June 8, 2015 

MEMORANDUM TO: Mark A. Satorius 

 Executive Director for Operations 

 Maureen E. Wylie 

 Chief Financial Officer 

FROM: Annette L. Vietti-Cook, Secretary /RA/ 

SUBJECT: STAFF REQUIREMENTS – SECY-15-0015 – PROJECT AIM 

2020 REPORT AND RECOMMENDATIONS 

The Commission commends the Project AIM team, the Guiding Coalition, and the staff 

members who participated in any of the outreach efforts related to Project AIM 2020 for their 

hard work and contributions to this report. By undertaking some of the Project AIM 2020 

recommendations with strong leadership commitment and oversight, the agency will be better 

positioned to respond to challenges of 2020 and even beyond. 

The staff should plan for an FTE ceiling of 3600 by the end of Fiscal Year 2016 so that the 

agency can begin the transition to the eventual target for 2020. 

The NRC should always seek to achieve the highest standards of performance, but it must do 

so with a balanced perspective of the significance of the activity in the overall context of our 

regulatory responsibility and with the overarching objective to be focused on the right things 

while enhancing its ability to adjust to the changing environment by being more agile when it 

comes to supporting higher-priority work that arises. 

The NRC should identify and consider additional opportunities to apply more broadly risk 

insights to enhance our decision-making beyond traditional technical issues. Decision-making 

that uses a graded approach should also be applied to determining priorities and the level of 

resources dedicated to our corporate and infrastructure programs. 

The Executive Director for Operations (EDO) and the Chief Financial Officer (CFO) are 

accountable for the overall Project AIM 2020 implementation. However, NRC's senior 

leadership should consider its role in ensuring that Project AIM 2020 is successful before it 

looks to develop new processes while ensuring that the staff is engaged in this effort because it 

is important that they embrace and take ownership of the results of Project Aim 2020. 

The EDO and CFO should develop and submit an overall implementation plan to the 

Commission for the approved recommendations, including how they will be sequenced and 

assigned. This plan should focus on implementation timeframes and metrics and ensure that it 

is feasible to execute each approved recommendation within the established schedule. The 

EDO should provide periodic updates to the Commission on the status of implementation. 
The Commission has disapproved the National Academy of Public Administration suggestion 

that the NRC may be well-served by a Chief Risk Officer. The staff should consider whether the 

successful management of enterprise risk should be a factor/element in the annual performance 

evaluation of agency managers. 

The Commission’s direction to the staff and comments on the specific recommendations are 

provided below. 

I. People 

I-1) Ensure the NRC has the right number of people with the right skills at the right time. 

a) Develop a strategic workforce plan that ensures the NRC is positioned to have 

the right number of people with the right competencies at the right time. 

The Commission has approved the development of a Strategic Workforce Plan (SWP) that 

maps the current workforce to the projected future state of the agency workforce. 

The staff should understand and apply lessons learned from the experiences with the previous 

SWP tool. The SWP should be a modest effort and not overly elaborate or burdensome that 

occurs in parallel with the implementation of other recommendations. The SWP tool should be 

sophisticated enough so that it can be used as needed to assess organizational health at the 

division, office and agency levels while setting a standard approach that can be easily deployed 

and managed by first-line supervisors and modified to meet the changing needs of their 

organization. Specifically, the SWP should include strategies for managing and minimizing 

staffing overages, skill gaps, and include the need to have staff in the right place, for example 

filling resident inspector and regional SES positions. Hiring managers should also work with 

the Office of the Chief Human Capital Officer to thoughtfully assess whether to fill vacancies as 

they are created by attrition. 

In addition, the staff should continue to analyze the staff-to-management ratios and whether 

levels of management can be decreased when implementing each approved recommendation 

that contemplates the overall structure of a program or organization. Finally, the SWP should 

be dynamic, requiring updates as related items, such as the re-baselining, are completed. 

