Los Alamos National Laboratory: Long-Term Strategies Needed to Improve Security and Management Oversight
Published: 2008-06-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 2006, a Los Alamos National Laboratory (LANL) contract employee unlawfully removed classified information from the laboratory. This was the latest in a series of high-profile security incidents at LANL spanning almost a decade. LANL conducts research on nuclear weapons and other national security areas for the National Nuclear Security Administration (NNSA). GAO was asked to (1) identify LANL's major programs and activities and how much they rely on classified resources; (2) identify initiatives LANL is taking to reduce and consolidate its classified resources and physical footprint and the extent to which these initiatives address earlier security concerns; and (3) determine whether its new management approaches will sustain security improvements over the long-term. To carry out its work, GAO analyzed LANL data; reviewed policies, plans, and budgets; and interviewed officials.
section_title: What GAO Found
paragraphs: With fiscal year 2007 budget authority of about $2.7 billion, LANL conducts work on over 175 programs that can be grouped into three major program categories--Nuclear Weapons Science, Threat Reduction Science and Support, and Fundamental Science and Energy--and two support program categories--Environmental Programs and Safeguards and Security. Respectively, LANL's major programs serve to ensure the safety, performance, and reliability of the U.S. nuclear deterrent; support nonproliferation and counterproliferation efforts; and address energy security and other emerging national security challenges. LANL's Nuclear Weapons Science programs are the primary users of the facilities housing classified resources. For example, the Nuclear Weapons Science programs are the primary users of 14 facilities that store special nuclear material while LANL's other major programs are the primary users of only 7 such facilities. LANL has over two dozen initiatives under way that are principally aimed at reducing, consolidating, and better protecting classified resources, as well as reducing the physical footprint of the laboratory by closing unneeded facilities. While many of these initiatives address security concerns identified through past external evaluations--such as efforts to consolidate storage of classified documents and media into fewer secure facilities and to destroy unneeded classified nuclear weapon parts--significant security problems at LANL have received insufficient attention. Specifically, LANL has not implemented complete security solutions to address either classified parts storage in unapproved storage containers or weaknesses in its process for ensuring that actions taken to correct security deficiencies are completed. LANL intends to use three management approaches to sustain the security improvements it has been able to achieve to this point over the long-term: (1) undertake management actions required of LANL under the Compliance Order issued by the Secretary of Energy as a result of the 2006 security incident, (2) develop a Contractor Assurance System to measure and improve LANL's performance and management, and (3) implement annual performance evaluation plans NNSA uses to measure LANL's performance and determine a contract award fee. These approaches contain weaknesses that raise doubts about their ability to sustain security improvements over the long-term. Specifically, the actions LANL has proposed to take to meet the terms of the Compliance Order are only short-term--with completion planned for December 2008. Further, according to LANL officials, the Contractor Assurance System is not fully deployed and the measures it includes may not be fully effective. Finally, the annual performance evaluation plans do not sufficiently reward improving long-term security program effectiveness.

section_title: Letter
paragraphs: Los Alamos National Laboratory (LANL), located in Los Alamos, New  Mexico, is one of three national laboratories responsible for designing and  developing a safe, secure, and reliable nuclear weapons deterrent. In  addition to its nuclear weapons work, LANL also serves as a focal point  for nonproliferation and threat reduction activities, as well as chemical,  biological, and physics research. To carry out its programs, in fiscal year  2007 LANL had total budget authority of about $2.7 billion, with about $1.5  billion devoted to nuclear weapons work. It employs about 13,000  employees on a campus that covers approximately 40 square miles and  has 2,700 structures. LANL is overseen by the National Nuclear Security  Administration (NNSA), a separately organized agency within the  Department of Energy (DOE). NNSA is responsible for the management  and security of the nation’s nuclear weapons, nuclear nonproliferation,  and naval reactors programs.
To carry out its various missions, LANL employs a variety of classified  resources, including, among other things:    Category I special nuclear material, such as plutonium, which it uses to  manufacture parts for nuclear weapons and for research and development  activities;   millions of classified documents;    over 4,300 pieces of classified removable electronic media, such as CDs  and removable hard drives, which pose a security risk that requires the  maintenance of an accountability system to prevent unauthorized access  or removal;    about 60,000 classified parts used in nuclear weapons or for research and    111 vault-type rooms that house or store classified documents and  classified removable electronic media, classified parts, and classified  computer network infrastructure; and  five computer networks, one of which handles classified information.
