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                    U.S. DEPARTMENT OF ENERGY
                   OFFICE OF INSPECTOR GENERAL
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                     REPORT ON INSPECTION OF
                                
       ALLEGED DESIGN AND CONSTRUCTION DEFICIENCIES IN THE
                                
            NUCLEAR MATERIALS STORAGE FACILITY AT THE
                                
                 LOS ALAMOS NATIONAL LABORATORY
                                
 
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
Report No.  :    INS-O-97-01
Office of Inspections
Date Issued:     January 16, 1997
Washington, D.C. 20585
 
 
 
 
          INSPECTION OF ALLEGED DESIGN AND CONSTRUCTION
     DEFICIENCIES IN THE NUCLEAR MATERIALS STORAGE FACILITY
              AT THE LOS ALAMOS NATIONAL LABORATORY
                                
                                
                        TABLE OF CONTENTS
                                
                                
                                
                                
                              Page
                                
I.   INTRODUCTION AND PURPOSE..............................    1
 
II.  SCOPE AND METHODOLOGY.................................    1
 
III. SUMMARY RESULTS OF INSPECTION.........................    2
 
IV.  BACKGROUND............................................    2
 
V.   RESULTS OF INSPECTION.................................    3
 
VI.  CONCLUSIONS AND RECOMMENDATIONS.......................    9
 
VII. MANAGEMENT COMMENTS...................................    10
                                        
 
 
 
                    U.S. DEPARTMENT OF ENERGY
                    OFFICE OF INSPECTOR GENERAL
                      OFFICE OF INSPECTIONS
                                
                                
          INSPECTION OF ALLEGED DESIGN AND CONSTRUCTION
     DEFICIENCIES IN THE NUCLEAR MATERIALS STORAGE FACILITY
              AT THE LOS ALAMOS NATIONAL LABORATORY
                                
 
I.  INTRODUCTION AND PURPOSE
 
On June 8, 1994, the Office of Inspections, Office of Inspector
General (OIG), Department of Energy (DOE), received a letter
dated May 31, 1994, from a complainant concerning the Nuclear
Materials Storage Facility (NMSF) at the Los Alamos National
Laboratory.  The complainant alleged that the NMSF, completed in
1987, was so poorly designed and constructed that it was never
usable and that DOE proposed to gut the entire facility and
sandblast the walls.  According to the complainant, "these errors
are so gross as to constitute professional malpractice in a
commercial design setting."  The complainant further stated that
"DOE proposes to renovate this facility to store large amounts of
plutonium (as much as 30 metric tons, by some accounts), and it
is imperative that the public receive some assurance that this
waste will not recur and that the facility will be made safe."
 
The purpose of our inspection was to determine if the allegations
regarding the design and construction of the NMSF were accurate,
and if so, to determine if the Government could recover damages
from the Architect/Engineer and/or the construction contractor.
We also reviewed the Department's proposed actions to renovate
the NMSF.
 
 
II.  SCOPE AND METHODOLOGY
 
In conducting the inspection, we interviewed appropriate DOE and
contractor officials and reviewed pertinent documentation.  We
also reviewed renovation plans for the NMSF project and visually
inspected the existing facility.  The field work portion of the
inspection was conducted at the Albuquerque Operations Office
(AL) and included a site visit to the Los Alamos National
Laboratory (LANL).
 
This inspection was conducted in accordance with the Quality
Standards for Inspections issued by the President's Council on
Integrity and Efficiency.
 
 
III.  SUMMARY RESULTS OF INSPECTION
 
We concluded that the complainant's allegations concerning the
design and construction of the NMSF were accurate.  We learned
that deficiencies in the facility were so serious that they
rendered the facility unusable for its intended purpose.  We
found that AL officials were planning extensive renovations to
bring the facility into compliance with current Departmental
environmental, safety, and security standards.  However, we also
found that deficiencies identified by the complainant were
similar to deficiencies already identified by the Department and
the contractor.
 