I-2) Enhance employee agility by reducing the time required to shift employees or their 

work assignments to meet the demands of a changing environment by the 

following: 

a) Based on agency priorities developed in I-1.a., develop a plan to identify mission 

critical and/or safety-related positions considered most important for immediate 

needs analysis (based on criteria such as highest percentage of workforce 

characterized by the position or role, criticality of the job functions performed, 

amount of training dollars targeted toward positions, maturity of the 

qualification program, etc.). 

b) Based on outcome of I-2.a., determine timeline for developing competency 

models for other agency occupations and functions. 

The Commission has approved implementation of the steps for I-2.a and b upon completion of 

recommendation I-1.a. 

I-3) Increase organizational agility and efficiency through focus on “One NRC” and on 

outcomes. 
a) Develop or adopt an explicit NRC leadership model (or leadership philosophy) 

that builds on the agency’s existing culture (Principles of Good Regulation, 

Organizational Values) and supports agility, to include empowering employees 

by promoting personal responsibility and accountability along with creative 

thinking, innovation, and informed risk-taking in all of our activities. Refine the 

NRC Organizational Values to incorporate those values necessary to support 

organizational agility or clarify that they are already included under the existing 

values. 

The Commission has disapproved recommendation I-3.a, and does not support the 

development of a separate NRC leadership model or modifying the NRC Organizational Values. 

Rather than developing a separate NRC leadership model, the Commission believes that 

effective decision-making can be achieved by focusing on the Principles of Good Regulation 

and the Organizational Values and the Behavior Matters campaign. Specifically, the staff 

should focus attention on those characteristics of the Principles of Good Regulation and 

Organizational Values that support empowerment and feeling a sense of personal responsibility 

and accountability through creative thinking, innovation, and informed risk-taking in all of our 

activities. 

In addition, the staff should return to this concept and re-examine whether this concept is a 

separate undertaking or is an organizational outgrowth of progress on the other 

recommendations, and report to the Commission on whether this concept is, in the staff's view, 

still needed and if so, what form it would take. 

b) Explore greater reliance on centers of expertise to provide leadership, best 

practices, research, and support in particular focus areas across the agency. 

Currently, the NRC is utilizing centers of expertise across certain business lines 

in areas such as vendor oversight, electrical engineering, allegations, force on 

force inspections, and fire protection licensing reviews. Based on the 

evaluation, expand reliance by establishing additional centers of expertise. 

The Commission has approved the evaluation of the effectiveness of existing NRC Centers of 

Expertise (COE) to determine whether expansion of this organizational model will lead to 

greater effectiveness and efficiency in accomplishing the agency's mission. 

The staff should provide the Commission, for its review and approval, an evaluation and 

recommendations related to COEs. The staff’s evaluation should address the following: 

• What additional specific centers of expertise the staff recommends, if any, and what office 

would house each center, the appropriate balance between staff, contractors, and 

Department of Energy laboratories as well as other outside laboratory or academic 

institutions and what efficiencies should be expected from the establishment of these 

centers of expertise. 

• How these centers would avoid the "stove-piping" that the report identifies as a concern with 

the existing office structure. 

• How the agency would avoid organizational complexity and confusion with the creation of 

additional centers of expertise. 
• Use the lessons learned from the Transforming Assets into Business Solutions (TABS), 

including National Treasury Employees Union (NTEU) observations, the Office of Nuclear 

Materials Safety and Safeguards/Office of Federal and State Materials and Environmental 

Management Programs merger, and existing centers of expertise in its evaluation. 

c) Develop a transitional plan that describes the approach to conduct a merger of 

NRO and NRR at the appropriate time, along with any associated organizational 

changes in Region II. The plan will describe key criteria and factors that need to 

be considered, interim actions that will be undertaken as key milestones are 

achieved, and potential future events that could accelerate or decelerate the 

timing of the merger. 

The Commission has approved the recommendation for staff to develop a plan to 

conduct a merger of NRO and NRR, at the appropriate time. The plan is due to the 

Commission no later than 12 months from the date of issuance of this SRM, and will 

come to the Commission for its review and approval. The plan should include a 

business case for the merger, a description of the efficiencies achieved and any 

special challenges posed by a merger as well as how the staff intends to address any 

challenges. The staff’s proposed timing for a merger should take into account the 

need to avoid any detrimental impact to the ongoing and projected work of each 

organization. 