DOE requires that LANL maintain different levels of security for its  facilities depending on the type and amount of classified resources these  facilities store or house. The most basic level of security, known as a  Property Protection Area, provides safeguards to protect government  property against damage, destruction, and theft. These safeguards include,  for example, locks and keys, security guards, and signs prohibiting  trespassing. Classified resources may not be stored or housed in these  areas. The highest levels of security, known as Exclusion Areas, Protected  Areas, and Material Access Areas, provide safeguards to protect quantities  of Category I and II special nuclear material. These safeguards include, for  example, boundaries defined by fences and sensors that detect intrusion,  personnel and vehicle access controls and barriers, armed guards, and  alarms. In addition, some facilities, known as Sensitive Compartmented  Information Facilities, provide additional controls governing access to  classified intelligence information beyond those required by normal  management and safeguarding practices.
Since 1999, LANL has experienced a number of high-profile security  incidents that were subject to congressional hearings. Many of these  incidents have focused on LANL’s inability to account for and control  classified resources, as the following illustrate:  In 1999, a scientist transferred classified information from classified  computers onto unmarked disks and removed the disks from authorized  work areas.
In 2000, two hard drives containing nuclear weapon design information  used by the Nuclear Emergency Search Team were temporarily lost.
On several occasions in 2003 and 2004, the laboratory could not account  for classified removable electronic media.
In October 2006, it was discovered that a contract employee had  transferred classified information to a USB “thumb drive” and removed the  thumb drive, as well as other classified documents, from the laboratory.
In addition to these well-publicized incidents, security evaluations by  DOE’s Office of Inspector General, DOE’s Office of Independent  Oversight, NNSA’s Los Alamos Site Office (Site Office), and GAO have  identified persistent, systemic security problems at LANL. These problems  include weaknesses in controlling and protecting classified resources,  inadequate controls over special nuclear material, inadequate self- assessment activities, and weaknesses in the process LANL uses to ensure  that it corrects identified security deficiencies. For example, DOE’s Office  of Independent Oversight and the Site Office recently cited LANL for  weaknesses in its control and accountability system for special nuclear  material, including unreliable accounting when quantities are moved  within a facility. In addition, DOE’s Office of Independent Oversight, the  NNSA Site Office, and the DOE Inspector General identified problems with  LANL’s management of classified parts, including inadequate tracking and  storage of these parts. In July 2007, the DOE Office of Inspector General  found that LANL was still not tracking all of its classified parts and that it  lacked fundamental safeguards, such as regularly scheduled inventories  and segregation of duties, to ensure full and accurate accountability.  Finally, in January 2008, we reported that LANL has experienced 57  reported security incidents in recent years involving the compromise or  potential compromise of classified information and that 37 of these  incidents posed the most serious threat to U.S. national security interests.
In response to these repeated problems, LANL and NNSA have taken a  variety of actions. For example, in 2004, the laboratory director shut down  operations for up to 10 months to deal, in part, with LANL’s security  problems. In November 2005, we reported that the estimated cost of this  shutdown was as much as $370 million and that the shutdown delayed  important national security work. In addition, in 2005, after half a century  of laboratory management by the University of California, DOE opened the  LANL management and operating contract for competitive bidding. In  December 2005, Los Alamos National Security LLC (LANS), which is made  up of the University of California, Bechtel National, Washington Group  International, and BWX Technologies, was awarded the management and  operating contract for LANL. NNSA measures LANL’s performance and  determines LANS’s management and operating award fee using annual  performance evaluation plans, which establish NNSA’s priorities for LANL  and ensure that contract requirements are met. After taking over  management of the laboratory in June 2006, LANS began a series of  initiatives that it believed would address security in a comprehensive and  integrated manner—including consolidating its classified resources and  reducing the scope of its physical footprint. The new Contractor  Assurance System, which LANL is contractually required to implement,  provides the laboratory with a means of assessing its progress toward  meeting performance milestones, including security performance, and  bringing management attention to areas of concern. In July 2007, in  response to the October 2006 security incident, the Secretary of Energy  issued a compliance order directing LANL to implement specific  corrective actions to remediate management deficiencies that contributed  to the October 2006 incident, as well as to address long-standing  deficiencies in the laboratory’s classified information programs.
In this context, you asked us to (1) identify LANL’s major programs and  activities; (2) determine the extent to which the major programs and  activities rely on classified resources to meet their objectives; (3) identify  the initiatives LANL is taking to consolidate its classified resources and  reduce the scope of its physical footprint; (4) determine if these initiatives  address previously identified security concerns; and (5) determine  whether new management approaches that LANL and NNSA are  implementing under the new contract will sustain security improvements  over the long-term. Separately, we are evaluating cyber security across the  DOE complex, including at LANL, and therefore did not include an  assessment of the effectiveness of LANL’s cyber security program as part  of this review.