We also do not believe there is sufficient basis for the
Government to recover damages from any of the contractors on the
project.  A Root Cause Analysis Report, prepared by the DOE Los
Alamos Area Office (LAAO), stated that Departmental officials and
the Management and Operating (M&O) contractor were responsible
for inadequate design requirements for the facility.  The report
also stated that there was inadequate management on the part of
DOE, LANL, the Construction Manager, the Architect/ Engineer
(A/E) and the construction contractor.  As a result, AL officials
concluded that there was no basis for recovering damages from the
A/E or the construction contractor.
 
At the time of our inspection, we found that AL's planning for
the NMSF Renovation Project to correct deficiencies in the
existing facility was in progress.  The project's objective is to
provide a complete and usable facility that can be operated
safely.  However, we believe that additional actions should be
taken to ensure that the facility is successfully renovated.
 
We made several recommendations for corrective actions that we
believe should be taken by management to ensure the facility is
successfully renovated.  Management  generally concurred with our
recommendations.
 
 
IV.  BACKGROUND
 
The NMSF was a DOE Office of Defense Programs (DP) FY 1984
Research, Development, and Testing project that had never become
operational.  The primary purpose of the NMSF was to provide mid
to long term storage of LANL's nuclear materials using state-of-
the-art nuclear material accountability techniques while
mitigating potential environmental, safety, and health
(criticality/exposure) impacts.  The facility was intended to
provide a consolidated repository for special nuclear material.
 
The total estimated cost of construction was $19.3 million.  The
NMSF was planned to be a 30,000 square feet storage facility
intended to meet applicable Federal and Departmental security,
safety, fire protection, environmental, safeguards, and
operational requirements.  The facility was designed with the
following four major operating areas:  (1) a material access area
(MAA);  (2) a safe secure trailer (SST) garage and dock;  (3) a
material transfer tunnel to the Plutonium Processing Facility (PF-
4);  and (4) an administration area.  The MAA included a nuclear
material storage vault and other storage locations, a non-
destructive assay area, a packaging/unpacking area, and a staging
area.  The administration area included a mechanical equipment
room, a security inspection station, offices, and change rooms.
The NMSF was located within Technical Area 55 (TA-55), which was
one of the security areas at LANL.
 
Department officials at LAAO managed and directed the design and
construction contracts for the NMSF.  LANL provided technical
support to the LAAO project manager under its M&O contract; and DOE
signed an agreement with another Federal agency to provide
construction management services for the project.
 
 
V.  RESULTS OF INSPECTION
 
A.  Original NMSF Construction Project
 
We found that the NMSF, which was originally completed in 1987, was
so poorly designed and constructed that it was never usable and
that DOE officials were proposing to renovate the entire facility.
Departmental and contractor officials discovered numerous design,
construction and operational deficiencies after the facility was
occupied in February 1987.  These deficiencies included:  (1) the
inability to control and balance the heating, ventilation and air
conditioning (HVAC) system to maintain acceptable negative
pressures within the facility;  (2) the inability to dissipate the
heat generated by radioactive decay of the materials to be stored;
(3) the inability to limit personnel radiation exposures to "as low
as reasonably achievable;"  (4) a peeling of the "Placite"
decontamination epoxy coating throughout the facility;  and (5) the
inability to open and secure the Safe Secure Trailer (SST) doors
due to the inadequate width of the garage once the SSTs were parked
in the garage.
 
We determined that deficiencies alleged by the complainant were
similar to deficiencies discussed above, which had been identified
by the Department and the contractor.  The complainant alleged
that: (1) the garage for the plutonium transporter was too narrow
to allow the transporter's doors to be opened and secured;  (2)
plutonium had to be carried through the office area after it was
removed from its shipping container; (3) radiation shielding was
not installed as required; (4) special paint designed to
facilitate decontamination was improperly installed and was peeling
throughout the facility; (5) ventilation ducts receiving air from 
the plutonium storage area were improperly located in the office 
area; (6) thedecontamination shower and sink were improperly located 
within the facility;  and (7) two natural-gas fired boilers were 
located in the facility (a fire/explosive hazard).
 