Separate from the merger plan, the staff should look at the agency broadly taking into 

account the re-baselining to ensure that the right work is being done in the most 

efficient and effective manner. 

d) Evaluate further consolidation of the regional materials program to determine 

whether further consolidation would be more efficient. The Materials Program 

for Regions I and II was successfully consolidated into Region I in 2006. 

The Commission has approved recommendation I-3.d. The staff should submit to the 

Commission a SECY paper with a specific consolidation plan prior to implementation. The staff 

should submit to the Commission a SECY paper assessing the pros and cons of further 

consolidation of the regional materials program. If further consolidation is recommended, the 

staff should provide the Commission, for its review and approval, a specific plan prior to 

implementation of any consolidation. 

e) Evaluate the corporate support functions in the regions to ensure they are 

appropriately resourced and identify if any savings can be reached through 

standardization or centralization of specific functions. The evaluation should 

reflect upon the lessons learned from the Transforming Assets into Business 

Solutions initiative. 

The Commission has approved recommendation I-3.e. This activity should consider comments 

from the NTEU, and lessons learned from the TABS initiative. This effort should be coordinated 

with implementation of any other corporate support efforts recommended by the Project AIM 

team and approved by the Commission. 

II. Planning

II-1) Improve the Planning and Budget Formulation Process 
a) Benchmark with other agencies and seek external validation from a third party 

to clearly define and justify overhead as well as identify the variable 

components of Corporate Support. 

The Commission acknowledged that the effort for II-1.a is underway and has approved its 

continuance. Carrying out this activity should involve both properly defining "corporate support" 

and actually reducing unnecessary agency overhead, however the term is ultimately defined. 

b) Clarify agency priorities and use office and agency add/shed procedures to 

ensure effective and efficient use of the staff’s time and resources. 

The Commission has approved recommendation II-1.b. The staff should develop a common 

prioritization process with a supporting add/shed procedure that integrates all work activities 

across the agency and includes external mandates. Efforts to improve the common 

prioritization process should begin immediately to inform decisions in the FY 2017 budget 

formulation process, to the maximum extent practical. 

The staff should provide its Common Prioritization Rulemaking Plan with the annual budget for 

Commission review and approval. 

c) Utilize foresight methods and stakeholder engagement to get a more informed 

estimate of the future to ensure the agency is prepared. This substrategy 

develops a process that would be implemented on an annual basis as part of the 

planning and budget formulation process and in support of the quadrennial 

revision of the Strategic Plan. 

The Commission has disapproved recommendation II-1.c. The staff should continue its current 

practice for receiving input from licensees and the industry on expected future workload to make 

projections on both a formal and informal basis to enhance resource decisions in formulating its 

budget. The staff should apply the lessons learned from the development of the Project 

Aim 2020 report regarding assessment of the external environment into the current strategic 

planning and budget processes. 

II-2) Re-Baseline the work of the Agency 

a) Conduct a review of the work performed across the agency and confirm the 

basis for the work (the requirement(s) that the work is intended to fulfill, whether 

it is required by law (including judicial mandates and regulations), or 

Commission direction). Work that is not required could be shed to help make 

the agency more lean and reduce future budgets. With the growth that occurred 

from FY 2005 through FY 2010, new activities may have been added to the 

agency’s workload and budget that are no longer required or to a lesser degree. 

This activity would be performed by the staff, with assistance from an outside 

entity. 

The Commission has approved rebaselining the work of the agency. 