To address these objectives, we analyzed documentation on DOE and  LANL budgets, programs, and activities; documentation on LANL’s  classified resources and physical footprint reduction and consolidation  plans; NNSA Site Office security surveys and Office of Independent  Oversight security assessments from fiscal years 2000 to 2008; the LANS  management and operating contract; LANL’s Contractor Assurance  System; DOE’s 2007 Compliance Order; and NNSA’s performance  evaluation plans for fiscal years 2007 and 2008. We also collected data on  LANL’s programs in order to group them into categories and to identify the  facilities and classified resources associated with these program  categories. We performed a reliability assessment of these data and  determined that they were sufficiently reliable for the purposes of this  report. Further, we conducted three visits to LANL and toured sites  proposed for consolidation, as well as vault-type rooms. Finally, we  conducted interviews with key security and program officials at LANL,  NNSA and its Site Office, DOE, and LANS. More details on our scope and  methodology can be found in appendix I.
We conducted this performance audit from March 2007 to June 2008 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
subsections: section_title: Background
paragraphs: LANL is organized in a matrix that allows programs to draw on scientific,  engineering, and experimental capabilities from throughout the laboratory.  Programs are funded and managed out of LANL’s 15 directorates, such as  Weapons Physics or Chemistry, Life and Earth Sciences, but LANL’s  scientists and engineers work in 64 technical divisions that are discipline  specific. These technical divisions, such as Applied Physics or Biology,  accomplish the work of the laboratory and support its operations.  Program managers in the directorates fund work in the technical divisions  in order to meet milestones determined with NNSA or other work  sponsors. To this end, employees in the technical divisions may support  multiple programs with their work and may be called on to provide  specific expertise to different programs. LANL’s facilities are managed by  its directorates and provide specific capabilities, such as high-performance  computers, LANL employees use for their work, as well as general office  and meeting space.
When LANL was originally sited and constructed during the Manhattan  Project, according to laboratory officials, its infrastructure was  intentionally spread out as a safety and security precaution. What was  once a benefit now makes LANL’s management and operation complex.  Spread across 40 square miles and including 155 miles of roads, 130 miles  of electrical transmission lines, 90 miles of gas transmission lines, and 9.4  million square feet of facility space, LANL employs 12,000 to 14,000 people  every day.
LANL’s approximately 2,700 structures are grouped together across the  laboratory into 49 major technical areas that include major scientific and  experimental facilities, environmental cleanup areas, and waste  management locations (see fig. 1). However spread out the technical  areas, LANL only considers less than 400 acres of its site to be highly  suited for development because of the difficulty of developing the site’s  steep slopes and because of the need to maintain safety and security  buffers around specific work activities. The most heavily developed area  of the laboratory is Technical Area-3, LANL’s core scientific and  administrative area, which accounts for half of the laboratory’s employees  and total floor space.
While individual scientific and engineering directorates within LANL are  responsible for managing and securing its facilities, multiple programs  across these organizations share facilities to accomplish their objectives.  For example, LANL’s Chemistry and Metallurgy Research facility is  managed by LANL’s Chemistry, Life and Earth Sciences directorate. The  facility, however, is occupied by over 500 employees to support a number  of programs across LANL that require its analytical chemistry and  materials property testing capabilities (see fig. 2). These programs include  manufacturing nuclear weapon pits, experimenting with nuclear fuels for  civilian energy production, and producing nuclear heat sources for  National Aeronautics and Space Administration missions.
LANL’s shared facilities are protected at different levels depending on the  type and amount of classified resources they house or store. DOE Manual  470.4-2, Physical Protection, defines these different levels and the types of  safeguards that must be in place to ensure that classified resources are  adequately protected. Table 1 summarizes these security levels and  appropriate safeguards from lowest to highest level of security.
To determine the overall effectiveness of LANL’s implementation of DOE  security requirements and the laboratory’s security performance, two DOE  organizations periodically conduct independent reviews. DOE’s Office of  Independent Oversight conducts assessments, typically every 18 months.  These assessments identify the weaknesses of LANL’s security program  and produce findings that laboratory officials must take action to correct.  NNSA’s Los Alamos Site Office is also required to conduct surveys  annually. These surveys are based on observations of performance,  including compliance with DOE and NNSA security directives. While the  two types of reviews differently categorize the topics and subtopics they  cover, the reviews overlap substantially. They both address security  program management, protective forces, physical security, classified  information protection, control and accountability of nuclear materials,  personnel security, and cyber security. Furthermore, they both use a color- coding system to rate each area of review as either Green (satisfactory or  effective), Yellow (marginal or needs improvement), or Red  (unsatisfactory or significant weakness). The results of these reviews  affect LANS’s ability to earn its performance-based award fee for  successful management and operation of LANL.