We confirmed the existence of these deficiencies through our visual
inspection of the NMSF on July 26, 1994, and a review of the
following documents:
 
     o  "The Renovation Report for the Nuclear Materials Storage
         Facility, Los Alamos National Laboratory," issued
         by the NMSF Task Group on June 22, 1992.
     
     o   Briefing Charts, "Nuclear Materials Storage Facility
         Renovation," "HQ KD#O Presentation," dated June 1993,
         prepared for a briefing for the DP Principal Deputy
         Assistant Secretary for Facilities.
     
     o  "The Draft 100% Conceptual Design Report, NMSF Renovation,"
         issued by Merrick Engineers & Architects on January 24,
         1994.  (The Final Conceptual Design Review document was
         scheduled to be completed in May/June 1995.)
     
     o  "The Capital Assets Management Process (CAMP) Report for FY
         1996."
     
     o  "Report of the Root Cause Analysis and Corrective Actions
         for the NMSF," issued by DOE LAAO and LANL on April 12,
         1993.
     
     o  "NMSF Legal Review, Technical Evaluation," dated March 16,
         1993, and Legal Opinion issued by LAAO's Counsel on April 5,
         1993, which provides a legal review for contractor
         liability.
 
According to the opinion of LAAO's legal counsel, there was no
basis for claims against the A/E and construction contractor,
because the primary cause for NMSF problems was due to inadequate
design criteria, poor coordination among participants, and a need
for better project and construction management.
 
B.  Causes of NMSF Deficiencies
 
In March 1992, AL's Manager directed the formation of a Task Group
to investigate and evaluate renovation options that were available
to make the NMSF operational.  The Task Group was also requested to
review requirements contained in the National Environmental Policy
Act and Safety Analysis Report to determine if any design changes
were needed in the renovation project.  The Task Group's findings
were incorporated in their report titled, "Renovation Report for
the Nuclear Materials Storage Facility, Los Alamos National
Laboratory," which was issued on June 22, 1992.  The Task Group
provided a lessons learned section in the report which stated:
 
           "The leading cause of the deficiencies was the lack 
           of a  well defined technical baseline at the beginning 
           of the design phase.  The Conceptual Design Report (CDR) 
           and the Design Criteria were very generic, thus specific
           user design requirements were not identified early in 
           the design stages.  There was also a minimal amount of 
           quality assurance involved with the design even though 
           a QA system was in place.  Several issues raised during 
           the design phase do not appear to have been fully resolved.  
           Among these issues are the decay heat load, the location 
           of the HEPA filters, operation of the ventilation system, 
           shielding of the vault area, and the placement of the 
           "Placite" decontamination coating. Communications between 
           the DOE, LANL, A/E and the Construction Manager appear 
           to have been limited."
 
The report also stated:
 
          "One lesson learned from this project is that
           construction of nuclear facilities must be closely
           monitored by the DOE and the Management and Operating
           (M&O) Contractor.  Another lesson learned is that the
           technical baseline must be complete and reviewed by 
           all DOE and M&O organizations involved with the project.  
           Methods for communicating and resolving problems were 
           not fully developed, or utilized, and consequently several
           issues were not fully and satisfactorily resolved."
 
Specific causes of the storage facility's design and construction
problems are identified in LAAO's "Report of the Root Cause
Analysis and Corrective Actions for the NMSF," dated April 12,
1993.  They are as follows:
 
     "I.  Los Alamos National Laboratory
 
          "A.  LANL did not adequately develop a technical 
               baseline for the facility.
 
          "B.  LANL organizations did not cooperate during 
               the design and construction of the
               facility because of a lack of accountability.
     
          "C.  The LANL Construction Project Manager did not 
               adequately use the expertise of Laboratory 
               nuclear facility experts.
            
          "D.  LANL did not incorporate Design Review comments into
               design documents.
 
     "II.  Department of Energy
 
           "A.  DOE Project Management Branch Chief did not 
                adequately manage the project.
 
     "III.  Architect/Engineer
 
            "A.  The Architect/Engineer did not provide an 
                 acceptable Quality Assurance Program in a 
                 timely manner.
     
            "B.  The Architect/Engineer did not adequately program 
                 and determine the design needs of the facility.
     
      "IV.  Construction Management
 
            "A.  The [Construction Manager] did not adequately manage 
                 the construction contractor.
     