This should be a one-time assessment that results in the Commission receiving, for its review 

and approval, a comprehensive list of activities that can be shed, de-prioritized, or performed 

with a less intense resource commitment. The rebaselining effort should be integrated with the 

effort to clarify agency priorities. This effort should begin as soon as practical. 
This effort should not focus exclusively on whether there is a specific statutory requirement or 

Commission direction to perform a given task. The process should also consider what work is 

most critical to the safety and security mission of the agency and how the relevant NRC staff 

subject matter experts would prioritize this work consistent with the agency’s mission, values, 

and the Principles of Good Regulation. If through this process, the staff finds that the agency 

expends resources on tasks that may no longer be necessary, but which the staff was 

previously directed to perform, the staff should propose changes for Commission review and 

approval along with a discussion of why the task was originally required and why it is no longer 

needed. 

The Executive Director for Operations (EDO) should actively oversee the re-baselining and 

provide clear guidance to ensure a consistent and effective review. 

The re-baselining is a critical effort and should involve Office Directors, Division level managers 

and staff in developing recommendations so that there is acceptance and ownership of the final 

result. This re-baselining should also ensure that the NRC performs those work activities 

necessary to fulfill its regulatory mission. The staff should submit its plan for conducting the 

re-baselining to the Commission. This should take the form of an information paper. 

III. Process 

III-1) Improve the transparency and simplify how the NRC calculates and accounts for 

fees, and improve the timeliness of when the NRC communicates fee 

changes. When the NRC published the 2014 Fee Rule, many commenters raised 

concerns regarding the lack of clarity in the work papers presented to justify 

fees. Identify the specific reasons for the stated fee changes and determine 

necessary changes to any future presentation and communication of fee changes to 

the industry. Also, assess alternative methods of allocating fees, including looking 

at whether flat fees should continue to be applied to materials licensees, and if the 

use of flat fees should be broadened to other NRC license categories, regulatory 

activities and applicants to provide a simple and predictable billing process. 

The Commission has approved recommendation III-1 and notes that this effort is currently 

underway. 

III-2) Improve licensing by conducting a business process improvement review of the 

operating reactor licensing process and make associated improvements to enhance 

the predictability, timeliness, and efficiency of the reviews, while ensuring and 

measuring the effectiveness and quality of the reviews. 

The Commission has approved recommendation III-2. The conduct of a business process 

improvement (BPI) review of the operating reactor licensing process should be done on a 

schedule that does not affect the staff's ability to reduce the backlog of licensing actions. The 

Commission approved the staff proposal to delegate to the Director of NRR the decision-making 

about this activity – its timing, its scope, and the application of its results. Available lessons 

learned about how this backlog originated and how it was resolved should be incorporated into 

the review. 

III-3) Improve processes by streamlining, standardizing, and clarifying roles and 

responsibilities: 

a) Evaluate and improve the acquisition process to clarify the roles and 

responsibilities of the Contract Officer Representative (COR), standardize 

processes, and improve quality and process time. 
b) Improve efficiency of processes by expanding the use of mobile information 

technology solutions across the agency. 

c) Eliminate multiple request systems and paper forms by developing and 

implementing a streamlined “One-Stop-Shop” solution for OIS and ADM 

requests for services and support. This strategy would identify, evaluate, and 

define the requirements for such a solution. 

d) Re-examine the processes and practices associated with the NRC’s 

assessment of the risks to its information systems in accordance with the 

Federal Information Security Management Act (FISMA). 

The Commission does not object to implementing the recommendations in III-3 as long as it 

does not impact implementation of the other approved recommendations. The staff should 

develop and implement process improvements that are within the staff’s authority, as 

appropriate. If something is crosscutting or has an agency-wide impact, the staff should seek 

the Commission's review and approval in those cases. The staff should develop clear success 

criteria for these recommendations so that involved stakeholders can effectively support 

implementation and the agency can adequately measure whether the recommendation 

achieved its desired outcome. In all cases, the staff should keep the Commission informed of 

planned improvements, of successes, and of challenges encountered along the way. 

cc: Chairman Burns 

 Commissioner Svinicki 

 Commissioner Ostendorff 

 Commissioner Baran 

 OGC 

 CFO 

 OCA 

 OPA 

 Office Directors, Regions, ACRS, ASLBP (via E-Mail) 

 PDR