Under the contract between LANS and NNSA for the management and  operation of LANL, NNSA is to establish the work to be accomplished by  LANL, set requirements to be met, and provide performance direction for  what NNSA wants in each of its programs. NNSA does this by annually  issuing a performance evaluation plan that documents the process and  associated performance objectives, performance incentives, award term  incentives, and associated measures and targets for evaluating LANS’s  performance. In the performance evaluation plans for fiscal years 2007 and  2008, performance objectives and award fee incentives were specifically  provided for security performance. LANL’s contract requires the  development of a Contractor Assurance System to increase accountability  and improve management and performance. The Contractor Assurance  System, according to the LANL official responsible for its implementation,  is an integrated performance-based management system that is designed  to include independent assessment and that is available as a tool for  federal oversight. Notwithstanding the development of the Contractor  Assurance System, under the contract with LANS, NNSA preserves its  right to conduct direct oversight, particularly in the area of security.
The Secretary of Energy has authority under 10 C.F.R. § 824.4(b) of DOE’s  Procedural Rules for the Assessment of Civil Penalties for Classified  Information Security Violations to issue compliance orders that direct  management and operating contractors to take specific corrective actions  to remediate deficiencies that contributed to security violations regarding  classified information. On July 12, 2007, the Secretary of Energy issued a  compliance order to LANS as a result of the security incident uncovered in  October 2006 when a subcontractor employee removed classified  information from LANL without authorization. Analysis of the incident  identified numerous breakdowns in LANL’s classified information  protection program and concluded that these breakdowns were caused, in  part, by poor security practices. The Compliance Order directs LANS to  take comprehensive steps to ensure that it identifies and addresses critical  classified information and cyber security deficiencies at LANL. These  steps must be completed by December 2008. Violation of the Compliance  Order would subject LANS to civil penalties of up to $100,000 per violation  per day until compliance is reached.
section_title: LANL Conducts Over 175 Program Activities That Fall into Three Major and Two Support Program Categories
paragraphs: LANL has three major program categories—Nuclear Weapons Science,  Threat Reduction Science and Support, and Fundamental Science and  Energy. Nuclear Weapons Science programs ensure the safety,  performance, and reliability of the U.S. nuclear deterrent. Threat  Reduction Science and Support programs support nonproliferation and  counterproliferation efforts. Fundamental Science and Energy programs  address other national security concerns, particularly energy security, and  provide basic scientific capabilities that support laboratory missions.  LANL has two support program categories—Environmental Programs and  Safeguards and Security. Environmental Programs address the  remediation and disposition of waste at LANL. Safeguards and Security  programs provide LANL with physical and cyber security protection. In  addition to activities across these program categories that are supported  by DOE and NNSA, LANL conducts millions of dollars in work for other  federal agencies on specific research projects.
subsections: section_title: Nuclear Weapons Science Programs Ensure the Safety, Performance, and Reliability of the U.S. Nuclear Deterrent
paragraphs: LANL’s primary mission is to ensure the safety, performance, and  reliability of nuclear weapons in the nation’s stockpile without performing  underground nuclear weapon tests. It is responsible for the design,  evaluation, annual assessment, and certification of the United States’ W76  and W88 submarine launched ballistic missile warheads, the W78  intercontinental ballistic missile warhead, and the B61 nuclear bomb and  works in cooperation with NNSA’s other nuclear weapons design  laboratories and production plants. Because the United States stopped  conducting underground nuclear weapon tests in 1992, LANL weapons  scientists and engineers are involved in hundreds of research projects in  programs aimed at developing strong physics modeling and predictive  capabilities that provide information about nuclear weapons’  performance. Of particular focus since 2001 has been the development of a  common methodology, known as “Quantification of Margins and  Uncertainties,” for quantifying critical design and engineering factors  during the operation of a nuclear weapon and the margin for these factors  above which the weapons could fail to perform as designed.  Furthermore, LANL is involved in two ongoing life extension programs, for  the W76 and B61, which are efforts to refurbish aging weapons and extend  their lifetimes for 20 to 30 years. In addition, LANL builds, operates, and  maintains the infrastructure necessary to carry out its nuclear weapons  mission and to support other laboratory missions.
