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21–634PDF 2005

A REVIEW OF ONGOING MANAGEMENT CONCERNS

AT LOS ALAMOS NATIONAL LABORATORY

HEARING

BEFORE THE

SUBCOMMITTEE ON 

OVERSIGHT AND INVESTIGATIONS

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MAY 5, 2005

Serial No. 109–45

Printed for the use of the Committee on Energy and Commerce

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON ENERGY AND COMMERCE

JOE BARTON, Texas, Chairman 

RALPH M. HALL, Texas 

MICHAEL BILIRAKIS, Florida 

Vice Chairman 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

PAUL E. GILLMOR, Ohio 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi, Vice Chairman 

VITO FOSSELLA, New York 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

CHARLES F. BASS, New Hampshire 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

C.L. ‘‘BUTCH’’ OTTER, Idaho 

SUE MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOHN D. DINGELL, Michigan 

Ranking Member 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, Jr., New Jersey 

SHERROD BROWN, Ohio 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

BUD ALBRIGHT, Staff Director 

DAVID CAVICKE, Deputy Staff Director and General Counsel 

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

ED WHITFIELD, Kentucky, Chairman 

CLIFF STEARNS, Florida 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

CHARLES F. BASS, New Hampshire 

GREG WALDEN, Oregon 

MIKE FERGUSON, New Jersey 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOE BARTON, Texas, 

(Ex Officio) 

BART STUPAK, Michigan 

Ranking Member 

DIANA DEGETTE, Colorado 

JAN SCHAKOWSKY, Illinois 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

HENRY A. WAXMAN, California 

JOHN D. DINGELL, Michigan, 

(Ex Officio) 

(II) 

C O N T E N T S 

Page

Testimony of: 

Eggenberger, A.J., Acting Chairman, Defense Nuclear Facilities Safety 

Board .............................................................................................................. 18

Friedman, Gregory H., Inspector General, Department of Energy .............. 13

Kilpatrick, Michael, Director of Independent Oversight, Office of Security 

and Safety Performance Assurance, Department of Energy ..................... 23

Paul, Jerry, Principal Deputy Administrator, National Nuclear Security 

Administration, accompanied by Edwin Wilmot, Manager, Los Alamos 

Site Office, National Nuclear Security Administration ............................. 7

(III) 

(1)

A REVIEW OF ONGOING MANAGEMENT CONCERNS AT LOS ALAMOS NATIONAL LABORATORY 

THURSDAY, MAY 5, 2005

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:12 p.m., in room 

2322, Rayburn House Office Building, Hon. Ed Whitfield (chairman) presiding. 

Members present: Representatives Whitfield, Walden, Burgess, 

Stupak, DeGette and Inslee. 

Staff present: Mark Paoletta, chief counsel; Thomas Feddo, majority counsel; Chad Grant, staff assistant; Dwight Cates, majority 

professional staff member; Chris Knauer, minority investigator; 

Edith Holleman, minority counsel; and Turney Hall, minority staff 

assistant. 

Mr. WHITFIELD. At this time, I will formally call the meeting to 

order. 

Today’s subject of this hearing is A Review of Ongoing Management Concerns At Los Alamos National Laboratory. I will begin 

with an opening statement, and then we will do the opening statements, and then we will be introducing the panel. We only have 

one panel today. Originally we had two, but we combined them into 

one. 

I am going to submit my entire opening statement for the record, 

but I just want to briefly touch on a few points. 

First of all, we had the shutdown of Los Alamos back in July 

2004 because of the classified removable electronic material issue. 

In addition to that, we had the injury to the intern because of a 

laser mishap. We have had several plutonium exposures, the most 

recent one back in March. We have had contract mismanagement. 

We have had the security—the TA-18 issue about moving the material out of Los Alamos out to Nevada. Bill Richardson was the Secretary of Energy at the time that commitment was first made, and 

we still have not made much progress on that. We have had research program delay as a result of the shutdown. We have had a 

culture of noncompliance at Los Alamos for some time. 

And I would just like to make the comment that, even though it 

is the first time this has occurred, I am delighted that the Department of Energy is issuing a new RFP for the management of this 

2

facility, because it is quite apparent that there are significant 

issues with the management at Los Alamos. 

I am really looking forward to the testimony today. We will be 

having another hearing after this one in which the University of 

California will be testifying as well as some whistle-blowers. But 

I do want to thank you for being here, and I would once again say 

I am sorry for the brief delay that we had because of the votes on 

the floor. 

[The prepared statement of Hon. Ed Whitfield follows:]

PREPARED STATEMENT OF HON. ED WHITFIELD, CHAIRMAN, SUBCOMMITTEE ON

OVERSIGHT AND INVESTIGATIONS

This hearing will come to order. Today the Subcommittee will review ongoing 

management concerns at the Los Alamos National Laboratory. Over the years, this 

Subcommittee has held numerous hearings to review safety, security, and procurement management problems at Los Alamos. In 2003, we held three hearings to review major procurement fraud and incidents of outright theft of government property at the Laboratory. These serious problems, like so many other problems at Los 

Alamos, were discovered by hard-working and honest employees at the lab who later 

suffered acts of retaliation from managers that did not want the truth to see the 

light of day. 

At another Subcommittee hearing in May of 2000, Mr. Joe Gutierrez, an employee 

in the audits division at Los Alamos, testified regarding acts of retaliation he suffered for revealing that the Lab was not in compliance with the Clean Air Act. The 

Department of Labor determined his whistleblower claims were real, and this decision was upheld numerous times, in spite of several appeals from the team of defense lawyers hired by the University of California. 

Over the years, the Subcommittee has struggled to understand the apparent culture of disregard for rules and procedures at Los Alamos. Just last month, Los Alamos Director Pete Nanos testified at our nuclear facility security hearing regarding 

his decision to shut down the Laboratory after several safety and security incidents 

in the Summer of 2004. In his testimony, Director Nanos referred to ‘‘clear signs 

of a behavioral problem’’ among some employees at the laboratory who demonstrated a ‘‘disregard for basic safety and security rules.’’

If you review our extensive hearing record on Los Alamos, you will find numerous 

examples that support this conclusion. At today’s hearing, we will review several additional findings that demonstrate a similar disregard for the rules, for instance:

• A February 2005 report from DOE Inspector General Gregory Friedman—who 

will testify on our first panel—found that DOE will not meet its commitments 

for removing transuranic wastes from Los Alamos because the laboratory ‘‘had 

not consistently followed approved waste processing procedures.’’ • Another February 2005 audit report of the DOE Inspector General found that 

‘‘LANL out-processing procedures were not followed by 40 percent of the 305 

employees included in our sample.’’ Thus, there were no assurances that security badges for these employees were turned in, or that classified documents in 

the possession of these employees were accounted for after they left. • And just a few weeks ago last March, several employees were exposed to plutonium while working in a confined tank vault. According to an investigation report, these workers were unnecessarily exposed to plutonium because safety 

technicians failed to analyze the radiation hazard, and failed to implement controls for the hazards they did identify. 

In spite of these recent problems, I do believe that Director Nanos has finally gotten the attention of every employee at Los Alamos. During the six-month standdown, the lab conducted a valuable self-assessment that identified almost 4,000 

issues that need to be corrected. The purpose of this hearing is to determine whether the University of California can finally tackle the problems identified in the selfassessment, and turn the tide on the culture of mismanagement at Los Alamos. 

However, I am concerned that the laboratory may not maintain the momentum 

necessary to implement the corrective actions that were just developed. An even 

greater risk is that whistleblowers that continue to identify problems at the lab will 

continue to be retaliated against for their efforts to correct the culture of mismanagement. 

I look forward to the testimony from today’s witnesses. I plan to hold a second 

hearing on these matters in the near future to get the views of the University of 

California as well as several whistleblowers from the laboratory.

3

Mr. WHITFIELD. At this time, I would recognize the ranking 

member, Mr. Stupak of Michigan, for his opening statement. 

Mr. STUPAK. Thank you, Mr. Chairman. 

Last summer, after decades of internal and external reports, congressional investigations and hearings, volumes of recommendations for changing the culture and corrective action plans that were 

often not implemented, the director of Los Alamos National Laboratory shut the lab down due to a massive review and upgrade of 

safety, security and other processes at the lab. The final straw 

leading to the shutdown was a laboratory accident in July involving improper use of a laser beam which permanently injured the 

eye of a graduate student working at the laboratory. 

Some of us on this committee which has been overseeing the lab 

for more than 2 decades said it was about time. But this action was 

extremely controversial within the laboratory community. 

A group of scientists started a blog in which they rallied against 

Pete Nanos, the current director, for destroying the laboratory and 

complained about retaliation. The blog culminated in a petition in 

February, which I have placed in the record, demanding the removal of Mr. Nanos by the University of California. Some of the 

more thoughtful comments, however, pointed out that the longterm problems at the laboratory are both poor management and 

bad science and the lab’s long history of retaliating against anyone 

who pointed out problems. The blog—this one e-mail said: Try to 

remember, one person wrote, Nanos is not the problem. He is our 

punishment. End of quote. 

On January 31, the laboratory reopened. Many problems were 

identified, and more corrective action plans were written. 

On March 4, 2005, an Operational Efficiency Project execution 

plan identified eight major problems which needed to be addressed: 

safety, quality assurance, software quality assurance, conduct of 

engineering, safety basis, operations, environmental risk management, and training. 

The question now is, has anything changed? Based on a radiation 

exposure incident that happened in March of this year, I am skeptical. Let me describe it. 

In 2003, Don Brown, a contract employee at Los Alamos hired to 

find gaps in the quality control program at Los Alamos, found that 

there was no tank inspection or preventive maintenance program 

at Los Alamos. In fact, it had been dismantled years before under 

a, ‘‘we will fix it when it breaks,’’ management approach. Brown described this approach as fraught with danger. 

On March 3, 2005, his prediction came true. Contractors were repairing a leak in one of these tanks that had finally broken. The 

tank, which is 23 years old, held corrosive and radioactive liquid 

waste from TA-55. A weld had given way, and at least 300 gallons 

had leaked out in 2003 before the tank was emptied. While scraping out and bagging paint chips and debris, three workers were exposed to plutonium 239. 

Why did this happen? The report is in the record, Mr. Chairman, 

but let me highlight the findings. It is a litany of unacceptable 

practices. 

First, radiological hazards inside the tank were estimated prior 

to beginning the work, not reviewed by appropriate health physics 

4

personnel or confirmed by actual measurements. The removal of 

contaminated paint was not even specified in the work package. 

No. 2, the required continuous air monitor was not placed inside 

the tank while the work was ongoing but was outside. 

No. 3, managers did not require a conservative approach performing work in a largely uncharacterized environment. 

No. 4, workers were not skilled radiological workers and had insufficient training for working in a high contamination airborne environment. The radiation technician was not properly trained. 

Five, the radiation technician allowed the workers to take off 

their respirators, which were highly contaminated, and breathe in 

the contaminated air. He should have taken steps to remove the 

contamination first by wiping down the respirators. 

No. 6, ventilation was degraded during the work. 

No. 7, the leak itself was preventable if there had been a preventive maintenance plan. 

Eight, workers were in a vault, which is a confined space, which 

requires rescue equipment. Although the workers were equipped 

with a rescue harness, the harnesses were not attached to the line 

to remove them from a vault if necessary. 

It is really difficult to know what else could have gone wrong. 

Just after the incident, Los Alamos responded to Mr. Brown by 

saying that there was a tank inspection program in place but said 

the sufficiency of its implementation needed to be confirmed. However, the investigative report of the March incident recommended 

that a formal inspection and testing program be developed. 

Additionally, when our staff asked if the radiation technician has 

been retrained during the shutdown and safety procedures, they 

were told the radiation protection program was, ‘‘an essential program,’’ so it wasn’t part of the shutdown and there was no training. 

Is this the prescribed resumption process for essential activities 

that Mr. Paul describes in his testimony? 

Mr. Chairman, I remain skeptical as to whether the culture at 

Los Alamos will really change. Director Nanos may have made 

some mistakes, but if he leaves, as is widely rumored, who will 

pick up the mantle to institute these necessary changes? Because 

the culture at Los Alamos appears to be so poisoned at this point—

and this blog is just another example of this—it is unclear what 

can be done to truly fix this broken facility. Replacing the director 

and his top mates while allowing the status quo culture with the 

rest of the employees would only prolong the wasting of taxpayers’ 

money or, worse, jeopardize national security. 

Thank you, Mr. Chairman. 

Mr. WHITFIELD. Thank you. 

At this time, I will recognize the gentleman from Texas for his 

opening statement. 

Mr. BURGESS. Thank you, Mr. Chairman. 

In the interest of time, I will submit mine for the record so we 

can get to the witnesses. 

Mr. WHITFIELD. Okay. 

[The prepared statement of Hon. Michael C. Burgess follows:]

5

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TEXAS

Thank you Mr. Chairman, and thank you for holding this important hearing. 

This hearing resumes a continuation of the committee’s oversight regarding Los 

Alamos and other nuclear facilities. As I expressed in the last hearing, I am concerned about the troubling reports regarding Los Alamos’s safety and security procedures. This important national security matter deserves Congress’ full attention, 

and I support the Chairman’s investigation of this pressing issue. 

At this time in American history, our national security has become the most important issue facing our nation. It is critical that we do everything within our power 

to ensure that our nuclear weapons laboratories are highly secured and protected. 

We cannot allow our national security to be compromised because of inadequate 

safeguards. The recent security incidents at Los Alamos illustrate that changes 

must be made to guarantee not only the safety of weapons and top clearance material, but also the employees. 

Today, I look forward to the opportunity to further review the security status of 

Los Alamos. In the last hearing, I entered into a discussion with Director Nanos. 

While I appreciated his candor, I was greatly troubled by his account of a laser injury that occurred in the Los Alamos Laboratory. The egregious harm caused by the 

poor laboratory safety procedures at Los Alamos was extremely disturbing. I hope 

that today’s discussion will further focus on particular laboratory safety procedures 

that have been implemented to ensure that this type of incident will never occur 

again. 

Again, Mr. Chairman, I thank you for this crucial hearing in which we can address some of these essential concerns regarding nuclear facilities and the security 

of our nation.

Mr. WHITFIELD. At this time, I recognize the gentlelady from Colorado. 

Ms. DEGETTE. Thank you, Mr. Chairman. 

Mr. Chairman, I will submit my full statement for the record as 

well. I just want to make a couple of observations. 

The first one is that I completely associate myself with Mr. 

Stupak’s opening statement. We have seen problems at Los Alamos 

for years now. 

Last summer, Chairman Barton and I went out to the facility in 

Los Alamos and looked at the situation, talked to Mr. Nanos, 

talked to his senior staff. At that time he was relatively new in the 

job, and we were impressed that he was trying to finally change 

the culture at Los Alamos. Since last summer, we have seen problem after problem again, culminating in this blog that Mr. Stupak 

is talking about where people are complaining once again about the 

management. 

I agree with Mr. Stupak and I probably think this is a feeling 

held in a bipartisan way on this committee. The issues at Los Alamos, some of them are management, but there is a pervasive atmosphere there of not understanding what needs to happen to 

bring this facility up to the level it should be, not understanding 

why certain precautions or procedures are important, and generally 

an arrogance among many employees there. I don’t know how we 

break that. But I don’t think that changing management in and of 

itself, as we have done so many times before at Los Alamos, is 

going to do anything to solve the situation. 

So I commend you, Mr. Chairman, for having this hearing. I 

think I can speak for all of us when I say we are tired of having 

these hearings. We would like to see some things change at the facility. 

With that, I will yield back the balance of my time. 

6

Mr. WHITFIELD. Thank you very much, and I appreciate those 

opening statements. 

[Additional statement submitted for the record follows:]

PREPARED STATEMENT OF HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY

AND COMMERCE

Mr. Chairman, thank you for holding this important hearing. Over the past decade, this Subcommittee has held dozens of hearings to review DOE management 

problems, and Los Alamos has been the top subject at many of these hearings. This 

Subcommittee has spent a significant amount of time identifying procurement, safety, and security problems at Los Alamos. 

