for an operational fire hazard. The trailer will contain the 

GFE provided DOE EM Central Characterization Program (CCP) HENC. ANSI-certified calibration sources (designed per DOE CCP specifications) required additional 

controls, in this case a Safety Significant fire rated safe as a control. This is inconsistent with other sites in the DOE complex using the same equipment. This example highlights inconsistent application of DOE safety requirements. Chemical Hazards Analysis for the Hazard Category 3 Transuranic Liquid Waste (TLW) Facility 

A chemical hazard (Sodium Hydroxide) at TLW that is commonly used in industrial 

applications, such as making paper and soap, is being required to go beyond standard industry practice with respect to controls. In this case, a splash shield around 

piping and equipment is being driven to increased nuclear safety requirements 

when industry practice and DOE guides don’t require it. A sodium hydroxide solution leak and spray that could burn operators is beyond unlikely since we can administratively bar them from the work area during solution transfers. This ultraconservative direction and interpretation of DOE regulations is leading to overly 

conservative controls for chemical hazards in Los Alamos National Laboratory 

(LANL) nuclear facilities. 

Mr. ROGERS. Dr. McMillan, you specifically mention reviewing several OMB and 

DOE rules and policies on disposing of unneeded facilities. What would you suggest 

be changed in these policies? What are the impacts on your organization and the 

enterprise from the existing policies? 

Dr. MCMILLAN. Los Alamos has annually worked to manage the site footprint, resulting in a reduction of nearly 1.6 million square feet of facility space over the last 

10 years. We used to be able to take down facilities and ‘‘bank’’ the space reduction 

to offset needed building to prove that we are actively managing the total Laboratory square footage. We had banked a lot of space reduction credit that was erased 

in 2015 by new OMB rules. So now we must plan to reduce space in the same fiscal 

year as we build new and receive no credit for our demonstrated history of good 

stewardship. Clearly, this policy is cumbersome and unlikely to achieve the intended 

benefit. We should get the credit from previous space reduction so we can continue 

to provide the enterprise the agile facilities necessary to respond appropriately to 

changing mission demands. Proposed Action and Justification We propose that OMB 

modify the Management Procedures Memorandum 2015–01 to address deficiencies 

in the current guidance that unintentionally imposes costs associated with delayed 

demolition and slows the effective reduction of the Federal real property footprint 

at some sites. To enable more effective Footprint reduction and impose fewer impacts on new construction planning, we propose the following actions: 

• Modify Memorandum 2015–01 to include language authorizing Federal sites to 

re-establish their previous Square Footage Bank that includes all offsets accrued through disposition since 2002 and from which square footage can be deducted when mission needs require new construction. Because the relationship 

between demolition and construction is often sequential, it is necessary to first 

demolish before new construction can be funded in the out years. Prior to the 
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Reduce the Footprint initiative, NNSA sites were permitted to maintain a 

Square Footage Bank of demolished assets from which deductions could be 

made when missions require additional space. This process led to highly aggressive demolition efforts to reduce the overall maintenance burden and free up 

funding for construction of modern and efficient facilities. In order to return to 

the efficiency and flexibility of this system we recommend the addition of a section authorizing sites to utilize the Square Footage Banks they have established 

since 2002 to ‘‘right size’’ the federal footprint. • Modify Memorandum 2015–01 to specify that Office and Warehouse spaces are 

convertible and the demolition of one space type can provide offsets for the construction of the other space type. In order to provide maximum flexibility to the 

guidance that office and warehouse space be tracked and reduced, we recommend that OMB add language to enable the conversion between the two 

space types. Providing clarification to enable the demolition of office space to 

offset new construction of a warehouse and vice versa would improve flexibility 

in meeting changing mission requirements. • Modify Memorandum 2015–01 to include guidance on how agencies may obtain 

an exemption from the requirements of this Memorandum. In the event that 

agencies and their sites experience growth in mission and have a legitimate 

need for increasing the square footage above baseline, there is no formal mechanism for obtaining an exemption. We propose that a section be added to Memorandum 2015–01 that provides guidance for how agencies and sites can obtain 

exceptions to the rules when mission requires or when Congress authorizes 

Capital construction in excess of the baseline limits. 

Mr. ROGERS. Dr. McMillan, how could we go about ensuring analyses of alternatives are completed in a timely fashion and decisions are made shortly thereafter? 