In fiscal year 2007, LANL conducted work on 41 Nuclear Weapons Science  programs supported by about 3,400 FTEs and with a budget from NNSA of  about $1.5 billion, which represented over half of LANL’s total budget and  approximately 87 percent of the funds received from NNSA for all of  LANL’s major program categories. Appendix II provides additional detail  on LANL’s Nuclear Weapons Science programs. Out of the $1.5 billion total  budget for LANL’s Nuclear Weapons Science programs, nearly $560  million—or 37 percent—was budgeted for the operation of the facilities  that support these programs, as well as new line item construction  projects. In addition, the following five other programs together represent  another 45 percent of LANL’s Nuclear Weapons Science budget:    Pit Manufacturing and Certification. Since 2001 LANL has been working  to reconstitute the nation’s capability to manufacture and certify pits,  which was lost when DOE’s Rocky Flats Plant near Denver, Colorado,  closed in 1989. This program re-establishes an immediate capability to  manufacture pits in support of the nuclear weapons stockpile, plans for  long-term pit manufacturing capability, and manufactures specific  quantities of W88 pits. In fiscal year 2007—the year LANL delivered the  first war reserve W88 pits for the nation’s stockpile—the budget for Pit  Manufacturing and Certification was $226.9 million, and the program was  supported by 599 FTEs.
Advanced Simulation and Computing. To compensate in part for the loss  of underground nuclear testing as a means for gathering data on nuclear  weapon performance, a program of advanced simulation and computing— hardware, software, and code—was implemented to provide predictive  computer models, supported by above ground experimental data and  archived data from past underground nuclear tests, that simulate nuclear  weapon performance. In fiscal year 2007, the budget for Advanced  Simulation and Computing was $202.5 million, and the program was  supported by 446 FTEs.
Stockpile Services. This program supports research, development, and  production work that is applicable to multiple nuclear weapon systems  rather than a specific weapon system. For example, scientists may  conduct basic research on critical factors of nuclear weapon operations in  this program or run tests on components shared by nuclear weapon  systems. In fiscal year 2007, the budget for Stockpile Services was $140.7  million, and the program was supported by 361 FTEs.
Stockpile Systems. For each weapon type for which LANL is responsible,  this program supports routine maintenance; periodic repair; replacement  of components; and surveillance testing to assure the weapon type’s  continued safety, security, and reliability. In fiscal year 2007, the budget  for Stockpile Systems was $67.4 million, and the program was supported  by 162 FTEs.
Life Extension Program. This program extends the lifetimes of warheads  or the components of these warheads to ensure that they continue to  perform as designed. LANL is currently focused on programs to extend the  lifetimes of the B61 and W76 weapon types by 20 and 30 years,  respectively. In fiscal year 2007, the budget for LANL’s life extension  programs was $44.1 million, and the programs were supported by 120  FTEs.
LANL’s directorate for Weapons Programs is responsible for the conduct  of these programs and carries them out primarily through three associate  directorates—Weapons Physics, Weapons Engineering, and Stockpile  Manufacturing and Support—as well as an office of Weapons  Infrastructure. These organizations draw upon scientific, engineering, and  experimental capabilities from throughout the laboratory to answer  specific points of inquiry and to solve problems related to the nuclear  weapons stockpile. For example, the Weapons Physics associate  directorate has identified 10 key capabilities that it believes are necessary  to ensure that it can execute its weapons program work, many of which  also aid scientific work outside of Nuclear Weapons Science programs.  These capabilities, which reside in technical organizations outside of the  Weapons Program Directorate, include expertise in high-performance  computing, dynamic model validation, and radiochemistry. This matrixed  approach, according to LANL officials, allows LANL’s technical staff to  work among peers in their respective fields and to apply their expertise to  Nuclear Weapons Science programs as the need arises.
section_title: Threat Reduction Science and Support Programs Support Nonproliferation and Counterproliferation Efforts
paragraphs: In addition to helping ensure the safety and reliability of the U.S. nuclear  deterrent, LANL applies science and technology to reduce the global threat  of weapons of mass destruction (WMD), the proliferation of WMD, and  terrorism. LANL pursues this mission through programs in three areas.  First, the laboratory’s nuclear nonproliferation programs, primarily funded  by NNSA, focus on ways to address nuclear and radiological threats  domestically and internationally. Second, LANL scientists familiar with  WMD support the work of the Intelligence Community. Third, LANL  conducts research programs supported by federal agencies, such as the  Departments of Defense and Homeland Security, that provide foundational  science and technology solutions to defeat chemical, radiological,  biological, and nuclear WMD. Programs in these latter two areas are  conducted as work for other federal agencies and are discussed in more  detail in a subsequent section of this report.