However, in addition to our efforts to uncover specific acts of waste, fraud, and 

abuse, I would point out that we have spent much of our time trying to figure out 

why the same management problems keep recurring at Los Alamos. 

It seems unlikely that these repeated mistakes are the result of any honest misunderstanding of the rules. Too many managers at Los Alamos plainly believe they 

can write their own rules. They regularly side-step procurement processes, ignore 

safety requirements, and simply decline to comply with the sorts of security procedures that are required of all DOE contractors. 

It also seems obvious that the lab prizes convenience more than accountability. 

A common attitude we’ve noticed is that problems don’t exist unless they become 

too large to ignore. If noticed, problems are swept under the rug like embarrassing 

household dirt. This is nothing new, and the rugs at Los Alamos are getting noticeably lumpy. These management problems have led to costly project overruns, damage to our national security, and serious health consequences for workers. Last July 

a graduate student lost her vision in one eye due to faulty practices of a safety manager at a laser lab. And just days after the lab’s stand-down ended, several workers 

were exposed to plutonium in an underground vault. 

I understand that some of the witnesses today believe that the recent stand-down 

at Los Alamos has helped identify areas for follow-up action by the University of 

California. This might be true, but I don’t plan to get excited until I can see real 

improvement at the site. Based on our previous oversight work at Los Alamos, I am 

concerned that the lab may return to business as usual and fail to implement the 

corrective actions identified during the self-assessment. In fact, the Committee staff 

has discovered that more than 90 action items from the re-start corrective action 

plan are already past due. 

As I have stated before, I believe the stand-down at Los Alamos was necessary, 

but it was a direct result of the culture of mismanagement at Los Alamos. I sent 

several letters to NNSA Administrator Brooks urging him to have the University 

of California pay for a portion of the costs of the stand-down out of its own pocket. 

I am pleased to learn that on April 8th NNSA notified UC that it intends to disallow $14 million of these costs. I hope NNSA will follow through on this announcement, and collect the entire $14 million. 

I look forward to the testimony from the witnesses today, and I also look forward 

to the next hearing to get the views of several whistleblowers at Los Alamos as well 

as officials from the University of California. I thank the Chairman, and I yield 

back.

Mr. WHITFIELD. As you all are aware on the panel, this is an investigative hearing, and as is the policy with oversight and investigation we take this testimony under oath. I would, first of all, ask 

any of you, do you have any objection to testifying under oath 

today? I would also advise you that, under the rules of the House 

and under the rules of the Energy and Commerce Committee, you 

are advised by counsel. Do any of you desire to be advised by counsel today before you testify or during your testimony? 

In that case, I would ask you to rise and raise your right hand; 

and I will swear you in. 

[Witnesses sworn.] 

Mr. WHITFIELD. You now are under oath. 

I would ask that we start the opening statements with Mr. Friedman. 

7

My able counsel tells me we are starting with Mr. Paul. So, Mr. 

Paul, you are recognized for your 5-minute opening statement. 

TESTIMONY OF JERRY PAUL, PRINCIPAL DEPUTY ADMINISTRATOR, NATIONAL NUCLEAR SECURITY ADMINISTRATION, 

ACCOMPANIED BY EDWIN WILMOT, MANAGER, LOS ALAMOS 

SITE OFFICE, NATIONAL NUCLEAR SECURITY ADMINISTRATION; GREGORY H. FRIEDMAN, INSPECTOR GENERAL, DEPARTMENT OF ENERGY; A.J. EGGENBERGER, ACTING CHAIRMAN, DEFENSE NUCLEAR FACILITIES SAFETY BOARD; AND 

MICHAEL KILPATRICK, DIRECTOR OF INDEPENDENT OVERSIGHT, OFFICE OF SECURITY AND SAFETY PERFORMANCE 

ASSURANCE, DEPARTMENT OF ENERGY 

Mr. PAUL. Thank you, Mr. Chairman and members. 

I have submitted a written statement. I would ask that it be 

made part of the record, and I will attempt to briefly summarize 

and also respond to some of the comments that were made in your 

opening statements. 

I want to thank the committee for holding these hearings. We 

take these matters at the National Nuclear Security Administration and the Department of Energy very seriously. You are right. 

Mr. WHITFIELD. If I may interrupt you just 1 minute. I do want 

to introduce all the panel members for the people who may be listening. 

Of course, Jerry Paul is the Principal Deputy Administrator at 

the National Nuclear Security Administration. He is accompanied 

by Mr. Edwin Wilmot, who is the manager of the Los Alamos site 

office for the National Nuclear Security Administration. 

We have Mr. Gregory Friedman, who is the Inspector General at 

the Department of Energy. 

We also have with us Dr. A.J. Eggenberger, who is the Acting 

Chairman of the Defense Nuclear Facilities Safety Board. 

And then we have Mr. Michael Kilpatrick, who is the Director of 

Independent Oversight, Office of Security and Safety Performance 

Assurance at the Department of Energy. 

So excuse me, Mr. Paul. And you may proceed. 

Mr. PAUL. Thank you, Mr. Chairman, for that courtesy; and I 

hope to have an opportunity to refer to the role that each of the 

members on the panel have played in this. They are heroes in my 

mind. I can assure you, together, all of us in different capacities 

share the concerns that were voiced earlier. These are difficult 

challenges, but every person at this table has played a very unique 

role in trying to remedy some of the long-standing problems that 

you referred to and I think that we are going to get into during 

the course of the hearing. 

As I said, we do indeed take these matters very seriously. You 

are right to raise these concerns. Your oversight, this committee’s 

oversight is an important part of the reforms that are necessary at 

Los Alamos National Lab. Although I am relatively new to the National Nuclear Security Administration and this is the first time 

that I have testified before this august body, I am very familiar 

with the role that this committee has played, including yourself 

and the ranking member. In fact, I remember hearing the ranking 

member say at one time a while back that you were frustrated, 

8

that you had been watching this recurring pattern for 10 years, 

and over and over and over had heard groups of people testifying 

in front of you and say that they finally get it and that now we 

will make the fixes, but it didn’t seem like they ever did. 

So it is under that color that I now stand before you and say that 

we have a group here who does finally get it. I am very well aware 

that that rings hollow because of the history that the members on 

this committee have with these matters, but I can assure you, to 

Congresswoman DeGette, that there is no sense of—you referred to 

a sense of arrogance. I can assure you that that does not prevail 

upon those who are sitting before you now nor anybody on my 

team. These people have worked very hard, and they are doing a 

very difficult task under difficult circumstances. 

I won’t belabor the chronology of events. Every member on the 

dais is very familiar with the CREM issue, with the laser issue and 

what happened on July 16, the shutdown and then the resumption 

process. 

I would point out that the resumption process I think is really 

an historic effort. Is it perfect? No. But never before, certainly no 

other administration, probably no other group of people have ever 

taken on that task to set out and try to reform an organization as 

broadly as they did here with the more than 3,000 findings, 400 of 

which were necessary for resumption. My staff alone at the site office and Mr. Wilmot’s staff was augmented with almost 100 people 

to task individual activities throughout the resumption process. As 

you know, there were consequences as well. 

Now there are limits to the tools that we have available to us. 

We have attempted to manage and oversee—or we have attempted 

to oversee the way that the tools afford us. 

For example, in the fee determination for 2004, the total amount 

of fee that was available is $8.7 million. Ultimately, the only fee 

that was received was about a third of that. We made two reductions there. One was a little over $2 million on the performance 

base because we judged their performance on the operations to be 

unsatisfactory. 

Second, Ambassador Brooks invoked for the first time ever a conditional clause in the contract that allowed him to exert a punitive 

reduction based on the stand-down itself of approximately $3 million. 

As you mentioned, Mr. Chairman, this contract is being bid—

competitively bid for the first time in over 60 years. We also have 

a challenge to those portions of the costs of stand-down that we believe are challengeable. There is a notice of intent to deny allowability on those, and we are currently in the 60-day determination 

period on that as to two categories. 

But you are also, each of you, right in referring to the bigger 

problem, and that is the culture of noncompliance. We are trying 

to change that culture. The ranking member and Madam Congresswoman are correct that it is not as simple as blaming a single person, and we spend a lot of time every single day trying to figure 

what are the mechanisms we can use to show the leadership to try 

to change that culture. It is difficult. It does take time. I am perhaps not as patient at times as I should be, and I sense that the 

9

members of this committee have lost their patience, and you have 

been dealing with it for many more years than I have. 

I do want to point out, though, that there truly are some unsung 

heroes in this, some of the people on the panel, people at the sites. 

People like Chris Steele, a nuclear engineer who heads up the Authorization Basis Team, has done yeoman’s work and others, people 

like Fred Bell, who is also an engineer, who has worked night and 

day. Some of those people out there, they are exhausted at our site 

offices trying to wrestle this to the ground, get the lab back up and 

running because of the importance of this mission but do it in a 

safe way and do it in a secure way. 

One of the members actually mentioned some of the good news 

here, some of the points of pride here. Being able to move the TA18 material in while all of this is going on is something that we 

are proud about, and I hope we have an opportunity to talk about 

that in more detail. We are still on schedule. In fact, we have accelerated the schedule. 

Before we had thought that, due to stand-down, that the schedule for removal of all category 1 and category 2 material out of TA18 would slip from September to November. I think we are going 

to get that back to September of this year and have all category 

1, category 2 material out of TA-18, out of that canyon. 

We are on schedule. We are ahead of schedule on that, and that 

has been done in large part through the leadership of the gentleman sitting next to me and his team and the focus on this committee. I know it is something that you all have focused a lot of 

attention on, and we have tried to be responsive to that. 

The hydrotest that took place last month, very proud of that. It 

is a difficult task that required a lot of attention, a lot of work, a 

lot of energy, a lot of resources, and to do it safely, securely, in the 

face of all the other activities that had to take place. And also the 

Mox shipments, being able to process the shipment of the Moxley 

test assembly material in the midst of all of this. 

But surely no person would have credibility sitting in front of 

you right now and telling you that this is a perfect process or that 

we can clearly see that we are on the path to complete reform. I 

am not going to make that pledge to you because I don’t know that 

that is true. I know that we are better than we were, I know that 

our oversight is better than we were, but we had problems. Some 

of those problems probably still exist. 

One of the things that troubles Ambassador Brooks and myself 

probably as much as anything is that we ourselves have not been 

very good, the U.S. Government, at seeing some of the problems before other people see them before us. The ranking member refers 

to the incident at TA-50, and I think we are going to get into some 

of the more details. There is an example where we thought the resumption—had all of the commitments that were in the findings 

been complied with, we believe that event would have been prevented. There were about three of the 400, however, that touched 

and concerned that very facility, where persons actually signed off 

that they had made those commitments when they really hadn’t. 

So we did not catch the fact that they had not met those commitments. 

10

So I am trying to communicate to you that, although we feel as 

though we have made a lot of progress, we certainly believe that 

we have a lot of work, a long way to go; and we look forward to 

the input that we will get from each of you. I can assure you that 

the National Nuclear Security Administration is committed to 

doing this right. It is absolutely critical to the security of this Nation. 

Thank you. 

[The prepared statement of Jerry Paul follows:]

PREPARED STATEMENT OF JERRY PAUL, PRINCIPAL DEPUTY ADMINISTRATOR, NATIONAL NUCLEAR SECURITY ADMINISTRATION

Mr. Chairman and members of the Committee, thank you for inviting me to address the current state of security and safety operations at the Los Alamos National 

Laboratory (LANL). Over the past ten months we have seen an extraordinary effort 

by NNSA officials, LANL managers and the employees themselves to address serious concerns about safety and security practices at the laboratory. Today I intend 

to describe the role that the National Nuclear Security Administration played during the stand down and resumption process at the laboratory and offer a status report on corrective action plans at the laboratory. 

HISTORY

On July 16, 2004, the laboratory director, Dr. G. Peter Nanos, suspended all operations in response to two serious events: the discovery that two computer disks 

thought to contain classified information could not be located and were assumed to 

be lost, and an industrial accident in which a summer intern was injured by a laser. 

(Ultimately, after exhaustive investigations by the laboratory, NNSA, and the Federal Bureau of Investigation, we concluded that the computer disks never really existed, the error caused by the improper handling of identification bar codes.) 

After the stand down was declared, laboratory managers planned to resume activities on a risk basis. All activities at the laboratory were placed into one of four 

risk categories: essential, low risk, medium risk and high-risk activities. Some activities categorized as essential, such as systems critical to safety at operational facilities, were allowed to continue. For all other activities the laboratory developed 

a prescribed process to permit resumption, based on the level of risk. For the highest risk level, managers were required to conduct a self-assessment, followed by an 

independent readiness assessment by a team of highly qualified individuals. All laboratory staff was interviewed by their management, who discussed the need for security, safety, and environmental compliance. Many staff members had to be trained 

in the restart process, including self-assessments, and readiness assessments. During the assessments nearly 2500 findings and substantive observations were identified throughout the laboratory; about 400 of them had to be resolved before resumption was allowed. The rest of the findings will be addressed by implementing fully 

resourced plans that may take two to three years to complete. No activity or staff 

member was left untouched by the resumption activities. An enormous amount of 

work was completed before Director Nanos announced, on January 31, that the laboratory had fully resumed activities, with only a few minor exceptions. It should be 

noted that activities designated as essential were still subject to the resumption 

process. A special emphasis of the resumption involved accountable classified information contained on computer disks and other removable electronic media, known 

as CREM. The laboratory had amassed over 80,000 pieces of CREM over the years, 

which had created a significant accounting problem. During the resumption period, 

the laboratory reduced its inventory of CREM to around 23,000 pieces and developed a library concept to manage what remains. Twenty libraries supported by 13 

additional satellite offices were created to control CREM. These new libraries are 

staffed and controlled by well-trained custodians whose sole responsibility is to account for the CREM inventories. All CREM users and custodians were trained in 

the new approach to protecting classified materials. 

Today, only one program-essential activity associated with radiography and hydrodynamic testing has not completed the prescribed resumption process. This activity will soon complete its required readiness assessment. 

The laboratory has created an Operations Efficiency Project that combines the institutional corrective actions being completed to ‘‘get well.’’ Project management 

tools are being employed to ensure that it receives management attention and can 

be successfully completed. The Operations Efficiency Project is also integrated with 

11

Local Corrective Action Plans that are being implemented for unique corrective actions for each of the major sub-organizations within the laboratory. 

Though the effort of resumption has been truly epochal, much remains to be done 

in order to bring the laboratory up to appropriate levels of performance for safety, 

security, and environmental compliance. Our work is not finished. 

ROLE OF NNSA DURING RESUMPTION

Even before the stand down, the NNSA had held discussions with the laboratory 

director and his deputy about our concerns about safety practices at the laboratory. 

The NNSA was consulted prior to Director Nanos’ decision to stand down activities. 

Throughout the entire period, the NNSA was actively involved in all aspects of the 

resumption. Initially, the NNSA enlisted additional resources from throughout the 

Department of Energy, notably the Office of Security and Safety Performance Assurance. The Defense Nuclear Facilities Safety Board also increased its presence, sending selected experts to assist their site representatives. In addition, the full DNFSB 

Board visited Los Alamos during the resumption to assess progress. The Los Alamos 

NNSA site office manager met regularly with the DNFSB site representatives to review their concerns. At one point, the NNSA Administrator, Linton Brooks, authorized the site office to bring in more than 40 additional staff to oversee and assist 

the resumption process. Federal employees were directly involved in self-assessments, readiness assessments, training, finding reviews, and decisions regarding resuming activities. This was very much a joint activity in which the NNSA site office 

was making decisions and concurring in all safety and security steps along the way. 

Resumption of activities for medium risk and high-risk activities required my concurrence. For activities designated as essential, either safety or program-based, the 

federal staff participated as a veto member of teams performing these activities. 

Consequently, site office staff were readily available to make real time decisions regarding security and safety while in the field. Site office staff helped create the resumption plan, assisted in developing procedures, participated in training, and lent 

their operational and security expertise to the effort. 