            "B.  The [Construction Manager] did not consider the 
                 needs of the customer."
 
C.  The Proposed NMSF Renovation Project
 
At the time of our inspection, we found that actions were being
taken to address the deficiencies in the NMSF.  For example,
project planning and conceptual design work was progressing for the
NMSF renovation project.  Also, an initial management team had been
formed with a project manager, program liaison representative and
user liaison representative identified as critical personnel.
Further, the draft design criteria and a draft 100 percent
Conceptual Design Report had been developed and coordinated to
correct deficiencies plaguing the original building.  In a "Status
Project Review" document issued on July 19, 1994, it was stated
that the latest safety, security, environmental and energy
conservation orders would be implemented in the renovation of the
facility.  A Fiscal Year 1996 construction project with a current
working estimate of $34.5 million had also been developed and was
planned for validation.
 
D.  Proposed Actions to Improve Project Management
 
We reviewed current and future plans for managing the renovation
project, and determined that there may be additional areas where
further risk reduction in the planned renovation project could be
initiated.  For example, we believe:
 
     1.  AL's Manager should confirm that:  (a) laboratory
     personnel assigned to the project are the best available; and
     (b) they are allocated in the best possible way to ensure
     project success since there is an urgent need, according to
     LANL program managers, for the storage of nuclear materials by
     the late 1990s.  We believe that, if this project is to be
     successful, it must be managed in an exemplary manner with the
     most highly qualified personnel LANL has to offer, since many
     of the problems associated with the original construction were
     due, in part, to errors by technical personnel.  We did,
     however, note at the time of our on-site inspection in July
     1994,  that several members of a more capable management team
     had been selected for positions on the renovation project
     (i.e., project management, program liaison and user liaison).
     
     2.  It may be beneficial to certify contractor project
     managers in addition to DOE project managers.  However,
     recognizing the current budget reductions in training and
     travel, we believe that an alternative would be to identify
     such personnel as "Key Personnel" in M&O contracts.
     
     A Secretary of Energy memorandum to the Office of Procurement
     Assistance and Program Management, dated May 23, 1991,
     described the Financial and Project Management Improvement
     Program, which was designed to establish a sound business
     management culture and proactively resolve financial and
     project management problems.  The fourth initiative of the
     program tasked the Director, Office of Procurement Assistance
     and Program Management, to "Improve the Department's training
     courses for [Departmental] project managers and add a
     certification program so that all project managers are
     qualified at an identifiable skill level."  We learned that
     DOE Order 4700.4, "Project Manager Certification," dated
     January 27, 1993, implemented such a program for DOE project
     managers.  We also noted that a similar certification program
     for DOE contractor project managers is not required by the
     Department or DOE Order 4700.4.  From our review of project-
     related documents, we learned that the original project's
     difficulties were largely due to inadequate Federal and
     contractor project management and technical support.
     
     3.  Departmental officials should ensure that an effective
     Quality Assurance and Quality Control Program is planned and
     implemented for the NMSF renovation project in accordance with
     Departmental requirements.   Although a legal review by LAAO
     of the previous A/E's work (related to the NMSF) did not
     establish a legal basis for claims against the A/E, there were
     several "serious" concerns noted in various project documents
     we reviewed.  For example, the A/E did not provide an
     acceptable Quality Assurance Program in a timely manner.  This
     was indicated in comments provided by LANL quality assurance
     officials on the A/E's Quality Assurance Program in June 1984
     and September 1984.  Also, the deficiency had not been
     satisfactorily resolved as of April 30, 1985.  Another example
     concerns a Quality Assurance Surveillance Report, issued on
     May 28, 1985, which highlighted items with corrective actions
     (required under the terms of the A/E contract) that were long
     overdue.  In addition to these examples, we learned that:  (a)
     LANL officials had not performed quality assurance audits that
     should have been performed on the A/E, and (b) the Quality
     Assurance Program was never fully implemented or approved.  As
     a result, many of the facility's deficiencies, which we
     identified above, surfaced during the construction phase and
     prevented the NMSF from becoming operational.
 