In fiscal year 2007, NNSA supported 12 Threat Reduction Science and  Support nuclear nonproliferation programs at LANL that relied on over  480 FTEs and had a budget of about $225 million. Of these 12 programs, 9  were budgeted at over $1 million each in fiscal year 2007. Appendix III  provides additional detail on these Threat Reduction Science and Support  programs. Over 60 percent of the budget NNSA provided to support Threat  Reduction Science and Support programs was for two programs:    Nonproliferation and Verification Research and Development. This  program conducts scientific research and development and provides  monitoring, sensing, and measurement technologies to observe the earth  from space-based satellites and produces and updates data for ground- based systems in order to detect banned nuclear explosions. In particular,  LANL produces electromagnetic pulse and radiation sensors that are  integrated into U.S. Air Force satellites and develops algorithms used to  process remote sensing data. In fiscal year 2007, the budget for  Nonproliferation and Verification Research and Development was $95.5  million, and the program was supported by 254 FTEs.
U.S. Surplus Fissile Materials Disposition. NNSA funds efforts to  dispose of the country’s surplus plutonium and highly enriched uranium.  LANL supports plutonium disposition efforts by developing the processing  technologies that will be used in a facility currently planned for  construction at the Savannah River Site in South Carolina. This facility will  disassemble surplus nuclear weapon pits and convert the plutonium in  them into a powder form that can later be fabricated into a fuel useable in  commercial nuclear reactors. In fiscal year 2007, LANL’s budget for this  plutonium disposition work was $43 million, and the work was supported  by 117 FTEs.
LANL’s Directorate for Threat Reduction is responsible for conducting the  laboratory’s Threat Reduction Science and Support programs. Those  programs primarily supported by NNSA are carried out through the  directorate’s Nuclear Nonproliferation program office. This office employs  scientific, engineering, and experimental capabilities from throughout the  laboratory to accomplish program missions. According to LANL officials,  these capabilities, such as nuclear device design and radiochemistry, were  initially developed to support Nuclear Weapons Science missions but are  now being leveraged to support Threat Reduction Science and Support  missions. In turn, these officials told us results from Threat Reduction  Science and Support programs provide feedback to Nuclear Weapons  Science programs. For example, information on techniques to disarm  nuclear weapons that are learned in threat reduction work can be used to  improve the safety and security of the U.S. nuclear weapons stockpile.
section_title: Fundamental Science and Energy Programs Address Energy Security and Other Emerging National Security Challenges and Support Basic Scientific Research
paragraphs: As a national security science laboratory, LANL’s mission also includes the  development and application of science and technology to solve emerging  national security challenges beyond those presented by WMD. LANL’s  Fundamental Science and Energy programs are managed by the  laboratory’s Science, Technology and Engineering Directorate, and funds  to support these programs come from multiple offices within DOE, as well  as other federal agencies. In fiscal year 2007, DOE supported 40 programs  focusing on energy security—specifically, fossil energy, civilian nuclear  energy, alternative energy, and fusion. In addition, DOE supported basic  scientific work in such areas as advanced computing, biology,  environmental science, nuclear physics, and materials science, as well as  Laboratory-Directed Research and Development projects. In total, DOE  provided $151 million for Fundamental Science and Energy programs that  supported over 380 FTEs. Appendix IV describes, in detail, LANL’s DOE  supported Fundamental Science and Energy programs. Work for other  federal agencies and Laboratory-Directed Research and Development  projects in Fundamental Science and Energy are discussed in a  subsequent section of this report.
LANL officials told us the laboratory’s Fundamental Science and Energy  programs, in conjunction with its Nuclear Weapons Science and Threat  Reduction Science and Support programs, provide an integrated approach  to national security science because these programs leverage one  another’s scientific, engineering, and experimental capabilities. For  example, according to a senior LANL Science, Technology and  Engineering official, LANL’s Nuclear Weapons Science researchers  developed expertise in underground work, such as tunnel boring, to  facilitate underground nuclear testing, and this expertise has been  translated for use in fossil energy activities. Specifically, the scientists and  engineers responsible for the nuclear weapon test readiness program work  out of the Fundamental Science and Energy organization. Similarly,  capabilities in high-performance computing and simulation utilized by  Nuclear Weapons Science programs have been applied to many other  national security and Fundamental Science and Energy applications.  Furthermore, a senior LANL Nuclear Weapons Science official told us that  7 of the 10 key capabilities identified for Weapons Physics work, such as  high-performance computing, computational math and physics, and  weapons material properties and characterization, are managed out of the  same directorate responsible for LANL’s Fundamental Science and Energy  programs. More than one-quarter of LANL’s career employees work in  more than one of LANL’s major program areas, and laboratory officials  told us a substantial number of employees develop the critical skills  needed for the Nuclear Weapons Science and Threat Reduction Science  and Support programs by first working in Fundamental Science and  Energy programs.