The NNSA Administrator went to Los Alamos on July 19, shortly after the stand 

down was announced, to meet with senior managers at the site office and the laboratory and made subsequent visits to monitor progress. During the first few weeks 

after the stand down the Deputy Secretary of Energy and Administrator Brooks conducted daily conference calls with senior DOE officials and the site office manager 

to examine issues associated with resumption activities. 

As an aside, I should note that the Secretary of Energy expanded the stand down 

of CREM activities to all sites within the Department of Energy complex to ensure 

that proper accounting and control practices were in place. These stand downs generally lasted for a few weeks. 

A BROADER PROBLEM

While much of the public attention to events leading to the laboratory stand down 

focused on the supposedly missing classified media, we in NNSA felt that inattention to safety procedures at the laboratory presented a greater problem. Together 

they led us to believe that a culture of non-compliance existed within the laboratory. 

A careful review of leading indicators for operations of hazardous facilities, that is, 

events that are precursors to low probability-high consequence accidents, suggested 

that laboratory performance had been declining. Some employees simply were not 

complying with regulations or working with regulatory agencies or bodies, including 

NNSA and the rest of the Department of Energy. It is this culture that we, and 

the laboratory’s senior managers, are trying to reverse. 

IMPACT ON PROGRAMS

The laboratory is currently assessing the impact of the stand down on programs 

outside of NNSA that are commonly referred to as Work for Others, which includes 

work for the Department of Defense. Though the results have not been finalized, 

preliminary indications are that programs such as analytical activities that did not 

involve operations at hazardous facilities were not impacted greatly. During the 

stand down, certain NNSA programs were declared essential from a programmatic 

mission standpoint and allowed to continue. These programs included shipments of 

plutonium to France as part of the mixed oxide program; movement of special nuclear materials from Technical Area-18 to the Device Assembly Facility at the Nevada Test Site; and the hydrodynamic test and radiographic examination of modified weapon components in support of the W-76 life extension program. In each of 

these, crucial programmatic milestones were met despite the overall laboratory 

stand down. 

12

NNSA and the laboratory employed a special process involving intensive federal 

oversight to conduct these programmatic essential activities. Project teams were 

formed with laboratory and federal site office staff so that approvals could be obtained on a real time basis. Significant compensatory measures were employed 

where safety and security weaknesses had been identified. Senior management, 

both laboratory and federal, were actively engaged. 

Other programs, such as efforts to remove aboveground transuranic waste from 

the Los Alamos Site and ship it to the Waste Isolation Pilot Plant were delayed. 

The shipments to WIPP were renewed early in April 2005. 

For NNSA programs in general, some interim milestones were missed; but the 

laboratory in many cases believes that major impacts to the programs have been 

avoided. Impacts to other NNSA sites were minimized by cooperative efforts between LANL and the other sites. In some cases work was shifted to other sites. 

COST ALLOWABILITY

This Committee has asked about the cost of the stand down and whether these 

costs are an allowable expense that would be reimbursed by the government. Because of accounting procedures used by the laboratory, NNSA has been unable to 

determine precisely what portion of the laboratory’s expenses are directly attributable to the stand down. Laboratory officials, using an accepted estimating technique, identified $119 million in labor costs attributable to the stand down. The 

NNSA Service Center reviewed the laboratory records to make its own determination and identified a fully burdened upper limit of $367 million for the stand down 

costs during the period from July 19, 2004 to January 28, 2005. The methodology 

used to develop this upper limit uses very conservative factors that could overstate 

the actual cost of the stand down. 

Based on NNSA’s review of the terms of the contract with the University of California, it is apparent that the vast majority of the costs are allowable costs, and 

thus are reimbursable expenses by the government. After consulting with the NNSA 

Field Chief Financial Officer (CFO) and legal counsel, the NNSA site office manager 

determined that the duration of the stand down was reasonable in light of the 

issues faced by the laboratory and the degree of federal oversight given to the restart of activities. In fact, I believe that the duration was not only reasonable, but 

likely noteworthy for its efficiency. 

Nevertheless, NNSA has questioned the allowability of about $14million of costs 

incurred during the stand down. The questioned expenses involve two blocks of 

money: $6.3 million in small subcontractor claims and other incremental costs and 

$8 million of costs for the first two days of the stand down. The site office manager 

has issued a formal Notice of Intent to Disallow these costs and is awaiting response 

from the laboratory. The laboratory has until June 6 to respond. As this Committee 

is aware, the Government Accountability Office is currently conducting a review of 

the costs attributable to the stand down. They made an initial visit to Los Alamos 

during the week of April 18. NNSA will continue its review of the costs of the stand 

down, and is not foreclosed from questioning additional amounts as new information 

is gathered. 

STATUS OF ‘‘GETTING WELL’’ 

Now that the laboratory has fully resumed operations, one of our challenges is to 

ensure that the laboratory follows through on the hundreds of corrective actions 

that remain to be addressed. Many of the issues uncovered during the resumption 

process had been identified in previous reviews conducted during the past 10 years. 

Corrective Action Plans from these reviews were prepared but never fully implemented. NNSA has provided additional temporary (varies between 30 and 40) and 

permanent staff (approximately 20) to the site office to maintain an intensive campaign to verify that the laboratory is performing as it has told the NNSA it will. 

We have just completed an intensive review of corrective actions and compensatory 

measures taken to allow the laboratory to resume activities. The review found that 

only 8 of about 400 actions were not properly completed. Where issues arose, the 

laboratory took immediate action to remedy them. The federal workforce will continue to work closely with the laboratory as it begins implementing the Operations 

Efficiency Project and Local Corrective Action Plans. In addition, the Office of Security and Safety Performance Assurance will perform an assessment later this summer to add to the assurance that activities are being properly performed. The NNSA 

site office is planning a survey this June of all security functions. 

Progress is being made in the implementation of the Operations Efficiency Project 

and the Local Corrective Action Plans. The Operations Efficiency Project implementation is three weeks behind schedule, but important actions have been taken to 

13

delve into the way in which the laboratory manages and maintains its facilities. The 

delay is of concern, but the groundwork necessary for the Operations Efficiency 

Project to be successful must be established. Poor facility management has been a 

serious problem for many years. Establishing the proper roles and responsibilities 

for facility owners, users, and support organizations lies at the heart of many of the 

operational issues of the laboratory. Because fixing these prerequisites before fully 

implementing the Project is so important to its success, the delay becomes acceptable. The Local Corrective Action Plans of each of the sub organizations with the 

laboratory are going to be reviewed by Assist Teams. The review will look to standardize actions across the laboratory and to integrate these recent findings about facility management into the planning. 

Current demands upon the Laboratory for completion of programs outside of 

NNSA being monitored by the Administrator to avoid over-stressing a somewhat 

fragile recovery process that will continue through the next year or two. 

PROGNOSIS

Progress to date does provide one the opportunity to be cautiously optimistic. We 

must all keep in mind that the nature of change necessary at the laboratory will 

take several years and much hard work. The NNSA remains committed to ensure 

that the laboratory is successful through the vigilance of its federal oversight. 

Though we have been through a very challenging period that we all would have preferred to avoid, I am heartened by the creativity, dedication and hard work that so 

many men and women, in both the federal and contractor workforce, have shown 

in addressing these issues and getting Los Alamos National Laboratory back on 

track to fulfill its important national security mission.

Mr. WHITFIELD. Thank you. 

Mr. Friedman, you are recognized for your 5-minute opening 

statement. 

TESTIMONY OF GREGORY H. FRIEDMAN 

Mr. FRIEDMAN. Thank you, Mr. Chairman. 

Good afternoon, Mr. Chairman and members of the subcommittee. I am pleased to be here today to testify on the results 

of our work at the Los Alamos National Laboratory. 

In February 2003, I testified before this subcommittee on procurement and property issues at the laboratory. At a subcommittee 

hearing in May 2003, I addressed our findings regarding the general state of the business systems at Los Alamos. And, in short, we 

concluded that Los Alamos and the University of California had not 

paid adequate attention to laboratory business operations. 

Since that time, the Office of Inspector General has continued to 

examine management practices at Los Alamos. We found the laboratory has acted to correct several problem areas but that certain 

internal control weaknesses persist. 

In the 2004 report, we concluded that the laboratory had improved the management of its purchase card program. The purchase card program was the source of a lot of the controversy that 

existed at the laboratory in 2003. Specifically, we found that Los 

Alamos had reduced the number of cards in circulation, subjected 

purchase card transactions to multiple reviews, and made approving officials responsible for fewer cardholders. 

Despite the laboratory’s efforts, my office has issued a series of 

reports and completed several investigations that pointed to needed 

improvements in the areas of project management, security and 

contract administration for which Los Alamos, the University of 

California and the Department have a shared responsibility. 

Our report on the Dual Access Radiographic Hydrodynamic Test 

Facility, commonly referred to as DARHT, found that Los Alamos 

14

had not made full use of available project management tools to 

complete the facility. The laboratory had changed work scope, 

eliminated key elements, and shifted critical activities to other programs. 

Furthermore, Los Alamos significantly underestimated the cost 

of various work elements as well as the funds needed for project 

contingencies. The laboratory’s ability to complete the project on 

schedule and within budget was adversely affected, potentially impeding the Department’s Stockpile Stewardship Program. 

In the security arena, a February 2005 inspection on security 

and the outprocessing of employees concluded the procedures at 

Los Alamos did not provide assurance that, prior to departure, employees turned in security badges, completed the required Security 

Termination Statement, or had their clearances and access authorizations terminated in a timely manner. Subsequent to completion 

of our field work, the laboratory revised its outprocessing procedure. 

Our 2004 report on subcontract administration found that Los 

Alamos had not effectively managed certain aspects of its very sizable subcontracting process. At the time of our review, the laboratory had not provided adequate audit coverage to determine whether costs were allowable for 93 active subcontracts valued at $1.3 

billion, nor had it determined the allowability of over $9 million in 

costs questioned by audits completed during 2001 through 2003. 

The laboratory had not provided sufficient resources to its contract 

audit function, and it had not established formal procedures regarding cost resolution. 

In a joint investigation with the Federal Bureau of Investigation, 

we determined that two Los Alamos employees used government 

funds to purchase items for their personal use, including television 

sets, automobile parts and barbecue grills. In 2004, a Federal 

grand jury returned a 28-count indictment for fraud, conspiracy, 

theft of property and making false statements to investigators. 

Both employees were sentenced to confinement and ordered to pay 

restitution. 

Finally, Mr. Chairman, our 2005 audit on home office expenses 

revealed that the Department will incur unnecessary costs to pay 

for corporate activities at the University of California in support of 

the laboratories. Specifically, the Department will pay about $21 

million in unnecessary fixed costs because of a calculation error 

made at the time of contract award. It will pay about $8 million 

for work that did not benefit government-funded activities, and it 

reimbursed the University of California $880,000 for erroneously 

claimed expenses. 

As you and everyone else is aware, the Department has initiated 

procurement actions to recompete the contract to operate Los Alamos. Regardless of the outcome, the Department needs to strengthen its contract administration strategy at the laboratory. There are 

six principles which we believe are essential to this effort: 

The Department and the National Nuclear Security Administration must ensure that its contractors establish robust, effective, 

and reliable business systems; promote contractor governance models that adequately protect the Department’s interests; foster a culture where contractors fully understand and honor the very special 

15

responsibility associated with managing taxpayer-funded Federal 

facilities; promote an environment where both Federal and contractor employee concerns can be raised and addressed without fear 

of retaliation; develop quantifiable, outcome-oriented metrics and 

maintain a system to track critical aspects of contractor performance; and reward contractors commensurate with their accomplishments. 

My office will continue to review the situation at Los Alamos as 

it evolves. 

Mr. Chairman and members of the subcommittee, this concludes 

my oral statement. I would be pleased to answer any questions at 

the appropriate time. 

[The prepared statement of Gregory Friedman follows:]

PREPARED STATEMENT OF GREGORY H. FRIEDMAN, INSPECTOR GENERAL, U.S. 

DEPARTMENT OF ENERGY

Good afternoon Mr. Chairman and members of the Subcommittee. I am pleased 

to be here to respond to your request to testify on the results of our work at the 

Los Alamos National Laboratory, one of the Department of Energy’s most prominent 

facilities. 

In February 2003, I testified before this Subcommittee on procurement and property management at Los Alamos. My testimony addressed weaknesses in controls 

over: property accountability; procurement authority, including purchase cards; and, 

security of computers. 

At the Subcommittee’s hearing in May 2003, I testified that the Laboratory had 

not given adequate attention to its business operations. Specifically, my testimony 

focused on financial management weaknesses at Los Alamos. I pointed out that the 

Office of Inspector General had questioned the allowability of certain costs that the 

Laboratory claimed between Fiscal Years 2000 and 2002, and that weak controls in 

Los Alamos’ audit function; payroll and travel approval process; and, financial systems contributed to an environment where questionable costs could be incurred and 

claimed. 

Since the 2003 hearings, the Office of Inspector General has continued to examine 

management practices at Los Alamos. In a series of reviews, some of which I will 

highlight today, we followed-up on a number of previously identified weaknesses. In 

some cases, the Laboratory had taken appropriate corrective actions. However, in 

other cases, our reports have shown that more work is needed to correct problem 

areas. 

ENHANCEMENTS OF INTERNAL CONTROLS

In 2004, the Office of Inspector General performed a follow-up review to determine whether the Laboratory had conducted a thorough analysis of its purchase 

card program and had initiated corrective action to resolve previously reported 

weaknesses. In our report, Los Alamos National Laboratory’s Purchase Card Program Corrective Actions (DOE/IG-0644, April 2004), we concluded that Los Alamos 

had made improvements in the management of its purchase card program. Some 

positive steps that the Laboratory implemented included:

• Reducing the number of purchase cards in circulation from 800 to 550; 

• Subjecting purchase card transactions to multiple reviews and electronically reconciling to supporting documents; 

• Prohibiting cardholders from approving their own transactions; and, 

• Making approving officials responsible for fewer cardholders, permitting them to 

provide additional scrutiny of transactions. 

Although the Laboratory had clearly made progress, we identified certain opportunities to further reduce risk of card misuse. For example, we pointed out that Los 

Alamos could clarify guidance concerning unauthorized items, automate data analysis techniques, and enhance periodic reviews of cardholder activities. 

AREAS REQUIRING ADDITIONAL IMPROVEMENT

Our recent work disclosed continuing problems in several key areas of Laboratory 

management. Specifically, we issued a series of reports that pointed to needed improvements in the areas of project management and security. Further, we identified 

continuing problems in the general area of contract administration, problems for 

16

which Los Alamos, the University of California and the Department have a shared 

responsibility. 

Project Management 

Construction and operating projects are essential to accomplishing the Department’s missions. Numerous multimillion dollar projects support the scientific and 

technologically-complex work of the Department, and many of the projects are 

unique in the world. Prior reviews by my office and others revealed that many of 

these projects, including some at Los Alamos, have been adversely affected by cost 

overruns, schedule slippages, and other management problems. Based on our recent 

reviews at Los Alamos, we concluded that improved project management discipline 

and structure are needed to effectively manage the costs, schedules, and scope of 

key initiatives. 

Our audit report on Dual Axis Radiographic Hydrodynamic Test Facility (DOE/

IG-0599, May 2003) found that Los Alamos and the National Nuclear Security Administration had not made full use of available project management tools to complete the facility. As a result, the Dual Axis Radiographic Hydrodynamic Test Facility (DARHT) would not be completed before June 2004, 15 months behind schedule. 

The DARHT facility at Los Alamos will be the nation’s first test facility capable of 

providing three-dimensional x-ray photographic diagnostic information on the behavior of weapon parts and the effects aging has on a nuclear weapon. Absent underground testing, the facility will play a critical role in certifying that the weapons 

in the stockpile are safe and reliable. During the review, we found that the Laboratory had changed work scope, eliminated key elements, and shifted critical activities 

to other programs. Los Alamos had significantly underestimated the cost of various 

work elements of the project, as well as funds needed for contingency. The Laboratory’s ability to complete the project on schedule and within budget was adversely 

affected, potentially impeding the Department’s Stockpile Stewardship Program. 