     DOE Order 5700.6C, "Quality Assurance," dated August 21, 1991,
     and ALms implementing order, ASME NQA-1, "Quality Assurance
     Program Requirements for Nuclear Facilities,"require that an
     independent and aggressive Quality Assurance and Quality Control 
     Program be planned and implemented during all phases of the 
     design and construction efforts of a project.  LANL officials 
     advised us that the A/E contractor will be contractually required 
     to provide a Quality Assurance Plan on schedule or a portion of 
     the A/E's contract funds will be withheld.
  
     4.  Contract language is needed in the future A/E contract for
     the renovation project that will provide increased accountability 
     and liability for the A/E and reduce the Government's risk of 
     loss due to A/E design errors or other deficiencies.  According 
     to LAAO's "Report of the Root Cause Analysis and Corrective 
     Actions for the Nuclear Materials Storage Facility," issued on
     April 12, 1993, the A/E did not adequately program and determine 
     the design needs of the facility.  For example, the report cites:
      
           o  improper setup of an operations room;
      
           o  improper placement of the HEPA filters for
              maintenance;
      
           o  improper installation of an HVAC system so that
              proper manual/operator intervention was not possible;
      
           o  improper routing of material through office
              areas; and
      
           o  improper radiation protection in the area of the
              Stacker/Retriever.
      
     5.  Clarification is needed of DOE policy in the Department's
     Acquisition Regulation (DEAR) and DOE Order 4700.1, "Project 
     Management System," regarding the liability of A/Es for design 
     errors and deficiencies.  Federal Acquisition Regulation (FAR) 
     36.609-2(b) states that:  "The contracting officer
     shall insert FAR Clause 52.236-23, Responsibility of the
     Architect-Engineer Contractor, in fixed-price architect-
     engineer contracts."  The FAR does not state whether this
     clause should or should not be included in cost-type A/E
     contracts.  We determined that DEAR 970.7104-28 is ambiguous
     concerning application of the FAR clause for cost-type or
     fixed-price A/E contracts.  We also determined that DOE Order
     4700.1 does not appear to provide policy or procedures for
     holding A/Es accountable and liable for design errors and
     deficiencies.
      
     6.  A full-time highly qualified construction management team
     is needed,instead of an individual consultant, to perform such 
     vital functions as:  design reviews relative to constructability;
     monitoring and inspecting for conformance to design requirements;  
     the formulation of current cost and progress as the work proceeds; 
     the preparation of Government cost estimates;  and the LANL 
     construction-related services.  We also believe that the 
     construction management firm should have a proven record for 
     successfully accomplishing projects similar to the NMSF.  We 
     learned that construction management for the existing NMSF was 
     provided by another Federal organization.  We also learned that 
     this organization apparently had little successful nuclear 
     construction experience within DOE.  For example, the 
     organization had difficulties with construction management 
     of the Device Assembly Facility at the Nevada Test Site as cited 
     in our May 1992 report, DOE/IG-0310, "General Management 
     Inspection, Department of Energyms Nevada Field Office."  
     We also notedthat existing problems, associated with the NMSF, 
     were primarily due to poor design criteria and inadequate
     construction and project management.
     
At the time of our field visit, a LANL project manager stated that
a non-Federal consultant would be hired to perform construction 
management services for the NMSF renovation project.  We were also 
told, by a LANL project manager, that Title III inspectors from LANL 
would be used on a part-time basis.
 
 
VI.  CONCLUSIONS AND RECOMMENDATIONS
 
We concluded that the complainant's allegations concerning the
design and construction of the NMSF were accurate.  Deficiencies 
in the facility were so serious that they rendered the facility 
unusable for its intended purpose. We found that AL officials were 
planning extensive renovations to bring the facility into compliance
with current Departmental environmental, safety, and security
standards.  However, we also found that deficiencies identified by 
the complainant were similar to deficiencies already identified by 
the Department and the contractor.
 
We also do not believe there is sufficient basis for the Government
to recover damages from any of the contractors on the project.  A 
Root Cause Analysis Report, prepared by LAAO, stated that Departmental 
officials and the M&O contractor were responsible for inadequate 
design requirements for the facility.  The report also stated that 
there was inadequate construction management on the part
of the Department and its contractors.  As a result, AL officials
concluded that there was no basis for recovering damages from the 
A/E and construction contractor.
 