Dr. MCMILLAN. A formal Analysis of Alternatives (AOA) should not be required 

for all projects. Applying requirements for AOAs and other reviews as a one size 

fits all approach may lead to increased costs and delays to achieve new facilities and 

capabilities. An AOA is too cumbersome for projects where the solution is obvious 

(like replacing the 40-year-old plutonium facility fire alarm panels), yet appropriate 

for larger projects such as plutonium facility modular additions. Also, additional 

scheduling delays are inevitable due to the sheer volume of projects currently requiring AOA review. The same is true for other reviews required by DOE O 413.3B, 

including Independent Project Reviews and Independent Cost Estimates. Small 

projects should have a tailored process that balances increased costs and delays 

against unquantifiable risk. Full compliance with DOE O 413.3b should be returned 

to the previous limit of projects costing more than $50M and above, instead of the 

current $10M and above. Project Management Executives (PME) should be allowed 

greater authority over scope definition and approvals. PMEs have the ultimate authority to make decisions and resolve conflicts. We recommend the following: 

• Eliminate requirement for NNSA cost evaluation organization to concur with 

AOAs scope or results, since there is no benefit to this requirement. 

• Clearly articulate the program requirements for the AOA at the initiation of the 

process. 

• While the AOA process should be independent, ensure each team includes members who understand the labs, how the project fits within the mission, and is 

able to work with lab representatives to gather additional data. 

• Ensure that the AOA team is staffed with members possessing necessary expertise. 

• The AOA team should stay focused on what is the right choice for the nation, 

between well-defined alternatives, for various alternatives with different scopes, 

schedules and budgets—and the extent to which they meet the requirements. 

• Ensure that the AOA team clearly understands the scope and focus of their 

tasking. 

Mr. ROGERS. Dr. McMillan, does the condition of the infrastructure at your sites 

affect your ability to attract, retain, and motivate workers? Do the substandard conditions harm morale? 

Dr. MCMILLAN. The Laboratory works hard to attract and retain the best and 

brightest workforce possible; we are mindful that we are recruiting in a very challenging environment, competing against other laboratories, the tech giants in Silicon 

Valley and elsewhere. We typically succeed when we can demonstrate that recruits 

will be able to work on complex scientific and technical challenges in the service of 

national missions, and will have access to state-of-the-art experimental and supercomputing tools. 

Workers can become demotivated quickly, however, as a consequence of residing 

in spaces that are in poor condition, buildings with systems that break down frequently and areas where repairs are difficult or delayed. 
102 

When I testified before the Committee, I talked about the need to invest in the 

people who are the stewards of the stockpile who must not be overlooked when discussing infrastructure investment; in fact, the two must go hand-in-hand. The ability to attract, educate, and retain the best-and-brightest minds who will be our next 

generation of weapons scientists and engineers are integral to, and dependent upon, 

such investment. Every year we make tough calls when setting priorities for infrastructure and maintenance spending. Mission priorities rank highest, with roads, 

electrical infrastructure, and offices as lower priorities. As a result, we currently 

have some employees in ‘‘temporary’’ trailers that have been in use for more than 

30 years, and we regularly have to manage rodent issues, leaking roofs, and other 

effects of aging. 

Such an environment is not conducive to hiring the nation’s best-and-brightest 

workforce, and certainly doesn’t provide our laboratories with a competitive edge in 

recruitment and retention when contemporary private-sector technology companies 

offer attractive and inviting campuses. Investments would allow us to demolish old 

structures and move the workforce of the future into offices and laboratories that 

are appropriate for the mission. Staff morale is also impacted by the pace infrastructure upgrades can be made. Los Alamos works to efficiently address infrastructure 

issues. At the same time, the scale of the Laboratory and the age of our facilities 

make it impossible to get to everything at the pace that we would prefer. 

Mr. ROGERS. Ms. Reichert, does the condition of the infrastructure at your sites 

affect your ability to attract, retain, and motivate workers? Do the substandard conditions harm morale? 

Ms. REICHERT. Attracting and retaining the next generation of great workers becomes more challenging in facilities that are in a deteriorated state and morale is 

impacted by the conditions of our facilities. As I discussed during the hearing, our 

workers experience the infrastructure challenges every day. They remain vigilant in 

performing their jobs to the highest standards while often working in facilities that 

are less than ideal, and are the subject of frequent repairs and outages. Furthermore, many of our workers have had life long careers at the sites and for them, 

keeping the sites going is truly a service to the nation with a knowledge of the past 

difference these sites have made. But they deserve better. 

Projects like the Jack Case and New Hope Centers at Y–12, the Highly Enriched 

Uranium Materials Facility at Y–12, and the Administrative Support Complex and 

the High Explosives Pressing Facility at Pantex go a long way toward addressing 

morale issues, but it is no doubt a challenge to recruit top talent while competing 

against industries that can provide better facilities with modern safety, security, 

and work environment amenities. The excitement at the groundbreaking for the 

Pantex Administrative Support Complex in August was palpable, and it is very apparent that employees are excited to work in a state of-the-art facility that is commensurate with the importance of their jobs to national security. 

Mr. ROGERS. Can you elaborate on the process used to pick a developer for the 

Pantex Administrative Support Complex? 

Ms. REICHERT. Consolidated Nuclear Security went through a rigorous process to 

select a developer for the Pantex Administrative Support Complex. That process 

began in April 2015 after CNS received approval from the National Nuclear Security Administration to pursue a leasing arrangement. On April13, 2015, CNS published a Sources Sought Notice on FedBizOpps (fbo.gov) to seek parties interested 

in developing/leasing an administrative complex. 