The audit report on Stabilization of Nuclear Materials at Los Alamos National 

Laboratory (DOE/IG-0659, August 2004) showed that, although the Laboratory had 

made some progress in stabilizing the most hazardous fissionable materials, it had 

not accelerated stabilization to the level anticipated. We found that the Laboratory 

would not stabilize materials until 2010, well beyond the original projected completion date of 2002. In fact, Los Alamos missed interim milestones and project tasks, 

which could delay stabilization beyond 2010. We found that, among other things, the 

Laboratory had not made full use of available tools to effectively manage the project. 

For example, many of Los Alamos’ work packages, which were intended to provide 

the detailed guidance for project completion, often lacked milestones and clearly defined statements of work. Managers, therefore, lacked an objective basis to assess 

and report on the project’s status. By extending the schedule until 2010, the Department will incur an estimated $78 million in added costs. Additionally, radioactive 

materials may continue to deteriorate and negatively impact the safety and health 

of workers. 

Our audit report on Transuranic Waste Management at Los Alamos National Laboratory, (DOE/IG-0673, February 2005) noted that the Department will not meet its 

commitment for removing transuranic waste from Los Alamos and shipping it to the 

Waste Isolation Pilot Plant. For example, based on projections at the time of our 

review, the Department was unlikely to complete removal of the legacy transuranic 

waste before 2014—four years beyond the commitment date. We concluded that Los 

Alamos’ rapid scale-up of waste operations resulted in operational breakdowns. Specifically, operating procedures failed when the Laboratory attempted to increase its 

volume of shipments to the Waste Isolation Pilot Plant. As a result, the Laboratory 

had to revise its procedures and retrain personnel on waste processing. The lack of 

progress in disposing of the waste prevented Los Alamos from expeditiously reducing the health and safety risk posed by the continued above-ground storage of transuranic waste. In addition, the total cost of completing the waste disposition project 

could increase by over $70 million. 

Security 

One of the Department’s national security objectives is ensuring that nuclear 

weapons, materials, facilities, and information are secure through effective safeguards and security policy, implementation, and oversight. Since the events of September 11, 2001, this objective has taken on added importance and required the Department and its nuclear weapons laboratories to reassess and strengthen their security posture. However, our recent reviews at Los Alamos, one of the Department’s 

most sensitive sites, disclosed that weaknesses exist in the protection of the Department’s critical resources and infrastructure. For example: 

17

An inspection on Security and Other Issues Related to Out-Processing of Employees at Los Alamos National Laboratory (DOE/IG-0677, February 2005) concluded 

that the Laboratory’s process did not provide assurance that terminating employees: 

(1) turned in security badges; (2) completed the required Security Termination 

Statement; or (3) had their security clearances and access authorizations to classified matter and/or special nuclear material terminated in a timely manner. We 

found that Laboratory out-processing procedures were not followed for more than 40 

percent of the 305 cleared and uncleared terminating employees included in our 

judgmental sample. We identified 21 employees who retained their security clearances in the Department’s data base after terminating employment at the Laboratory, 3 of which remained active in the data base for over a year. By not following 

the Laboratory’s out-processing procedures, there was no assurance that terminating employees fulfilled their responsibilities to, among other things, account for 

classified holdings. Subsequent to completion of our fieldwork, the Laboratory revised its out-processing procedures to address concerns we raised during our inspection. 

In 2004, we completed an inspection on Internal Controls over Personal Computers 

at Los Alamos National Laboratory, (DOE/IG-0656, August 2004), which identified 

continuing weaknesses over classified and unclassified computers at the Laboratory. 

Specifically, we found that the Laboratory’s listing of Sensitive Compartmented Information Facility classified desktop and laptop computers was not accurate. We 

also found that a number of classified desktop computers were not entered into the 

property inventory, and some computers were not assigned property numbers. Finally, we determined that the Laboratory’s Office of Security Inquiries had not been 

notified about a missing component of a computer system accredited for classified 

use. While there was no evidence that the missing component contained classified 

information, a security inquiry had not been conducted because personnel did not 

follow Laboratory policy requiring such notification. These weaknesses undermined 

confidence in the Laboratory’s ability to assure that computers were controlled in 

accordance with existing property management and security requirements and were 

adequately safeguarded from loss or theft. 

Contract Administration 

We have also identified contract administration problems on the part of both Los 

Alamos and the Department. Appropriate contract administration is needed to ensure that contractor operations are effective and efficient, and that contractors’ expenses are allowable. Recent reviews by my office have identified areas where Los 

Alamos and the Department have not provided effective administration over subcontractor costs, business controls, and home office expenses paid to the University of 

California to support the Laboratory. 

Our audit on Management Controls over Subcontract Administration at the National Security Laboratories, (OAS-M-04-06, August 2004) noted that during Fiscal 

Years 2001 and 2002, Los Alamos, as well as Lawrence Livermore and Sandia National Laboratories, did not always effectively manage certain aspects of the subcontracting process. Los Alamos and its counterparts are expected to ensure that Federal funds entrusted to their care are expended appropriately, that questioned costs 

are resolved in a timely manner, and that subcontracts are closed when all actions 

are complete. During the subject audit, we found that Los Alamos had not provided 

adequate audit coverage to determine whether costs were allowable for 93 active 

subcontracts with an aggregate value of $1.3 billion. Furthermore, 11 completed 

subcontracts, valued at $68 million, had not been subjected to close-out audits at 

the time of our review. We also noted that action to determine the allowability of 

over $9 million in questioned subcontract costs remained incomplete. Adequate 

audit coverage was lacking because the Laboratory had not provided sufficient resources to the audit function and had not established formal procedures and training regarding cost resolution. My office is currently reviewing the Laboratory’s actions to improve audit coverage of subcontractor costs. 

Regarding Los Alamos’ administration of business controls, in a case that had 

much public and Congressional interest, we completed a joint investigation with the 

Federal Bureau of Investigation and determined that two former Los Alamos National Laboratory employees used Government funds to purchase items for their 

personal use, including television sets, automobile parts, and barbeque grills. A Federal grand jury returned a 28-count indictment for fraud, conspiracy, theft of property, and making false statements to investigators. One subject of the investigation 

was sentenced to over a year of confinement and 2 years probation. The second subject was sentenced to 6 months confinement, 6 months of electronically monitored 

home detention, 2 years and six months probation, and a $30,000 fine. The former 

employees were also ordered to pay nearly $40,000 in restitution. 

18

In addition, we determined that improvements were needed in the Department’s 

administration of its contract with the University of California, which operates Los 

Alamos, Lawrence Livermore and Lawrence Berkeley National Laboratories. Under 

its contractual arrangements with the University, the Department committed to pay 

the University for certain corporate activities performed in support of the laboratories. Our audit, Department of Energy Contractor Home Office Expenses (DOE/

IG-0676, February 2005), revealed that the Department: (1) will incur about $21 

million in unnecessary expenses over the 5-year life of the contracts with the University because it used an incorrect allocation base to calculate the fixed payments 

for home office expenses; (2) inappropriately agreed to provide about $8 million for 

a percentage of the University’s operational costs that did not benefit Governmentfunded activities; and, (3) reimbursed about $880,000 for erroneously claimed expenses and for unallowable expenses such as costs for student recruitment. 

CONCLUSION

Although the Los Alamos National Laboratory has acted to improve controls in 

a number of areas, our recent work indicates that continued emphasis is needed on 

improving key management processes. 

As you are aware, the Department initiated procurement actions to re-compete 

the contract to operate Los Alamos. Regardless of the eventual outcome, the Department needs to strengthen its overall contract administration strategies and methodologies at Los Alamos. While this must be a multi-faceted effort, there are six integral principles which we believe are most important. The Department and the National Nuclear Security Administration should:

• Ensure that its contractors establish robust, effective, and reliable business systems; 

• Promote contractor governance models that adequately protect the Department’s 

interests; 

• Foster a culture where contractors fully understand and honor the special responsibility associated with managing taxpayer-funded Federal facilities; 

• Promote an environment where both Federal and contractor employee concerns 

can be raised and addressed without fear of retaliation; 

• Develop quantifiable, outcome-oriented metrics and maintain a system to track 

critical aspects of contractor performance; and, 

• Rate and reward contractors commensurate with their accomplishments. 

To assist the Department in addressing the weaknesses discussed today and 

measure progress towards correcting them, my office will continue to aggressively 

review the situation at the Los Alamos National Laboratory and other contractoroperated facilities. 

Mr. Chairman and Members of the Subcommittee, this concludes my statement. 

I will be pleased to answer any questions.

Mr. WHITFIELD. Thank you, Mr. Friedman. 

Dr. Eggenberger, you are recognized for 5 minutes. 

TESTIMONY OF A.J. EGGENBERGER 

Mr. EGGENBERGER. Thank you, Mr. Chairman and members of 

the subcommittee. 

Congress created the Defense Nuclear Facilities Safety Board as 

an independent technical agency within the executive branch, external to DOE, to identify the nature and consequences of potential 

threats to public health and safety at the Department of Energy’s 

defense nuclear facilities, to elevate these issues to the highest levels of authority and to inform the public. The Board is not a regulator but a small advisory agency with a staff of approximately 60 

technical individuals. 

The way that the Board operates is we conduct our oversight 

mission by identifying conditions or deficiencies to DOE. The Board 

provides advice and recommendations to the Secretary of Energy 

primarily by way of letters, reporting requirements, and formal recommendations to the Secretary of Energy. Although DOE’s contractors take most of the actions in response to the Board, the Board 

19

works primarily through DOE—both the headquarters staff and 

the site office staff. 

With respect to the shutdown at Los Alamos, I would like to divide that into three quick parts, if I could. First is, what were we 

doing prior to the shutdown by the director? 

Based on the hazards, it is important to note that the Board’s 

primary interests at LANL include plutonium operations, processing and stabilization of nuclear materials, the potential for nuclear criticality, nuclear waste processing and storage, and tritium 

operations. Nuclear programs overall that are also of interest to the 

Board include integrated safety management, which has been mentioned, the authorization bases, work control, and quality assurance. 

Prior to the shutdown, again, in January 2004 the Board identified deficiencies in the implementation of DOE’s orders on facility 

safety that included structured application of engineering standards and practices and the use of formal design reviews. 

In February 2004, the Board identified the need for a revised 

plan to accelerate risk reduction at LANL through the stabilization, repackaging, and disposition of excess nuclear materials. 

In May 2004, the Board identified deficiencies in the application 

of integrated safety management for work planning and control at 

several NNSA sites, of which LANL was included. 

In May 2004, again, the Board pointed out a number of safety 

issues at the TA-18 facility, where an over-reliance on administrative controls was being used in lieu of engineered controls, and the 

lack of effective operational oversight by both NNSA and the Laboratory. This is where the high criticality operations were that we 

talked about earlier. 

Then, in May, we identified deficiencies in the development and 

maintenance of safety bases at LANL. 

Now, the shutdown occurred. What did the Board do? In response to the shutdown, the entire Board with its staff went to 

LANL to assess the condition of the nuclear facilities to, among 

other things, ensure that the affected defense nuclear facilities 

were shut down in a safe configuration. We provided several observations to NNSA as to the need to adjust any of the plant conditions to maintain the safe and stable condition during shutdown. 

We also at that time mentioned that there are longer term issues 

that need to be identified if you want to startup. 

Now we have invested considerable staff resources in monitoring 

both NNSA and the laboratory during the resumption process. 

As far as our issues are concerned and the resumption process, 

it was mentioned previously that the Operational Efficiency Project 

included a set of subprojects. Our issues—most of our issues have 

been rolled up into the Operational Efficiency Project. However, 

there are a few that have not been. 

One of them is fire protection upgrades at the site and the resumption of certain criticality operations at Technical Area 18. 

There is also an effort on our part to reduce the risk at LANL with 

respect to stored materials. That is what is called the ‘‘quick to 

WIPP’’ idea, and we are making sure that that is continuing with 

utmost speed. 

20

Now, with that, we will continue our vigil at the laboratory. We 

do have two site representatives onsite that interact on a daily 

basis with the site office at LANL and also report back to our headquarters. 

This is a summary of my testimony, and the entire testimony I 

would request that that be entered into the record. Thank you. 

[The prepared statement of A.J. Eggenberger follows:]

PREPARED STATEMENT OF A.J. EGGENBERGER, ACTING CHAIRMAN, DEFENSE

NUCLEAR FACILITIES SAFETY BOARD

INTRODUCTION

Mr. Chairman and members of the Subcommittee, I appreciate the opportunity to 

present testimony on the health and safety oversight activities of the Defense Nuclear Facilities Safety Board at the Los Alamos National Laboratory. 

I would like to first summarize the statutory safety oversight mission of the 

Board, then briefly review the Board’s recent oversight activities relevant to the Los 

Alamos National Laboratory and the Board’s current health and safety focus at that 

site. 

THE BOARD’S STATUTORY OVERSIGHT MISSION

Congress created the Defense Nuclear Facilities Safety Board (Board) as an independent technical agency within the Executive Branch, external to DOE, to identify 

the nature and consequences of potential threats to public health and safety at the 

Department of Energy’s defense nuclear facilities, to elevate such issues to the highest levels of authority, and to inform the public. The Board is not a regulator, but 

a small advisory agency with approximately 60 technical staff. 

The Board’s approach to conducting its nuclear safety oversight mission is to identify conditions or deficiencies to DOE. The Board provides advice and recommendations to DOE primarily by way of letters, reporting requirements, and formal Recommendations to the Secretary of Energy. DOE can accept or reject the Board’s advice and recommendations. Although DOE’s contractors take most of the actions in 

response to the Board, the Board works primarily through DOE—both headquarters 

and site office staff. 

Operations at DOE’s defense nuclear facilities include: assembly, disassembly, and 

dismantlement of nuclear weapons; and maintenance and surveillance of the aging 

nuclear weapons stockpile. Operations at defense nuclear facilities also include the 

stabilization and storage of nuclear materials, the deactivation and decommissioning 

of facilities, and the processing and storage of radioactive waste. Broadly speaking, 

the Board provides nuclear safety oversight of DOE’s defense nuclear facilities from 

design through construction, operation, and decommissioning. 

The Board conducts its safety oversight of DOE-National Nuclear Security Administration (NNSA) activities at the Los Alamos, Lawrence Livermore, and Sandia National Laboratories; the Pantex Plant, the Y-12 National Security Complex, the Savannah River Site, and the Nevada Test Site. The Board also conducts nuclear safety oversight of DOE’s Environmental Management activities at these sites as well 

as the Hanford Site, Idaho National Laboratory and Idaho Cleanup Project, Oak 

Ridge National Laboratory, Waste Isolation Pilot Plant, and the Fernald and Mound 

Sites in Ohio. In establishing its safety oversight program, the Board allocates its 

resources based on a number of factors, including (1) urgency in terms of any imminent threat to public health and safety; (2) potential risk to public health and safety; (3) effectiveness of DOE management in managing the risks; and (4) timeliness 

in relation to DOE programmatic or operational goals. In assessing priorities, the 

Board considers issues brought to its attention by all sources, including workers and 

members of the public. 

The Board’s jurisdiction covers nuclear safety oversight of DOE’s defense nuclear 

facilities and activities. As such, some of the issues being discussed in this series 

of hearings, like those directly related to safeguards and security, business management practices, and operations in non-nuclear non-defense facilities at LANL are 

not under the Board’s jurisdiction. There may be, however, causal elements associated with these issues that are of interest to the Board. Moreover, there are often 

important relationships between nuclear safety and security, and between nuclear 

and industrial safety. For instance, the consolidation of nuclear materials can have 

both safety and security components; however, the Board’s jurisdiction is limited to 

safety issues related to consolidation. 

21

PAST BOARD ACTIVITIES RELEVANT TO LANL

The Board has routinely conducted nuclear safety oversight at the Los Alamos 

National Laboratory, or LANL, since the Board’s inception in 1989. The Board’s 

focus at LANL is directed by the hazards at that site. 