At the time of our inspection, we found that AL's planning for the
NMSF Renovation Project to correct deficiencies in the existing 
facility was in progress.  The project's objective is to provide a 
complete and usable facility that can be operated safely.  However, 
we believe that additional actions should be taken to ensure that 
the facility is successfully renovated.
 
Therefore, we recommend that the Manager, Albuquerque Operations
Office:
 
     1.  Verify that the project manager, program liaison
     representative, and user liaison representative are qualified
     at a level which will help to ensure successful renovation of
     the Nuclear Material Storage Facility.
     
     2.  Consider incorporating in the Title I and Title II A/E
     contracts for the renovation of the NMSF, the Federal
     Acquisition Regulation Clause 52.236-23, "Responsibility of
     the Architect-Engineer Contractor," or one similar to it, to
     ensure the A/E is held financially responsible for design
     errors and omissions.
     
     3.  Ensure that an independent, aggressive, and effective
     Quality Assurance and Quality Control Program is developed and
     implemented for the duration of the design and construction of
     the NMSF Renovation Project, as required by DOE Order 5700.6C.
     This program should be supplemented by project specific
     quality assurance oversight for the renovation project.
     
     4.  Ensure that the construction management organization hired
     to manage the NMSF Renovation Project has the necessary
     resources to manage the project and a proven record for
     successfully accomplishing projects similar to the NMSF.
 
We also recommend that the Director, Office of Infrastructure
Acquisition Services:
 
     5.  As a minimum, have contractor project managers performing
     design and construction work be identified as "Key Personnel"
     in M&O contracts or formulate a certification program for such
     personnel.
 
[Note:  Subsequent to the issuance of our initial draft report, the
Office of Infrastructure Acquisition Services was renamed as the
Office of Project and Fixed Asset Management.]
 
Further, we recommend that the Deputy Assistant Secretary for
Procurement and Assistance Management, in coordination with the
Director, Office of Infrastructure Acquisition Services:
     
     6.  Review the use of appropriate language regarding the
     liability of A/Es for design errors and deficiencies in cost-
     type architect/engineer contracts and provide
     clarification/guidance to contracting officers and project
     managers, as necessary.
 
 
VII.  MANAGEMENT COMMENTS
 
By memorandum dated September 22, 1995, the Director, Project and
Facilities Management Division, Albuquerque Operations Office,
provided comments on our draft report.  He concurred with
Recommendations 1 through 4 and provided the following comments.
 
With respect to Recommendation 1, the Director stated that:
 
     "LANL will review the qualifications of candidates and submit
     recommendations and supporting documentation to DOE.  A DOE
     panelconsisting of representatives from PMD, WQD and LAAO will
     review recommendations and provide comments and concurrence or
     nonconcurrence with LANL recommended personnel.  If DOE
     nonconcurs, LANL will have to provide supplementary information 
     to support the original proposed personnel or recommend new 
     personnel.
     
     "Following DOE concurrence of key LANL personnel, these
     individuals will be identified in the Project Management Plan.
     Any changes will have to be formally documented using the 
     same process used for selection of the original personnel.
     
     "The DOE project manager will be appointed by the Manager, AL,
     in accordance with the requirements of DOE Order 4700.4, Project
     Manager Certification."
     
We consider management's actions to be responsive; therefore,
Recommendation 1 may be closed.
 
With respect to Recommendation 2, the Director stated that AL's
Contracts and Procurement Division verified that FAR Clause 52.236-
23 is included in the General Provisions section of the standard 
boilerplate for all A/E contracts at the Los Alamos National 
Laboratory.
 
We believe Recommendation 2 should remain open until the A/E
contract for the renovation of the NMSF is signed and the OIG is
provided a copy of the contract containing the FAR clause.
 