section_title: Environmental Programs Address Remediation of Waste at LANL
paragraphs: LANL’s Environmental Programs support the laboratory’s scientific work  by addressing legacy contamination, legacy waste disposition, and new  waste at the site produced as a function of programmatic work. This waste  is categorized as either legacy—generated before 1998—or newly  generated. DOE’s Office of Environmental Management provides funding  for activities to remediate legacy contaminated sites and to dispose of  legacy waste, and NNSA provides funding for activities to dispose of newly  generated waste. LANL charges program organizations for disposition of  newly generated waste, providing an additional stream of funds to support  Environmental Programs. In fiscal year 2007, DOE’s Office of  Environmental Management supported LANL’s legacy remediation and  waste activities with a budget of over $146 million that supported about  325 FTEs. Costs and FTEs associated with processing newly generated  waste and managing and operating the facilities that process them are paid  for by the Nuclear Weapons Science facilities and operations programs  discussed above. This work generally amounts to $40 million per year, and  87 FTEs support newly generated waste-processing activities.
LANL’s legacy contamination remediation activities focus on remediation  of contaminated sites and decontamination and decommissioning of  contaminated structures. LANL must complete its work on contaminated  sites by 2015 to comply with a Consent Order from the state of New  Mexico’s Environment Department to remediate soil and groundwater  contamination. According to the LANL official responsible for this work,  as of May 2007, LANL had cleaned up 1,434 of the 2,194 contaminated  sites; however, the remaining sites are more difficult to address. This  LANL official estimated that between 2007 and 2015, remediation of all of  the sites will cost approximately $900 million.
LANL’s newly generated waste activities focus on liquid and solid waste  processing and disposal. Radioactive liquid waste at LANL is processed at  the laboratory’s Radioactive Liquid Waste Treatment facility, a building  that is 45 years old. Upgrades to the treatment facility are currently under  way, and the upgraded facility is expected to be operational by 2010. Solid  waste—typically comprising discarded rags, tools, equipment, soils, and  other solid materials contaminated by man-made radioactive materials— are processed at LANL’s Technical Area-54 Area G Disposal Site.  Engineering and design work has begun on a replacement facility for  processing solid waste, and the facility is expected to be operational in  2014.
section_title: LANL’s Safeguards and Security Program Provides Physical and Cyber Security Protection
paragraphs: LANL’s Safeguards and Security program aims to provide the laboratory  with protection measures that are consistent with the threats and risks  detailed in the laboratory’s Site Safeguards and Security Plan. This plan,  which NNSA reviews annually, details levels of protection that must be  provided in different areas of the laboratory to ensure secure  programmatic operations and covers such topics as protective forces, site  perimeter security, accountability and control over special nuclear  material, protection of hard copy and electronic classified information,  alarms, intrusion detection systems, identification badges, and security  clearances. In fiscal year 2007, $140 million and over 900 FTEs supported  Safeguards and Security operations.
In addition, construction projects provide new and upgraded security  protection at key areas. Specifically, an additional $48 million was  budgeted to support two construction projects in fiscal year 2007. The first  is the second phase of the Nuclear Materials Safeguards and Security  Upgrade project, which focuses on providing upgraded perimeter  protection for the facility at LANL where pits are manufactured. The  second project focuses on creating a more secure entry point for vehicle  traffic at LANL by establishing access control stations and altering traffic  patterns on public roads (see fig. 3).
While LANL employs security professionals, the technical divisions, in  practice, have been responsible for securing their own classified resources  by operating their own vault-type rooms, classified computer networks,  and classified work areas. These divisions also operated accountability  systems for maintaining control over classified resources. Professional  security staff advise technical divisions on security requirements and  check on whether established practices are appropriately implemented  and managed. More recently, security professionals have been deployed to  technical divisions to assist directly with security operations, and  according to LANL officials, classified resource protection has been  centralized to a greater extent through such actions as consolidating  storage of all accountable classified documents into one location.
section_title: LANL’s Programs Include Millions of Dollars in Work for Other Federal Agencies and Laboratory-Directed Research and Development Projects
subsections: section_title: Work for Others
paragraphs: According to LANL, the laboratory’s budget for work for others projects in  fiscal year 2007 was $462.4 million—or about 17 percent of the  laboratory’s total budgetary resources—and these projects relied on  nearly 800 FTEs. NNSA’s Site Office reported that LANL scientists and  engineers conducted work on over 1,200 individual projects for other  federal agencies and outside entities in fiscal year 2007. Of these 1,200  projects, only 93 had fiscal year 2007 budgets of $1 million or more, and  the budgets for these 93 projects totaled about $270 million, or 58 percent  of all projects’ budgets in fiscal year 2007. Nearly 60 percent of the $270  million available for these 93 projects came from the following two  sources:    Defense related intelligence agencies sponsored 26 of the 93 projects.