Based on the hazards, the Board’s primary interests at LANL include plutonium 

operations, processing and stabilization of nuclear materials, the potential for nuclear criticality, nuclear waste processing and storage, and tritium operations. Nuclear safety programs at LANL are also of interest to the Board, including integrated safety management, authorization bases, work control, and quality assurance. The greatest hazard at LANL, hence the area of greatest interest to the Board, 

is plutonium in all forms, including metals, powders, solutions, and wastes. Consequently, the Board has placed emphasis on its oversight of the Technical Area55 plutonium facility and the Chemistry and Metallurgy Research (CMR) facility. 

A few examples of the results of the Board’s efforts at the plutonium facility include 

improvements in the plutonium-238 scrap recovery line, the stabilization and safe 

packaging of excess material, and successful design and installation of the fire water 

system. 

Other examples of areas in which the Board has been involved at LANL include 

facility upgrade and risk reduction initiatives to safely extend the life of the CMR 

facility, improvements in operations and oversight at Technical Area-18, and improvements in lightning protection at nuclear facilities. 

During 2004, prior to the laboratory shutdown, the Board provided advice to 

NNSA identifying the need to address a number of safety issues at LANL:In January 2004, the Board identified deficiencies in the implementation of DOE’s order on 

facility safety at LANL, including the structured application of engineering standards and practices and use of formal design reviews. This concern is generally referred to as ‘‘conduct of engineering.’’ Appropriate corrective actions to address this 

issue have now been developed by LANL, at DOE direction, and are included as 

part of the Operational Efficiency Project discussed later. 

In February 2004, the Board identified the need for a revised plan to accelerate risk reduction efforts at LANL through the stabilization, repackaging, and 

disposition of excess nuclear materials. This activity is being conducted in response to two previous Board Recommendations concerning stabilization of excess nuclear materials, Recommendation 94-1 and Recommendation 2000-1. A 

revised schedule was developed by LANL to address this concern. These stabilization efforts have been impacted by the LANL shutdown. This is a long 

term activity and LANL’s ability to meet the revised schedule is not certain. 

In May 2004, the Board identified deficiencies in the application of Integrated 

Safety Management for work planning and control at several NNSA sites, including LANL. For LANL, this was a follow-up to a previous observation, and 

encouraged further improvements beyond those actions already taken. LANL 

has developed actions to improve its work planning and control processes, and 

these actions have been included as part of the LANL Operation Efficiency 

Project. 

In May 2004, the Board pointed out a number of safety issues related to nuclear operations at Technical Area-18 at LANL, including an over-reliance on 

administrative controls in lieu of engineered controls, and the lack of effective 

operational oversight by both NNSA and the laboratory. High hazard criticality 

operations have not been restarted at Technical Area-18. Both LANL and 

NNSA have made substantial changes in the management and oversight of 

Technical Area-18. LANL is now preparing to demonstrate readiness to conduct 

a limited number of criticality experiments. 

Also in May 2004, the Board identified a number of deficiencies with the development and maintenance of safety bases at LANL. There have been some improvements in this area. LANL has established a safety basis academy and 

taken other steps to improve the quality of its safety basis submittals. Likewise, 

the Los Alamos Site Office has taken action to reduce its safety basis approval 

backlog. 

Again in May 2004, the Board identified deficiencies associated with DOE Facility Representative training and staffing at NNSA sites, specifically including 

LANL. In order to provide the monitoring and oversight of contractor activities 

necessary to ensure the adequate protection of public health and safety, the 

Board has long communicated to DOE the necessity to maintain ‘‘eyes and ears’’ 

in its facilities. DOE’s Facility Representative Program addresses this need. As 

a result of the Board’s communication, NNSA is increasing the number of Facility Representatives at its Los Alamos Site Office. 

22

In June 2004, in order to enhance its oversight at LANL, the Board announced its decision to assign a second Board site representative to LANL. This 

second site representative began on-site duties in August 2004. 

SUSPENSION OF NUCLEAR OPERATIONS AT LANL

In response to the shutdown of LANL last July, the Board went to LANL to assess the condition of the nuclear facilities to, among other things, ensure that the 

affected defense nuclear facilities were shut down in a safe configuration. We also 

wanted firsthand knowledge of the planned resumption activities. The Board provided several observations to NNSA including the need to adjust plant conditions 

to maintain safe and stable conditions during the shutdown, the need to aggressively pursue the implementation of improvements in the laboratory’s work control 

process, and the need to continue to address several long-term safety initiatives that 

would be delayed by the shutdown. 

The Board invested considerable staff resources in monitoring both NNSA and 

laboratory efforts during the resumption process at LANL. In general, the Board 

has concluded that near-term actions and compensatory measures appear to be appropriate to support the operations that have been restarted. 

THE BOARD’S CURRENT FOCUS AT LANL

The hazards associated with nuclear operations at LANL are both significant and 

complex. The recent shutdown resulted in the identification of numerous corrective 

actions. The successful implementation of these corrective actions and the execution 

of the Operational Efficiency Project are vital to achieving long-term improvements 

in safety at LANL. The Operational Efficiency Project consists of several subprojects focused on improving the safety of laboratory activities, all of which are of 

interest to the Board. These sub-projects include:

• Safety (through adequate work planning and control), 

• Quality Assurance (including welding deficiencies), 

• Software Quality Assurance, 

• Conduct of Engineering, 

• Safety Bases, 

• Operations, 

• Environmental Risk Management, and 

• Training. 

If appropriately implemented, the corrective actions identified for these Operational Efficiency Project initiatives should address several of the Board’s concerns. 

The laboratory has established mechanisms to analyze, prioritize, and manage these 

actions. The Board plans to closely monitor this effort. 

In addition to the Operational Efficiency Project, there are other identified corrective actions that must be completed. Fire protection upgrades must be completed, 

and nuclear material stabilization and packaging activities must be continued. The 

resumption of certain criticality operations at Technical Area-18 must be conducted 

safely with deliberate operations. To reduce the risk from accidental dispersion, potentially vulnerable transuranic waste material must be removed from the site 

through execution of the ‘‘quick to WIPP’’ effort. 

There are also other opportunities to improve the safety of nuclear operations at 

LANL. Concerns with NNSA oversight at LANL were part of a larger, complex-wide 

problem recognized by the Board and communicated to the Secretary of Energy in 

May 2004 by Recommendation 2004-1. In this Recommendation, the Board identified potential safety vulnerabilities at DOE associated with an increased emphasis 

on productivity at the possible expense of safety, the loss of technical competency 

and nuclear safety research capabilities, a lack of operational awareness at high organizational levels, and a de-emphasis of central safety oversight. The Secretary of 

Energy has accepted this Recommendation and an implementation plan is being developed that should result in improvements in DOE’s oversight of its high hazard 

nuclear activities. 

Concerns with the manner in which nuclear material confinement was being implemented at several defense nuclear facilities across the complex led the Board to 

issue Recommendation 2004-2. This recommendation calls for active confinement 

ventilation for nuclear facilities with the potential for a radiological release. At 

LANL, an effective confinement strategy must be established for the Technical Area55 plutonium facility in response to this Recommendation, and to ensure that accidents do not result in radioactive material being released from the facility. An effective confinement strategy must also be established for the proposed Chemistry and 

Metallurgy Research Replacement facility in response to this Recommendation. 

23

The Board recently issued Recommendation 2005-1 to the Secretary of Energy, 

which concerns nuclear material packaging. This Recommendation resulted in part 

from plutonium-238 uptakes by employees at LANL that were caused by a packaging failure. The Recommendation calls for the development of DOE-wide criteria 

for packaging systems for nuclear materials. Implementation of this Recommendation will reduce the likelihood of a nuclear material release and subsequent worker 

exposure at all DOE sites, including LANL. 

Late last year DOE issued a draft Request for Proposal for the LANL contract. 

The Board reviewed this draft Request for Proposal with respect to provisions that 

affect safety. We concluded that it contained unnecessary and ill-advised limitations 

on DOE’s oversight of the contractor and undermined DOE’s system for identifying 

and implementing safety requirements. The Board has worked with DOE to correct 

this condition. The latest version of the Request for Proposal addresses the Board’s 

concern by preserving DOE’s system for identifying and implementing safety requirements, and by not limiting the ability of DOE to direct or oversee contractor 

activities in the safety area. 

In conclusion, the Board believes that the physical and programmatic safety improvements being pursued at LANL are needed, and that close oversight by both 

NNSA and the Board is required to ensure that needed improvements are realized. 

Thank you for the opportunity to report on the Board’s efforts and perspective relative to ensuring the adequate protection of public and worker health and safety 

at the Los Alamos National Laboratory. This concludes my prepared remarks.

Mr. WHITFIELD. Thank you very much, Doctor. 

Mr. Kilpatrick, you are recognized for 5 minutes. 

STATEMENT OF MICHAEL KILPATRICK 

Mr. KILPATRICK. Thank you. 

Mr. Chairman and members of the subcommittee, thank you for 

inviting me to testify today regarding safety and security at the 

Los Alamos National Laboratory. As mentioned, I am the Director 

of the Office of Independent Oversight and Performance Assurance, 

which is responsible for evaluating environment safety and health, 

emergency management, safeguards and security and cybersecurity 

functions for the Department of Energy complexwide. 

My testimony today will focus on our independent perspectives 

on the safety and security aspects of the LANL stand-down. Our 

perspectives are based on our recent assessments and, in particular, reviews that were conducted in calendar year 2004 following the stand-down as well as early in calendar year 2005. 

First, our safety perspectives on LANL. Our most recent comprehensive inspection of LANL’s integrated safety management 

program was completed in April 2002. At that time, we had concluded that LANL had made improvements in a number of areas, 

such as development of their integrated safety management program framework and documentation. However, more importantly, 

we had identified weaknesses in LANL’s implementation of their 

processes in a number of important areas, including procedure compliance and feedback and improvement systems for both DOE’s Los 

Alamos site office and the contractor organization. 

In accordance with our regular schedule, we had planned to perform an inspection of LANL in the August and September timeframe of 2004 to evaluate selected aspects of integrated safety 

management, including progress and correcting the deficiencies 

identified in the 2002 inspection. However, because of both security 

and safety concerns, as you are aware, site management had declared the stand-down of most activities on July 16, 2004. Because 

virtually no work would be ongoing during the timeframe of the 

planned inspection, we would not have been able to observe impleVerDate 0ct 09 2002 15:09 Feb 10, 2006 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 F:\DOCS\21634.TXT HCOM1 PsN: JOEP
24

mentation of safety requirements and thus our ability to do a performance-based evaluation of safety would be limited. 

At about the same time, the former Deputy Secretary of Energy 

Kyle McSlarrow asked us to temporarily step out of our normal 

role at Los Alamos. In doing so, he recognized the importance of 

resuming operations at Los Alamos as well as the importance of 

helping the site to more comprehensively identify and correct their 

problems. Based on the former Deputy Secretary’s direction, it was 

decided to defer the planned inspection and instead perform an 

‘‘Assistance Review,’’ which was intended to help the site office—

and by extension the laboratory contractor—to assess safety at Los 

Alamos. 

Our approach to the Assistance Review was to use our expertise 

to mentor and coach the Los Alamos site office and the laboratory 

and their staff and to provide additional perspective and advice 

based on our broad expertise and technical depth in conducting 

critical assessments across the DOE complex. 

We found that the resumption process was having a positive impact on improving safety performance by identifying a number of 

areas requiring LANL management attention and action and by 

more generally raising safety awareness across the laboratory. 

However, we also concluded that significant efforts remained to be 

completed and that sustained and continued management attention 

would be needed to improve site office and laboratory oversight and 

assessment processes, to improve compliance with requirements 

and procedures, to ensure that expectations are understood and implemented, to improve implementation of the integrated work management process, and to prevent recurrences of past problems. 

At the conclusion of the Assistance Review, most LANL activities 

were still undergoing validation and few had actually been approved for resumption. Since that time, Independent Oversight personnel have continued to monitor the progress of Los Alamos, and 

we understand that most activities have now in fact been resumed. 

The upcoming safety inspection now scheduled for September to 

November 2005 will evaluate the adequacy of actions taken by 

LANL to address safety deficiencies identified through the resumption process and the efforts by the National Nuclear Security Administration and the LANL site office in ensuring the effectiveness 

of the laboratory’s efforts. 

Turning now to our perspective on security at Los Alamos, our 

most recent comprehensive inspection was conducted in December 

2002. At that time, we had noted improvements in a number of aspects of LANL’s security, but we also identified weaknesses in implementation of requirements in such areas as unclassified 

cybersecurity as well as weaknesses in line management oversight 

by the Los Alamos site office. 

The problems with Classified Removable Electronic Media, which 

includes disks and other removable storage media—and I will refer 

to them as CREM for short—surfaced—or, actually, resurfaced in 

December 2003 when a LANL annual inventory revealed missing 

items. Personnel from the Office of Security and Safety Performance Assurance and NNSA personnel performed a review within a 

few weeks of that time and concluded that the most direct cause 

for the missing CREM was the failure of LANL staff to adhere to 

25

established procedures and the failure of CREM users, which mostly means scientists, to work with designated classified matter 

custodians. Subsequently, a number of other incidents involving 

CREM occurred at LANL, including the inability to account for a 

classified ZIP drive. DOE and FBI investigations of some of these 

incidents determined that classified information was not actually 

compromised, but, nonetheless, the incidents highlighted performance problems in accountability systems and compliance with requirements. 

Because of the number of these CREM incidents at LANL and 

other DOE sites, Former Secretary Abraham took aggressive action 

in July 2004, including a memorandum directing stand-down of all 

departmental classified operations involving accountable CREM 

and establishing a set of much more stringent requirements. Senior 

management also imposed criteria for resuming CREM-related activities, which included training, performance testing, validation by 

a local validation team, and approval by the former Deputy Secretary prior to resumption. 

Further, at the direction of the Deputy Secretary, Independent 

Oversight was asked to and completed independent validations of 

the implementation at critical facilities subsequent to their restart, 

primarily in the late 2004 timeframe. 

Independent Oversight’s initial post-start review of Los Alamos 

was performed in November 2004. At that time, LANL had resumed some but not all of their CREM operations. We identified 

significant improvements in the protection of CREM, but we also 

identified a number of weaknesses in implementation of the requirements by LANL. 

Because of these concerns, we conducted a follow-up validation 

review in March of this year, at which time the remaining CREM 

libraries were operating. We found that further improvements had 

been made, and most of the concerns from the November 2004, review had been adequately addressed. However, we continued to 

find weaknesses in some LANL facilities with regard to the adequacy of documented procedures, and we are currently in discussions with NNSA regarding the rigor and formality of the NNSA 

approval of some specific exceptions to departmental CREM policy. 

An Independent Oversight comprehensive inspection of LANL’s 

security is scheduled for the November-December 2005, timeframe. 

During this inspection we plan to take a hard look at CREM implementation as well as other important aspects of their protection 

strategy. 

In closing, Independent Oversight believes that the attention focused on LANL has resulted in significant improvements both in 

the safety and security arenas. However, the concerns are longstanding and the efforts to change a site culture are difficult, as 

evidenced by the initial deficiencies and implementation of these 

new DOE CREM requirements. While we believe that the recent 

DOE and NNSA actions have been aggressive and appropriate, continued management attention is warranted. Further improvements 

in LANL’s self-assessments and line management oversight by the 

NNSA and its Los Alamos site office are essential to sustaining the 

momentum and preventing future events. 

26

This concludes my prepared testimony, and I request that my 

written statement be accepted for the record. Thank you. 

[The prepared statement of Michael Kilpatrick follows:]

27


21634.001
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21634.002
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21634.003
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21634.004
31

Mr. WHITFIELD. Thank you. 

We appreciate the testimony of all of you. 

Administrator Paul, I find it ironic that, because of mismanagement at Los Alamos, there was incurred additional cost or costs of 

$120 to $363 million, roughly. A significant part of that money 

would have been spent on research, but because of the stand-down 

that was not done. So the government taxpayers are picking up 

this cost because of mismanagement. 