With respect to Recommendation 3, the Director stated:
 
     ". . . Based on direction from DOE/LAAO, LANL is presently
     developing and implementing an aggressive overall Quality
     Program.  This program will serve as a model for implementa-
     tion on a graded approach.  LANL Facilities, Safeguards and 
     Security Division is also developing a Quality Program to be 
     applied to all projects, including the NMSF project.  The 
     basis for the program is 10 CFR 830.120, and DOE Order 5700.6C.  
     An overview of the Quality Program's approach and philosophy 
     was briefed to the  Defense Nuclear Facilities Safety Board 
     with favorable response.
     
     "Additional activities in this area include the formation of 
     a Technical Review Team by the Weapons Quality Division, AL.  
     This team is chartered to perform independent technical over-
     sight and review of the project during the Conceptual Design 
     stage, and their charter may be extended through Title I and 
     Title II Design.  The function of external peer review has 
     been built into the project since initiation of Conceptual 
     Design efforts.  A separate external Peer Review was conducted 
     on the draft CDR in April 1994.
     
     "Finally, the overall Quality Program developed and
     implemented for the NMSF Renovation project will be
     consistent, integrated, and complimentary to the existing
     programs in place at TA-55.  The Quality Program will also be
     defined in, and implemented through, the Project Management
     Plan."
 
We consider management's actions to be responsive; therefore,
Recommendation 3 may be closed.
 
With respect to Recommendation 4, the Director stated:
 
     "LANL will function as the construction manager for the NMSF
     project and as such, will ensure that necessary resources are
     available to manage the project.  In addition, a Project
     Oversight Committee will be appointed to ensure successful
     accomplishment of the NMSF project goals for a complete usable
     facility.
  
     "The Project Oversight Committee will regularly review the
     overall status, progress and direction of the NMSF project.
     Membership of this Steering Committee may include the:
     
          Director, Project Management Division, AL
          Director, Weapons Quality Division, AL
          Area Manager, LAAO
          DP/HQ Defense Programs/Project Representatives
          Director, Nuclear Materials and Reconfiguration
          Technologies, LANL
          Director, Facilities, Safeguards and Security Division,
          LANL.
  
     "On December 20, 1994, an Independent Technical Review
     Committee that was established by AL's WQD, met to review the
     complete development of the CDR and the overall systems and
     programs that are in place to ensure successful accomplishment
     of project objectives.  A final report was prepared and issued
     in June 1995."
 
We consider management's actions to be responsive; therefore,
Recommendation 4 may be closed.
  
By memorandum dated November 28, 1995, the Director, Office of
Infrastructure Acquisition Services, provided comments on our
draft report.  He concurred with Recommendation 5 and stated:
 
       ". . . it is important to recognize that our preference is
       to ensure that key personnel on managing [sic] and operating 
       contracts are identified and fully qualified project managers 
       rather than implement a costly contractor project manager 
       certification program."
       
Also, by memorandum dated January 18, 1995, the Director, Office
of Procurement Assistance and Property, provided comments on our
draft report.  He stated regarding Recommendation 5 that:
 
       "Procurement would be pleased to work with the Office of
       Infrastructure Acquisition Services regarding a contractor 
       certification program to ensure such requirements are 
       reflected in contracts as appropriate."
       
We believe Recommendation 5 should remain open until a contractor
certification program has been established or a policy change 
initiated to have contractor project managers identified as 
"Key Personnel" in the M&O contracts.
 
In an October 31, 1995, meeting with Office of Inspections
officials, the Director, Office of Procurement Assistance and 
Property, provided verbal concurrence with Recommendation 6.  
He also stated that:
 
       "We will be meeting with representatives from the Office of
       the Deputy Assistant Secretary for Procurement and Assistance
       Management to determine the necessary details to clarify to 
       contracting officers the architect/engineer contractors general
       responsibilities for design errors/deficiencies to address your 
       Recommendation 6."
 
We believe Recommendation 6 should remain open until guidance
regarding A/E contractors' responsibilities has been issued.
 
 
 
IG Report No.  INS-O-97-01
                                
                     CUSTOMER RESPONSE FORM
                                
                                
The Office of Inspector General has a continuing interest in
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     to assist management in implementing corrective
     actions?
 
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     General have taken on the issues discussed in this
     report which would have been helpful?
 
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          Department of Energy
          Washington, D.C. 20585
 
          ATTN: Customer Relations
 
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