A meeting was held at Pantex on May 19, 2015, to provide information to and 

answer questions from companies that responded to the Sources Sought Notice. At 

that time, proposals were requested from interested developers. Four responsive 

proposals for the new Administrative Support Complex were received. CNS established a selection team and selection criteria and hosted four proposal teams for oral 

presentations on June 2–3, 2015. The team selected Lawler-Wood, LLC, to further 

develop an Administrative Support Complex leasing agreement. 

Lawler-Wood’s proposal called for construction on land owned by Texas Tech University, funding through a bond offering, and partnership with a local economic development agency to establish a special purpose entity to own the facility. The approach was identical to the model that was used to develop and construct the Jack 

Case Center and New Hope Center at the Y–12 National Security Complex. 

After CNS entered into a pre-construction agreement with Lawler-Wood, LawlerWood entered into an agreement with the Panhandle Economic Development Corporation (PEDC) to issue bonds to pay for the facility and to establish a special purpose entity to own the facility and repay the bonds. Following NNSA approval for 

the Administrative Support Complex project, Pantex Administrative Support Complex, LLC, (the PEDC special purpose entity) was established and a final lease 

agreement was signed by Pantex Administrative Support Complex, LLC, and CNS 
103 

establishing a five-year lease agreement with two five year renewal options. The 

purchase of the land from Texas Tech University was also completed at that time 

and Pantex Administrative Support Complex, LLC, entered into a development 

agreement with Lawler-Wood Pantex, LLC, to design, build, and manage the Administrative Support Complex. 

QUESTIONS SUBMITTED BY MR. DESJARLAIS 

Mr. DESJARLAIS. Could you please provide a list of ‘‘single-point failures’’ within 

the NNSA enterprise. Facilities that, if they go down, we lose a critical capability 

that endangers the ability of the entire enterprise to sustain the stockpile. 

General KLOTZ and Mr. MCCONNELL. Over the last several decades, NNSA has 

taken action to eliminate unnecessary redundancies across the NNSA enterprise. As 

a result, most facilities under NNSA’s purview are considered to be single points 

of failure. Additionally, most pieces of programmatic equipment and facility systems 

(such as fire suppression, heating and cooling, and dehumidification) housed in 

these facilities are also single points of failure. 

Mr. DESJARLAIS. You stated that you are working with the NNSA on a lithium 

strategy to ensure we have materials in future for weapons stockpile. Could you 

elaborate on this strategy? Are similar strategies being developed for the other key 

areas of concern (uranium, high explosives at Pantex)? 

Ms. REICHERT. All three of our main capabilities—uranium and lithium at the Y– 

12 National Security Complex and high explosives at Pantex—are essential to the 

National Nuclear Security Administration’s weapons program and are priorities for 

modernization. Lithium capabilities are housed at Y–12 in Building 9204–2, an 

original Manhattan Project facility built in 1943. As I testified, the facility infrastructure and process equipment is deteriorating rapidly making it costly to maintain safe and reliable operations while production is ongoing and requirements are 

increasing. Currently, several initiatives are under way to ensure we maintain our 

lithium capabilities. Planning is ongoing for a new Lithium Production Capability, 

but as part of a Lithium Bridging Strategy, we are also increasing useable inventory, repairing degrading infrastructure, and deploying new technologies. 

Similar strategies have been developed for uranium at Y–12 and high explosives 

at Pantex. The Uranium Processing Facility is key to the uranium strategy. When 

it’s completed, it will be a first-of-its-kind complex for enriched uranium operations 

in support of Y–12 missions, replacing a 70-year-old facility, the 9212 complex. At 

the same time, other facilities that support uranium work at Y–12, Buildings 9204- 

2E and 9215, are undergoing Extended life Programs that will help sustain operations there in the coming decades. A three-prong approach to the facilities is being 

taken that includes reducing material-at-risk so the consequences of an accident are 

significantly reduced, replacing or refurbishing key facility infrastructure and process equipment, and addressing and updating regulatory requirements. 

At the Pantex Plant, we’ve also been moving to modernize our high explosives infrastructure. In February, we completed construction on the 45,000-square-foot High 

Explosive Pressing Facility, which will provide a new high explosive main-charge 

pressing facility that can meet the needs of changing weapons complexity, projected 

workload, and Life Extension Program activities. The facility consolidates high explosive main-charge pressing operations from six outdated buildings into a single, 

state-of-the-art facility while providing increased levels of protection for workers. 

Planning is also under way for a new High Explosive Science and Engineering facility that will consolidate science and engineering offices and high explosive laboratories into two new buildings, including a 27,420-square-foot High Explosives Laboratory, a 38,487-square-foot Technology Development & Deployment Laboratory 

and a high explosive staging area. 

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