Now I was pleased to hear or to learn that the National Nuclear 

Security Administration on April 8 did send a notice to the University of California that they were going to disallow $14 million. Now 

that is a relatively small number when you consider the magnitude 

of the cost, and I would like to ask you, how did you determine it 

was only $14 million? 

Mr. PAUL. Let me first address your initial comment that it is 

shocking to you that all of the costs could not be recovered. The ultimate decision, the way these contracts are written, is made by a 

contracting officer, and there is the standard as to what is an allowable and is not an allowable cost. Unfortunately, at least the 

legal opinions that we have received so far have tended to indicate 

that these costs actually cannot be charged against the University 

but for a couple of exceptions relating to some small contractor 

claims, for example, and also for the first 2 days of the shutdown 

where apparently there was no work done whatsoever. 

Mr. Wilmot was involved at that exact time and actually issued 

the notice of intent time based upon some of the small contractor 

claims; and if the Chair would indulge me, I would like to have 

him provide a little bit more detail on the analysis that resulted 

in the exact figure of the $14 million, if that would be appropriate. 

Mr. WHITFIELD. That is fine. 

Mr. WILMOT. Mr. Chairman, I am the contracting officer for the 

Los Alamos contract. I also have two other contracting officers that 

support me in that. 

In making the determination, I consulted the Chief Financial Officer of the NNSA as well as my legal staff and the service center 

legal staff. The decision I had to make was, there was some question as to the reasonableness of the duration of the stand-down and 

had I made a determination that it was an unreasonable duration, 

then I could possibly have found additional unallowable costs. But 

my rationale that I used in making the determination was, since 

I participated on a daily basis and in effect made decisions every 

day about the duration of the activities, I participated throughout 

the period, and so my determination was—is that the length of the 

stand-down was reasonable. So that was the key decision I had to 

make. It this is based on interpretation of the contract language. 

Mr. WHITFIELD. Okay. 

Do you have a further comment, Mr. Paul? 

Mr. PAUL. Well, just that the actual standard itself, because you 

are asking the very questions that obviously I have asked myself 

when I first started looking at this, the standard apparently in the 

contracts, in all research and development contracts that we have 

in the government pursuant to an FAR clause, apparently there is 

a fair amount of specificity, guidance, requirements, given to you 

about what you can put in these contracts. The concept of a standVerDate 0ct 09 2002 15:09 Feb 10, 2006 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 F:\DOCS\21634.TXT HCOM1 PsN: JOEP
32

down like this is not directly referred to in the FAR, as I understand it, as the lawyers tell me, and it basically falls within the 

category of allowable costs. 

I understand your frustration with it. 

Mr. WHITFIELD. Thank you. I am also going to ask unanimous 

consent that we enter into the record this notice of intent to disallow these costs. If you will enter that in the record. 

Mr. PAUL. If I could supplement, Mr. Wilmot, could you point out 

where we are with that NOI. It is a 60-day determination. 

Mr. WILMOT. Yes. There is about 30 days remaining until the 

laboratory responds back. 

Mr. WHITFIELD. Mr. Paul, another question for you. 

In your testimony, you state that you believe that a culture of 

noncompliance existed within the laboratory, and you also stated 

this is a culture that we and laboratory senior managers are trying 

to reverse. 

Could you describe quickly, succinctly, what you think are the 

root causes for this culture of noncompliance that has come into existence at Los Alamos? 

Mr. PAUL. Well, I mentioned earlier I tended to concur with the 

comment that one of the members said earlier, that the blame cannot be laid to a single person, so I want to be careful to not fall 

into that trap, as the Congresswoman pointed out accurately. But 

it does come down to leadership, leadership of an organization that 

is the contracting organization, but also leadership of the government that is the overseer, over a long, long period of time. 

A culture is something, in my view, that is built up through past 

practices and patterns, conduct that is allowed, that is condoned, 

that is acquiesced to, over a long period of time. Leaders send signals that their subordinates receive very clearly, and they adjust 

their actions accordingly, and if leaders send messages that certain 

conduct is acceptable, then they are facilitating it. They are fostering it. They are breeding it. 

Mr. WHITFIELD. I guess it is easy to be complacent when you 

have been managing something since 1943, and you have never 

had to compete for it. 

Mr. PAUL. Exactly, so that is not to blame a particular person or 

a particular group of people, but a trend that has occurred over a 

long period of time. It is trend now to try to taking a particular 

person or particular group, but, quite frankly, the events that occurred I think are the byproduct of many years of atrophy, if you 

will, atrophy in seeking excellence, in expectations on the business 

side, the six factors that Mr. Friedman laid out. 

Here is the thing. We have got the best science in the world 

there. There is a standard of excellence when it comes to science. 

The toughest problems resolved by man on the face of the Earth 

happen on that plot of land by these great Americans, and they 

have done so for over 6 decades. But in terms of the management 

and the culture of compliance, we haven’t quite gotten to that 

standard of excellence. 

I think we, me, the guy you are looking at right now, shares 

some of that responsibility. I haven’t been here long, but every day 

that I am here, I am more responsible if it is not fixed. 

33

Mr. WHITFIELD. Mr. Friedman, in a recent report that you had, you had identified approximately $30 million of improper payments 

to the University of California and some contractors have reimbursed DOE for these inappropriate payments. 

Has the University of California reimbursed NNSA for any improper payments identified in this report? 

Mr. FRIEDMAN. First, Mr. Chairman, let me say that the $30 million I think you alluded to includes the three laboratories under 

the University of California. However, 50 percent of the money is 

applicable to Los Alamos, 40 percent to Livermore and 10 percent 

to Lawrence Berkeley national lab are tear. We mated a recommendation that those expenses be reviewed for cost allow built. 

We think they are highly questionable and should be recovered. 

But at this point, the decision, we have not gotten the decision 

from the Department, so therefore, to the best of my knowledge 

they have not been recovered from the university. 

Mr. WHITFIELD. So there has been no payment whatsoever? 

Mr. FRIEDMAN. To the best of my knowledge, that is correct. 

Mr. WHITFIELD. That is something still under review at this 

time? 

Mr. FRIEDMAN. Well, our responsibility is to make recommendations to the NNSA, which we have done. The ball is in the NNSA’s 

court on this issue at this point. 

Mr. WHITFIELD. Mr. Paul, do you want to respond to that, or Mr. 

Wilmot? 

Mr. PAUL. I am going to have to get back with you on that. I 

have seen some of the written explanations of those costs. I have 

to be candid with you and tell you I am not exactly sure what procedures we are taking to address that. I know that it is happening 

through the service center, and I just, if I could take it for the 

record and get back to you. 

Mr. WHITFIELD. I would appreciate you getting back to us on the 

exact status of that. 

Mr. Kilpatrick, you point out in your testimony that CREM management at Los Alamos resulted in a decision to order a shut down 

of all CREM operations at all DOE sites in order to conduct a full 

evaluation. 

Most weapons facilities like Sandia and Lawrence Livermore 

were able to restart their operations within a couple of Mondays. 

Why did the restart of the CREM operations take so much longer 

at Los Alamos? 

Mr. KILPATRICK. There are several reasons that contributed to it, 

not the least of which that it was an especially large undertaking 

at Los Alamos in that they both had a very large inventory of 

CREM items, numbering upwards of 80,000 items at one point. But 

also because of the decentralized and geographically disbursed nature of how it is that they manage their CREM. That latter factor 

is a lot of what contributed to the many problems that they experienced over the last few years, but notably in the early part of 2004. 

As a result of that, unlike some other sites, they basically were 

in a position where they had to step back and completely redesign 

a system and process for managing CREM, and hence the development of this concept of 20 centralized libraries, each of which required the development of not only institutional procedures, but liVerDate 0ct 09 2002 15:09 Feb 10, 2006 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 F:\DOCS\21634.TXT HCOM1 PsN: JOEP
34

brary-specific local procedures, training custodians and training 

users on those and putting in place all of the physical controls that 

were associated with that. 

The other thing that is worth noting is that, for good reasons, the 

deputy secretary actually imposed more stringent requirements on 

Los Alamos than what was imposed for the rest of the departmental sites and, in particular, the requirement to do daily inventories of CREM, which substantially complicated their resumption 

effort. 

Mr. WHITFIELD. Okay. Thank you. At this time, I will recognize 

Mr. Stupak for his question period. 

Mr. STUPAK. Mr. Chairman, I am going to defer to Ms. DeGette. 

She is catching a plan. I will defer to her. 

Ms. DEGETTE. Thank you so much for your comity, Mr. Stupak. 

I just have a couple of questions. Mr. Paul, the Chairman talked 

about your written testimony where you talked about the culture 

of noncompliance within the laboratory. Frankly, that is what I 

was talking about in my opening statement. 

You said in your oral testimony there is a group that finally gets 

it, and I guess you are referring to the management, because there 

is obviously to me a big group that doesn’t get it. I have the blog 

right here, and it is page after page after page after page of anonymous postings of people griping. Frankly, I have a daughter who 

is in high school. I am appalled, the level of these complaints are 

like high school student complaints. They are not like, the management is doing this particular thing that respects one of our highlevel nuclear facilities wrong. It is about, ‘‘Gee, I don’t like Nanos 

and I wish he would go to hell.’’ That is the level of complaining 

in this blog. Would you agree with that? 

Mr. PAUL. It is hard to disagree. 

Ms. DEGETTE. So here is my question: For the rest of you, have 

you all come across this same kind of culture of noncompliance? 

Mr. Wilmot, I know you are probably the closest to this on the 

ground. 

Mr. WILMOT. I have been through culture transitions both at 

Idaho and Savannah River, and I have seen instances where the 

culture has deteriorated and then had to regain momentum and 

improve. 

Ms. DEGETTE. Do you see that happening at Los Alamos right 

now? 

Mr. WILMOT. I see a small light at the end of the tunnel. The 

people I deal with in operations and facility management I think 

truly are what I think the group of people that Jerry is talking to 

when he sees they get it. So there is a group that operates the facilities and particularly the high hazard nuclear operations that 

really do get it. But there was brought up a mention of this recent 

accident in March, or incident in March, that is something I would 

be willing to talk more about. 

It seems to be something that is telling us that we still have got 

that serious problem. We still have it. But I would like to talk 

about that incident if indeed it were possible. 

Ms. DEGETTE. That is what we need to go into a closed session 

for? 

Mr. WILMOT. You don’t need to. 

35

Ms. DEGETTE. Maybe there might be some time in a few minutes. But my question to you really is, do you think that this culture that you have seen at other places and now you are seeing can 

be fixed at Los Alamos? 

Mr. WILMOT. Yes, ma’am, but it will take a considerable amount 

of time. I can say that my experience in Idaho was many years, 

and Savannah River was 5 to 7 years. 

Ms. DEGETTE. You will be pleased to know that we have been 

dealing with this for a great amount of time here, too, so how much 

more time is it going to take? Mr. Paul, do you have some sense? 

Mr. PAUL. Well, Congresswoman, let me be clear. My comments 

earlier were with respect to the ranking member’s comments that 

I had read or listened to some time back where he said he heard 

over and over and over that they finally get it, and I was simply 

pointing out that the people at this table testifying before you who 

have tried to tackle this situation, they get it. 

Ms. DEGETTE. You know what, I think you are right. When I visited with Admiral Nanos, I was very impressed. But you are not 

going to fix the situation until you change the culture, and I think 

all of you would agree, is there anybody here that doesn’t agree 

with that statement? All of you would agree with that. 

So here is my question, and that is what I was trying to get at 

with Mr. Wilmot, how do you change that culture with all of these 

anonymous people who are the ones supposedly doing this work? 

Mr. PAUL. I think some of the—it is going to be a spectrum of 

tools, some of which we have tried to exert already, the message 

that we sent through the adjustment of the fee, the pushing back 

on the allowability of the costs, the competition itself I think sends 

a message. But those things in themselves won’t do it. It is also 

going to require leadership, leadership on behalf of the government 

overseers, ourselves, IG, Defense Board plays an extraordinarily 

important role, SSA—that is independent oversight—and NNSA, 

but also the lab leadership. 

Ms. DEGETTE. Let me stop you there. Have we seen this kind of 

culture of contempt for safety and security at the other labs, like 

Sandia, Lawrence Livermore and Pacific Northwest? Have we seen 

those problems there? 

Mr. PAUL. I cannot tell you that there is evidence that it is exactly the same. Look, every facility has a different personality, a 

different culture. The culture of noncompliance that has resulted in 

the data that you have been monitoring for years now is somewhat 

unique at Los Alamos. I think everybody understands that. 

Ms. DEGETTE. So your answer would be no? 

Mr. PAUL. That is correct. 

Ms. DEGETTE. Okay. Part of the problem is, I think, we have to 

face that at Los Alamos, and we have to say, why is that? If we 

are not seeing that kind of culture at these other labs and we continue to see it at Los Alamos, no matter who the leader is of Los 

Alamos——

Mr. PAUL. That is right. 

Ms. DEGETTE. Every time, folks like you come to testify before 

us, you recognize the problem. So it is not just that, and you know 

this, it is not just at your level. 

36

Mr. PAUL. Just to put a finer point on it, you know, I run what 

we call the Leadership Coalition, a collection of our Federal site 

managers from every one of our facilities within NNSA, and we 

meet once every 2 months. For the last several meetings, we spent 

a pretty fair amount of the time in that leadership coalition where 

I sit in the middle of all of them and get each one of them to dedicate some of their FTEs, some of their resources to go to this one 

facility, to help it get better. 

So that, in a sense, answers your question. Yes, this one is different. I am pulling from all of them——

Ms. DEGETTE. Well, you know what, I don’t think you should 

take this personally, which you seem to be doing, because it is 

not—frankly, you understand that there is a problem. 

What I am getting at with you and Mr. Wilmot and others is, 

what do we do—when I was in Los Alamos talking to the relatively 

new management right after the shutdown last summer. They got 

it. They were working on it. Well, that has now been almost a year 

and not only have things gotten worse, not gotten better, they have 

gotten worst in some ways, because, as of June, July—I guess it 

was July when I was there last year—people didn’t yet hate Mr. 

Nanos like they apparently do now. So I don’t see the solution on 

the horizon. 

Maybe Mr. Wilmot has something. He did say he saw a little 

light. I am just hoping it is not a train coming toward you. 

Mr. WILMOT. I hope so, too. Let me just comment that I think 

that the solution is to carry the message and win the hearts of all 

of the members of the laboratory staff and convince them that this 

is truly an effort that if you improve your safety statistics and your 

operational capabilities, you don’t run plants to failure, you have 

efficient business systems, that this is going to benefit and it is 

going to free up more funding to allow them to do more science. 

Ms. DEGETTE. How do we convince them of that? 

Mr. WILMOT. Well, my sense is, during the restart, they felt like 

this was imposed on them rather than participating in it. So somehow we have got to reverse that feeling and create the ownership. 

Ms. DEGETTE. How do we do that? 

Mr. WILMOT. Clearly, it has to be a very strong message from 

management that they are listening. The scientists have a unique 

issue here, because they have very small laboratories. And it is 

very onerous for them to try to look at the regulations themselves 

individually for each small task they have. We have got to try to 

tailor our approach to this, which is something we haven’t done 

yet. 

Ms. DEGETTE. Can I stop you? Is that different than these other 

facilities? 

Mr. WILMOT. Actually, it is a little bit. At Savannah River, for 

example, we were a production plant. We had a small R&D facility 

there called Savannah River Technology Center. We had a unique 

issue to deal with that technology center, and it took a little longer 

there, because we weren’t sure how to get science more engaged in 

the conduct of operations and doing things in a manner that is 

more acceptable by our standards. 

37

Ms. DEGETTE. But what about the other comparable labs, 

Sandia, the ones I have mentioned? Is it so different at Los Alamos 

than at those labs? 

Mr. WILMOT. My truth is that the institution has failed its staff. 

They have failed to convey the message of the importance of these 

particular disciplines, like project management, conduct of operations and all of those necessary things that you have to have in 

today’s environment to run nuclear facilities. I believe the institution has failed its staff in getting the message to them and holding 

them accountable for those things. 

Ms. DEGETTE. The institution? Who? 

Mr. WILMOT. Me, too. I have been here a year now, and I am 

devastated by the accident—the incident that occurred in March. 

That is me. I own it. And what we have got to do——

Ms. DEGETTE. You know, the devastation continues year after 

year. I am empathetic with you. I think it is very frustrating. But 

I think it goes deep into the institutional ethos at Los Alamos. I 

don’t know what we do about it. I am not sure any of you do either. 

Mr. Chairman, thank you. 

Mr. WHITFIELD. The gentleman from Texas is recognized for his 

question period. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Maybe, if we could just continue on that line for just a moment 

and forgive me, because I am new, so these questions may sound 

naive. Mr. Wilmot, the institution has failed its staff. From what 

I am hearing here today, it sounds like you need new staff to me. 

That am I just being woefully naive in that assumption? 

Mr. WILMOT. Not at all naive, but I can assure you that every 

individual I have worked with, I have been very impressed with 

the people at the laboratory, and I have met a lot of good people. 

But my sense is, it is not an institution. They have not worked as 

an institution. There have been small groups. It was almost more 

like a university where you have small organizations. 

Mr. BURGESS. I agree with that statement. But it is a very serious business of our Nation’s nuclear program that they are running, not getting their own education. 

Mr. WILMOT. Let me just comment that the light I was referring 

to, what I have seen since about February, is what I consider to 

be an institution struggling to come together. I have seen it at the 

very top, at the director and deputy director level and the senior 

management team. I think my sense is that they are getting the 

message, but this does not happen overnight, because there are 

management systems that are not in place to help them to be an 

institution. 

Mr. BURGESS. Well, I know we are not supposed to go into sports 

metaphors, but they always say, you fire the coach because you 

can’t fire the team. I remember once down in Dallas when Don Nelson fired the team, and it actually worked out. I can’t help but 

think that might be part of your solution. 

I want to come back to you in a minute because you asked for 

some time to talk about the incident that happened on your watch. 

But, Mr. Friedman, if we could just talk for a second about—you 

talked about, I guess it sounded like some credit cards that were 

38

used inappropriately and some people actually are incarcerated because of that? 

Mr. FRIEDMAN. Yes, sir. 

Mr. BURGESS. And then the next paragraph you talked about 

some budgetary errors that looked a lot more significant, like the 

difference between the credit cards was $40,000 and the budgetary 

effort was $23 million. 

Mr. FRIEDMAN. $30 million actually. 

Mr. BURGESS. Did someone go to jail for the larger error, or have 

they, or will they? 

Mr. FRIEDMAN. Let me clarify one thing, Mr. Burgess, if I can. 

The purchase card, the total amount of purchases made by purchase card at Los Alamos is a very, very significant number. I don’t 

have it at instant recall, but it was in excess of $100 million a year. 

So it is not an insignificant amount of money. So violations, misuse 

of the purchase card, is a serious, serious matter, and I want to 

keep it in perspective. 

With regard to the other issue, there were miscalculations made 

at the time the contract was signed, and the taxpayers are going 

to foot the bill of about $30 million at this point, unless there is 

some further action taken. So I think it is a significant issue. 

Mr. BURGESS. Who is responsible for that further action? Is that 

our action here at this committee level? 

Mr. FRIEDMAN. The way we work under our charter, Mr. Burgess, is that I report to NNSA, and the contracting officer decides, 

to quote a phrase. And we have issued our report. We have taken 

a position on $30 million. It is over a 5-year period. It applies to 

all three laboratories, as I defined earlier, and the ball right now 

is in the court of NNSA to make a decision. 

Mr. BURGESS. Will you be so kind as to follow up with this committee in writing as to the disposition of that? Are you allowed to 

do that? 

Mr. FRIEDMAN. We, as a matter of course, without a request from 

you or the committee, we keep a constant watch on those recommendations and determinations as to how they have been resolved. 

Let me be very candid with you. We suspect, and this is not my decision, we suspect that $29 million of the $30 million, it probably 

is unlikely that the Department will decide to try to recoup that 

from the university. That is my guess, because there was agreement at the time of contract initiation. I don’t agree with that interpretation necessarily, but I think that is where the Department 

probably will come out. There is an additional $880,000, which is the third component, 

the third leg of this thing, we think clearly should be recouped 

from the university. 

Mr. BURGESS. Thank you. 

Mr. FRIEDMAN. It is unequivocal. 

Mr. BURGESS. Mr. Wilmot, use my remaining time——

Mr. WHITFIELD. I think Mr. Paul wanted to comment. 

Mr. PAUL. I beg your pardon. Just briefly, if I may, to respond 

to your earlier question about, whose responsibility is it? It is the 

NNSA, and we manage that contract through our service center. 

The colloquy I was having with the Chairman a little bit ago about 

39

the $30 million and our discrepancy, our chief financial officer at 

the service center is currently reviewing the Inspector General’s report and trying to determine what portion of that could be claimed, 

you know, as a charge. I don’t know the result of that. What will 

happen is, he will issue his recommendation. We will make a management decision. A management decision will be made through 

the contracting officer, who is the manager of the Los Alamos site 

for the Federal Government. That is Mr. Wilmot. So we will follow 

up and tell you where we are at with that process. 

I think the Inspector General is correct, that some of those decisions are, to some extent, burdened by the decisions that were 

made let’s say in early 2000. So we are working through that. 

Mr. BURGESS. Very well. 

Mr. Wilmot, if you would, let’s use what time I have left to allow 

you to discuss what you were trying to get to earlier. It sounds like 

the safety incident—my goodness, painters sent into the vault that 

had no special training—it almost sounds like premeditated assault 

to me. But, by all means, let’s hear what you have to say about 

that. 

Mr. WILMOT. Thank you. I do appreciate the opportunity. 

As I said, I was quite devastated by that. What I wanted to convey was that, as Mr. Paul had stated earlier, when we resumed activities at the end of January-early part of February and declared 

resumption started, we essentially had roughly 400 findings that 

we had to make sure and have corrective actions for or some sort 

of compensatory measure in place. 

Now, I didn’t have the staff to go out and validate all of that in 

the field, so we relied on the signature of an associate director in 

each of the organizations to sign off that, yes, barely, we had said 

what we were going to do. That is in February. This event occurred 

in March, early March. 

We asked the laboratory to do an investigation, to understand all 

of the things that went wrong in that particular event. In the 

meantime, I had an investigation team that went out and validated 

all of the corrective actions, these 400 or so findings—excuse me, 

the 400 findings that we validated. We found that only eight of 

those had not been validated or done as people signed off and said 

they had. 

Guess what? This organization that had this accident occur 

under its auspices was the one that I think actually even five of 

the findings were not—actually they did not correct them. 

Not that I feel good about it, but I just don’t want you to get the 

wrong impression about the overall resumption because of this. Because they said they had fixed them. When I came back and validated after the fact of the accident, of course, they had not done 

what they said they did, with the signature of an associate director. 

So that is why I am devastated. That is the concern to me. So 

everything that has gone wrong in the laboratory could be found 

in that report. It is that serious. Those management errors that are 

there are egregious, no question, sir. 

So, but the point to you is, and to the panel, is that I don’t want 

you to take away the message that we failed in resumption. I am 

not happy about what happened, believe me, but I do believe if that 

organization had implemented what it said it was going to do for 

40

resumption, we might not have had that incident. That was my 

point, and I thought it was very important for the subcommittee 

to hear that. 

Mr. BURGESS. Okay. What sort of accountability have you extracted from the individuals responsible? 

Mr. WILMOT. We have a conditional approval clause, just as I did 

for the laser accident or for the CREM incident. I am not saying, 

right now, I am going to do it, but I certainly have that available 

to me, and this is of that importance. What that allows me to do 

is, of the earned fee, I can take up to 100 percent of that earned 

fee away from them. 

Mr. BURGESS. I encourage you to do so. 

Thank you, Mr. Chairman. I yield back. 

Mr. WHITFIELD. Mr. Stupak is recognized for 10 minutes. 

Mr. STUPAK. When you say you can take up to 100 percent of 

their earned fee, that just means the lab loses some money, right? 

Mr. WILMOT. Yes, sir. 

Mr. STUPAK. What about the individual who failed to sign off? 

Mr. WILMOT. Honestly, one of the actions that the laboratory has 

committed to is to look into the personal practices of the individuals. 

Mr. STUPAK. So if you want accountability and you put the lab 

back on line and the associate director is supposed to sign off and 

you are led to believe they did, you go back and check, they didn’t, 

where is the accountability of this associate director who is supposed to sign off rather than punishing the lab? But not punishing 

the associate director? 

Mr. WILMOT. I will not second guess what the laboratory should 

be doing here, but I am certainly going to be watching their actions 

on this. I was on the airplane——

Mr. STUPAK. Wait a minute, let’s not be watching. We have been 

through this so many times. We get this all the time: I will be 

watching. Then you come and tell us another story, and this terrible accident happened in March, and it is a serious accident when 

you have radioactivity being leaked out and people being exposed 

to it. And we are just going to watch it? Where is the accountability? 

Mr. PAUL. May I? 

Mr. STUPAK. Sure. 

Mr. PAUL. If I may, Congressman, I think what Mr. Wilmot is 

saying is he doesn’t have the direct authority to take a direct——

Mr. STUPAK. Who does? 

Mr. PAUL. The laboratory is their employer. 

Mr. STUPAK. Who is the employer? UC? 

Mr. PAUL. That is correct. 

Mr. STUPAK. But isn’t your job to oversee it? Aren’t you supposed 

to be the management and director? Wouldn’t you be managing 

UC? 

Mr. PAUL. Exactly. And I think that is what Mr. Wilmot is trying 

to convey. 

Mr. STUPAK. So if UC is not doing it, then it falls on your hands 

then, correct? 

Mr. PAUL. Correct. 

41

Mr. STUPAK. So what are you going to do about this associate director? 

Mr. PAUL. I believe what Mr. Wilmot is saying is that the mechanism through which we can manage is through that employer 

down—when he says he is going to be watching it, I don’t think he 

means passively. He means that that is a criteria he is going to use 

when he makes his decisions about whether to meet out some 

other—about whether to invoke other options. 

I believe that is—I don’t want to lead the witness, but I believe, 

Congressman, that is what he is pointing out, not that we are 

going to passively watch this, but we have to stay within the 

bounds of law. 

Mr. STUPAK. Let me ask you this then: What is so special at Los 

Alamos that we go through this year after year, that what is being 

done in Los Alamos, why can’t it be transferred to other labs? In 

other words, why do we need Los Alamos? What is in the science 

that can’t be transferred somewhere else? 

We are moving some stuff up to Colorado. We moved some stuff 

to Lawrence Livermore. We have this—what—46-acre facility, and 

we get back here all the time with complaint after complaint after 

complaint. We are trying to change a culture? I guess we are not 

social scientists. 

How are we going to do this? Why do we have to have this lab, 

seriously? 

Mr. PAUL. A perfectly legitimate question. We ask that question. 

As good managers we have to ask that question about every single 

facility on a regular basis and justify everything we are doing with 

taxpayer dollars. 

We currently have a complex-wide study being conducted with an 

outside group to look at that very issue, what facilities are necessary for the defense nuclear complex of the future? We should receive by the end of June, I believe. I think we will have a written 

report by the end of June on that, and I am sure one of the 

issues—I haven’t read the report, obviously, but I believe one of the 

issues is an analysis of every single facility and what activities 

could be moved. 

You specifically asked Los Alamos. There is some unique infrastructure there that would be very expensive to move and very difficult to move. Just the environmental impact statement alone on 

moving the Legacy Research Facility that has existed for the 

United States of America for over 60 years, the IS alone on that 

would be the biggest one ever in this country. It would be significant, facilities like DARHT and TA-55 and CMR. 

Mr. STUPAK. Hopefully, we will get to the point in this country 

where we don’t need all of these nuclear labs. So if we have so 

many problems with this one lab and if the work can be transferred to the other labs, why not do it? 

Mr. PAUL. I think when we get the complex study, there will be 

an opportunity—we all look forward to that complex study, and I 

know from your interest in these issues, you will, too. 

Mr. STUPAK. But I don’t want to know about consolidating government services. I am saying we have a lab here that is a constant problem, that is costing us $30 million here. Let’s see, shutdown was $119 to $300-some million it was estimated. We are not 

42

quite sure yet. You have objected to the $14 million. $119 was the 

low end. $367 I think was the high end. So take away $14 million, 

so it is $357-some million it cost us. We talk about $30 million here 

on charge cards that people can’t sort of account for. 

Why do we need this one then? Why can’t we transfer those 

things out of here? The science? Is there any really unique science 

that can only be done at Los Alamos and nowhere else? 

Mr. PAUL. I think you have to have a national laboratory. If you 

are asking me——

Mr. STUPAK. We have a couple more, we have Lawrence Livermore, right? Sandia. 

Mr. PAUL. There has historically been a thought that peer review, that having more than one adds a lot of value to big science. 

You have to have that intellectual tension, if you will, that peer review. One lab doesn’t do it for you. 

Mr. STUPAK. We have four of them besides Los Alamos, don’t we? 

Sandia, Lawrence Livermore, Brookhaven, GNNC. 

Mr. PAUL. Certainly, the concept of moving a laboratory to another facility is not beyond the ability of man to analyze, and we 

will look into this. 

Mr. STUPAK. How do you change this? This is all these blogs. I 

just looked at one of them. Look at that: ‘‘Roger that to the petition.’’ in other words, this person wants Mr. Nanos gone. ‘‘you can 

understand that phrase, can’t you, Mr. Nanos? I can’t call you director or doctor because I can only do this if I respect the person 

and the position for which they hold and perform.’’ this person obviously doesn’t. 

So you can’t change that. You are not going to change this person. His mind is made up. And you can go through 46 pages here 

of them, and they are all sort of like this. 

Mr. Burgess is right. You can’t fire the team, and we can’t. But 

maybe we can transfer the science, and they can transfer if they 

are interested in working for the government and doing the job. 

And if they are honorable people, as they claim they are in these 

blogs, they will continue their research somewhere else. 

What is wrong with that? Maybe we won’t be back here next 

year, and again and again and again. I haven’t been here that long. 

I have been here 13 years. I have been 12 years on this committee, 

and every year, I am here getting the same thing. I always get all 

these nice answers that it is leadership. It is management. It is 

this. It is that. 

I am just saying, why do we have to have this place any longer? 

Can anyone really tell me what is so unique that we can’t do anywhere else what we are doing at Los Alamos? 

By your silence, I take it there is nothing that we couldn’t transfer somewhere else and still keep our national security and our research and that all done, right? 

Mr. PAUL. Look, anything that man does, he can undo. I don’t 

want to reduce this to philosophy, but anything man does, he can 

undo. I mean, the rhetorical question, could you move something 

from one place to another, I guess theoretically you can. 

This particular facility, this particular lab and the facilities that 

are there, could you move everything there into the desert somewhere——

43

Mr. STUPAK. I am not talking about desserts. Why can’t we move 

it to other labs? 

Mr. PAUL. You could certainly do a cost-benefit analysis of doing 

that, and I think that is exactly what we are studying. That is the 

message I am trying to convey to you. I am trying to violently 

agree with you, that we need to be looking at all of these issues, 

and that is indeed exactly what is being done as to every single facility, trying to look into the future at what are the critical missions for this complex, how do they need to be done and what are 

the locations where we would need to do them. 

Mr. STUPAK. And have you identified any critical mission that is 

being performed at Los Alamos that can’t be done somewhere else 

in the United States by one of our labs or the military? 

Mr. PAUL. Well, when we see the complex study, we will have a 

better handle on that. 

Mr. STUPAK. Okay. If we can, the decision was made last year 

to shut down all the operations at the lab, and this decision was 

ordered by Mr. Nanos and, ultimately, may have cost taxpayers 

millions of dollars. In retrospect, was this a good decision, why or 

why not, and would Los Alamos have been shut down, for example, 

by NNSA had this not been ordered by the director? Can you give 

me your opinions on that? 

Mr. PAUL. I can tell you that even prior to the shutdown, NNSA 

was having discussions with the director about doing it itself based 

probably more on safety grounds than on security. But, certainly, 

they both played into it. 

The decision to stand down itself we stand by. I think this committee and the committee chairman has stated that he stands by 

that decision as well. The question of duration, it indeed took 

longer to resume, to stand back up, about twice as long than what 

was expected. 

This organization believed that it was better to do it right than 

to hold to a particular time line. A very serious undertaking here 

to go through that level of reform, what we are trying to do here, 

3,000 findings, it was very difficult, and it did take a heck of a lot 

longer. 

The management system is a business. They atrophied so bad, 

Congressman, you just didn’t have an infrastructure in place, and 

you had to create it out of whole cloth in a lot of ways. And it just 

took longer. 

Mr. STUPAK. You agree with this decision to shut her down? 

Mr. PAUL. Yes, at that stage, I think it had to be done. 

Mr. STUPAK. Mr. Wilmot, you agree it had to be shut down? 

Mr. WILMOT. I had discussions with the director and the deputy 

director about a rolling shut down at one time, and I actually gave 

him a draft paper of my concerns. Yes, sir, I do. 

Mr. STUPAK. Mr. Friedman, do you want to add anything? Dr. 

Eggenberger? 

Mr. EGGENBERGER. Yes, I will add a little bit. The Board does 

nuclear safety at defense nuclear facilities only, so some of these 

issues that we are talking about we don’t——

Mr. STUPAK. Would not be in your area, right. How about from 

your area? 

44

Mr. EGGENBERGER. From our area, if the Board would have 

thought that there was an eminent threat to health and safety, we 

would have recommended to the Secretary of Energy to shut it 

down. We did not do that. 

Mr. STUPAK. Okay. Do you think Mr. Nanos was correct in shutting her down or doing a rolling shutdown as it was thought of, or 

do you think—what do you think on that? 

Mr. EGGENBERGER. You talked about the program of resumption 

and listed the items. That program had started before the shutdown. It was in its infancy. And as far as our individual concerns 

that I had mentioned in my summary, most of those, with a few 

exceptions, were rolled up into that program. So we believed that 

our interests were being taken care of if that program were implemented in a proper sense. 

To back up a little bit, the laboratory generally is very good at 

responding to our concerns and understanding our concerns and 

putting together a plan to address them. They are generally very 

good at that. The issue that generally comes up is the implementation, and implementation, in our view, is the responsibility of management at the laboratory and it is also the responsibility of the 

oversight by the Department of Energy. If that was done properly, 

we saw no reason why the laboratory could not continue on. 

Now, one other thing that I would like to mention is, in 2004, 

we wrote to the Secretary a recommendation, and it is called Recommendation 2004-1. 2004-1. The Secretary has accepted that. And 

what that recommendation says or the requirements in it are that 

the Department of Energy take a more proactive role at headquarters in their interactions with their site offices such that they 

can understand and implement the safety programs that they have. 

Now, I am talking from a safety point of view. 

Mr. STUPAK. Let me ask you this then on the safety program, 

DOE’s Office of Environment, Safety and Health issued proposed 

industrial and construction worker safety regulations in January 

2005 in response to the Defense Authorization Act of 2003. They 

were intended to parallel the Price-Anderson nuclear safety regulations. 

But tucked into this, put out by DOE safety regulations here, 

were 10 separate exemptions to these rules, none of which were authorized by Congress and not part of the OSHA regime. 

Some of us feel that many of these exemptions are going to usurp 

the rules put in place. Are you saying that the Board agrees with 

this approach? Could these exemptions actually lead to a reduction 

in current levels of worker safety there? 

Mr. EGGENBERGER. My understanding is this is outside the nuclear safety regime and is in the safety regime that more addresses 

the OSHA-type items. 

Mr. STUPAK. But it also deals with the nuclear, like that vat they 

were cleaning out there with the release of the radiation and the 

paint chips and all that that I spoke about in my opening. That 

may be OSHA, but you have to have a technician trained in handling radioactive material in order to do it. And when you put 10 

separate exemptions on nuclear safety regulations, it may be 

OSHA, but it came from the Board. So is the Board more concerned 

about complying with OSHA than safety regulations? 

45

Mr. EGGENBERGER. That didn’t come from us. 

Mr. STUPAK. DOE’s Office of Environment, Safety and Health. I 

know it is not you, but you were just talking about it. You were 

just talking about DOE’s Office of Environment, Safety and Health. 

So I thought maybe you knew something about this. 

Mr. EGGENBERGER. No, I am talking about nuclear safety and 

implementation of nuclear safety, which is a line operation that 

runs from the Secretary to the NNSA chief down through the line 

down into the sites and results in the overseeing of the laboratories. 

Mr. STUPAK. Mr. Chairman, you have been more than kind. 

Thank you very much. 

It seems like we just keep going around and around here. But 

this is a lab involved with nuclear research. We are not making 

Rice Krispies here. I really wish we would either fix this lab or end 

it. I just don’t see much future, other than more hearings for us. 

Mr. WHITFIELD. Just to follow up for one moment here, you referred to a complex study in which are looking at alternatives and 

options available. When do you expect this study will be completed? 

Mr. PAUL. Chairman Hobson had actually put language in the 

last Defense Authorization Act requiring this complex study. NNSA 

was on its way to creating it at the time. The original deadline I 

believe was the end of April. 

It was difficult to assemble the exact collection of people with the 

right qualifications to perform that study, so it didn’t get started 

until a little bit later than what was anticipated. 

To answer your question, I believe that Chairman Hobson has 

said he was going to relax the due date on that for an oral presentation. I am not totally sure, but I think an oral presentation at 

the end of May and a written at the end of June. I don’t think a 

final decision has been made on that. 

Within the next couple of months, I believe we are going to see 

the complex study which truly takes a holistic analytical approach 

to looking at every single facility within the NNSA complex and 

trying to match that up with a NNSA of the future and come up 

with some different options for condensing, consolidating and really 

analyzing what the footprint should be and where. 

Mr. WHITFIELD. So one possible option would be what Mr. Stupak suggested, that some research could be transferred elsewhere? 

Mr. PAUL. I want to be very careful here, because I have not had 

that specific discussion with any member on the complex study, but 

my understanding is they are looking at all options. 

Mr. WHITFIELD. Okay. We will certainly be interested in looking 

at the results of that study. 

One other thing I would like to do, this is the corrective action 

performance report dated April 27, 2005, which basically shows 

that the University of California is already behind on 92 post-start 

corrective actions contained in the corrective action plan. This document breaks down Los Alamos by division, and you will find on 

page three here that the manufacturing systems and methods division accounts for a total of 43 of the 92 corrective actions thus far. 

I would just ask you directly, Mr. Wilmot, can you explain what 

the manufacturing systems and methods division does? And why is 

46

it so far behind on its corrective actions? And I am asking unanimous consent to enter this performance report into the record. 

Mr. WILMOT. I would ask that I be able to provide that in detail 

in a written comment to you. I think that would be better serving 

your time. 

Mr. WHITFIELD. Okay. That will be fine. Anyone else have any 

questions? 

Mr. Burgess? 

Mr. BURGESS. Dr. Eggenberger, just a brief follow up on your testimony. You talked about fire protection upgrades must be completed. I guess these were not completed by the University of California. They excluded the fire protection management from their 

post-restart corrective action plan. Is that right, and should that 

have been in there? 

Mr. EGGENBERGER. I will comment on that a little bit, if you will 

permit me. 

Mr. BURGESS. I wish you would. 

Mr. EGGENBERGER. As I mentioned to the ranking member, the 

OE project was in development prior to shut down, and it addressed most of our things. Now, at one time, my understanding 

is the fire protection program was in the operational efficiency 

project, and as they redid that and finalized it, they decided to take 

the fire protection out of that because it was basically to be done 

by one separate department and that they would handle it that 

way. 

Now, it isn’t that fire protection is out. It is still in, but it is not 

being handled as part of the operational efficiency program. So our 

understanding is those items are still being done at the laboratory. 

So it isn’t lost. 

Mr. BURGESS. Very well. 

On the issue of the slow pace of efforts to stabilize nuclear materials at Los Alamos, specifically the University of California—I am 

still with you, Mr. Eggenberger—I believe the University of California has extended the original plutonium stabilization date from 

2002 to 2010 at an additional cost of $78 million. 

Why is it important that the University of California accelerate 

plans to stabilize nuclear materials, and are there risks to workers 

if these stabilization plans are not accelerated? 

Mr. EGGENBERGER. This stabilization of excess materials began 

in 1994, at the laboratory under our Recommendation 94-1, and at 

that point in time, we asked around the complex that actions be 

taken to stabilize those materials which caused the most risk to the 

people and to the workers. 

At Los Alamos, they did that, up to a point. They did the highrisk items, and then there was what was left. What was left was 

then prioritized again, and in our view, the highest risk of what 

was left was at the end of the line rather than bringing it up to 

the first. 

They have redone that and brought the high-risk items up. And 

given the budgets and given the risk, since it is going down as we 

proceed out, we believe that the schedule is reasonable to go until 

2010. 

One other, as far as other risks, are that buried in the 

transuranics, I guess it is TA-54, I mentioned the Quick to WIPP 

47

Program, which removes those and gets them down to the Carlsbad 

facility. That is going again, and it is not quite as fast, I believe, 

as DOE would like it to be, but it is on the way. And there is a 

lot of effort being put in by NNSA to continue on that. So, we are 

reasonably happy with that. 

Mr. BURGESS. Very well. In the brief time I have left, Mr. Friedman, do you have any thoughts that you would like to share with 

us? 

Mr. FRIEDMAN. Well, I have been looking at Los Alamos for a 

long time, Mr. Burgess, and I share the frustration with the members of the subcommittee as to making progress. 

I suspect—I do want to comment, probably the smartest thing for 

me to do would be to stay out of the line of fire, but let me indulge 

my passion for danger. 

Mr. Stupak, to go back to a point you made earlier, I have audit 

inspection investigation responsibility for the entire departmental 

laboratory system, including the other weapons laboratories and 

the science laboratories and others. And no one should—there are 

14,000 people working at Los Alamos, and you may have a few 

bloggers, a number of bloggers, who may be expressing personal 

angst. And that is legitimate. They have a right to do so. But the 

vast majority of people there are extraordinarily dedicated, Nobel 

Prize winners, Enrico Fermi Prize winners. They are an extraordinary group of people. 

I am not suggesting they can’t be moved, the function couldn’t be 

moved. It probably could be physically, but they are an extraordinary group of people. And my job is actually going out and being 

a critic, and here I am saying something in support of them and 

in support of the mission. 

To compare Los Alamos and say it is imperfect with the other 

labs being perfect would not be a correct characterization. There is 

no doubt that we have a more disproportionate number of problems 

from an IG perspective at Los Alamos than any other laboratories. 

However, there are problems that exist across the complex, 

throughout the laboratory system, and it may be in part inherent 

in dealing with large numbers of scientists, who are very dedicated 

people but may not have a commitment to business systems that 

we would like to see in the normal course of action. 

But it would be unfair, I think, to simply say these people or this 

operation is impure and the others are pure. There are problems 

throughout the complex, many of which mirror perhaps at a lesser 

intensity the problems that you find at Los Alamos. 

I appreciate your giving me the opportunity, Mr. Burgess. I 

wanted to clarify that point. 

Mr. BURGESS. Thank you. 

Mr. WHITFIELD. Mr. Stupak. 

Mr. STUPAK. Now I do have a question. Then how do you fix it? 

Really? Seriously. I don’t want leadership. I don’t want management. How are you going to fix it? Either fix it or close it. This is 

just crazy. 

Mr. FRIEDMAN. Mr. Stupak, I have appeared before you on several occasions, and we have had animated discussions. 

Mr. STUPAK. I get animated about this stuff. I mean, there is so 

much duplication in our labs. If you take a look the budgets and 

48

that, there is a lot of duplication. I don’t think we need all of this. 

And every time we come here, it is a couple of hundred million, a 

couple hundred million there, a couple hundred million there, and 

no one is accountable. 

You know, 12 years ago, I was the one talking about, there seems 

to be this culture out there—I had been out there a couple of 

times—about noncompliance; we will do it how we think it should 

be done, The heck with rules, regulations, Congress and everything 

else. 

Now, today, the witnesses were using the word ‘‘culture.’’ and unless you are going to get some social people, social engineers, whatever you want to call them, out there to fix this place, let’s close 

it. 

Really, seriously, I really believe if you move one or two tasks 

out of Los Alamos, they will get the message. Either clean her up 

or we will shut her down. I don’t know what else to do. At least 

that is an idea. You guys got any idea on how you are going to fix 

this, other than new management? 

Mr. FRIEDMAN. Well, let me say this: I respect your point of view 

on this. There has been no issue, no action that has been taken as 

momentous and as earthshaking in the 20-plus years that I have 

been looking at Los Alamos and indeed the laboratory system than 

recompeting this contract. And that may well be the defining moment as to whether Los Alamos can be salvaged in a way that 

would satisfy you and the other members of this subcommittee and 

others throughout society. 

Mr. STUPAK. So, I mean, what would a new manager do different? Let’s say, give it to the University of Texas. Since the 

Chairman is from Texas, we will give it to that university. Well, 

Mr. Burgess, you are from Texas. I would rather see it go to the 

University of Michigan. 

But let’s say, give it to Michigan, give it to the University of 

Texas; what really is going to change? 

Mr. FRIEDMAN. Well, Mr. Stupak, if I knew the answer to that, 

I would be bidding on the contract, proposing on the contract myself. It is going to be the responsibility of all the proposers. And if 

the University of California proposes as well to come up with a proposal that is comprehensive, complete, represents a change from 

the status quo, in my business—I am in the business of advocating 

change, not accepting the status quo. That is the business I am in. 

And the status quo at Los Alamos is unacceptable. I don’t think 

there is any question about that. 

So if I were on the panel that evaluates the proposals that the 

NNSA will be receiving, I would be looking for innovation, substantive, significant, deep-seated innovation in the way that Los 

Alamos goes about its business, as a primary criteria for making 

the decision as to who will manage Los Alamos for the next 7 years 

or decade or whatever the case might be. 

Mr. STUPAK. I just think, if you have a model—You know, I am 

from Michigan, so we know about cars. If you buy a model, year 

after year, you buy an Oldsmobile, and it keeps breaking down, 

keeps breaking down, keeps breaking down, you don’t go back and 

keep buying an Oldsmobile. Sooner or later, you go buy maybe a 

49

Buick or maybe go buy a Datsun. I don’t know what the heck you 

buy. 

But it just seems to me that we are just repeating the same old 

things. And I don’t see anything so unique and exclusive to Los Alamos that it can’t be done somewhere else. If we’ve got this problem for I don’t know how many years it has been now—I have only 

been here 12 years. I hate to see, like Mr. Dingell has been here 

forever, and he has got much more frustration than I have. 

Mr. WHITFIELD. I do think it is significant that we do have an 

RFP out there, and we cannot afford the status quo anymore. 

I would ask also unanimous consent that we keep the record 

open for 7 days for any members who have opening statements. I 

would also ask unanimous consent, our staff submit to the NNSA 

three questions relating to removal of material at TA-18, material 

at TA-55, and another question relating to Los Alamos TA-18, additional questions. You all submitted answers. So I am asking unanimous consent that we enter this into the record as well. 

With that, this meeting, this hearing——

Mr. STUPAK. Could I ask one more question? Do we have any 

blogs in support of Mr. Nanos? We don’t, do we? 

Mr. FRIEDMAN. No, no. 

Mr. STUPAK. We do? 

Mr. FREIDMAN. I am not in the blog business. I have been accused of a lot of things, but not that. There are people who have 

entered the blog system in support of Dr. Nanos, yes. 

Mr. STUPAK. I didn’t want just the negative blogs in there. 

Thanks. 

Mr. WHITFIELD. This concludes today’s hearing. Thank you very 

much for your time and testimony. Of course, we will be having another hearing with the University of California and a whistleblower 

panel. 

[Whereupon, at 4:09 p.m., the subcommittee was adjourned.]

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