These projects are described by LANL as “International Technology”  projects.
The Department of Homeland Security sponsored an additional 24 of the  93 projects. The largest of these projects supports the National  Infrastructure Simulation and Analysis Center. The National Infrastructure  Simulation and Analysis Center applies LANL’s expertise in computer- based modeling and simulation for national response to national security  events, such as a nuclear or radiological device explosion or an outbreak  of infectious disease. Other projects focus on research and development  related to defeating chemical and biological weapons, detecting the  movement of radioactive materials, and providing threat assessment  capabilities.
Work for others activities are concentrated in LANL’s Threat Reduction  Science and Support and Fundamental Science and Energy programs. In  particular, 27 Threat Reduction Science and Support programs received  several hundred million dollars in fiscal year 2007. Twenty Fundamental  Science and Energy programs received about $162 million to conduct  work for others activities in fiscal year 2007. Of this total, 41 percent came  from other DOE entities, such as other national laboratories; 19 percent  from the Department of Health and Human Services; 13 percent from the  National Aeronautics and Space Administration; and 10 percent from  universities and institutions.
section_title: Laboratory-Directed Research and Development
paragraphs: In addition to programs supported by NNSA, DOE, and other federal and  nonfederal work sponsors, LANL supports a program of Laboratory- Directed Research and Development (LDRD) that focuses on forefront  areas of science and technology that are relevant to NNSA and DOE  missions but are not directly funded by specific NNSA or DOE programs.  LDRD projects are largely self-initiated and are funded indirectly by LANL  through contributions made by directly funded programs. To this end,  funds allocated for use on LDRD projects are not a budgeted expense, but  do contribute to the cost of LANL’s work. DOE guidance requires that the  maximum funding level for LDRD projects not exceed 8 percent of a  laboratory’s total operating and capital equipment budget. In fiscal year  2007, LANL provided just under $130 million to conduct work on 199  LDRD projects involving approximately 470 FTEs. These projects ranged  in scope from research on predictive climate modeling, to nanotechnology  in semiconductors, to medical technologies, to plutonium sciences. DOE  guidance requires that LDRD projects normally conclude within 36 months  of inception.
section_title: LANL’s Nuclear Weapons Science Programs Rely on Classified Resources to Accomplish Their Missions to a Greater Extent Than Do Other LANL Programs
paragraphs: To carry out its programs, LANL’s major and support programs operate in  a wide variety of shared facilities, ranging from office buildings, to  laboratories, to manufacturing facilities for nuclear weapon pits and high  explosives. In this regard, LANL officials identified 633 such facilities,  which are protected at different security levels. Of these 633 facilities, 607  are used by LANL’s major programs. Table 2 provides information on the  different levels of security at which LANL’s major and support program  facilities are protected.
Facilities with appropriate levels of security house or store a variety of  classified resources, ranging from special nuclear material to classified  documents. At least 365 facilities are protected in their entirety at the  Limited Area level or above, which is sufficient to allow them to store  classified documents or perform classified activities. In contrast, Category  I special nuclear material will be found in a facility that has all of the  protections provided by Limited, Exclusion, Protected, and Material  Access Areas. Table 3 provides information on the different types of  classified resources housed or stored in these facilities.
LANL’s Nuclear Weapons Science programs rely on facilities that house  classified resources to a much greater extent than do the laboratory’s  Threat Reduction Science and Support or Fundamental Science and  Energy programs. In contrast, LANL’s Environmental and Safeguards and  Security support programs rely on facilities that house classified resources  to a minor extent. Specifically, Nuclear Weapons Science programs use  322 facilities that require security protections for classified resources.  Thirty-two of these 322 facilities are protected at the highest levels as  Exclusion, Protected, and Material Access Areas. Nuclear Weapons  Science programs are the primary users—meaning they use more space in  a facility than any of the other major or support programs at LANL—of 28  of these 32 facilities, including LANL’s single Category I special nuclear  material facility, known as Plutonium Facility 4 at Technical Area-55.  Threat Reduction Science and Support programs use 105 facilities that  require security protections for classified resources, 31 of which are  protected as Exclusion, Protected, and Material Access Areas. Of these 31,  Threat Reduction Science and Support is the primary user of 14, including  all of LANL’s facilities for Sensitive Compartmented Information. Finally,  Fundamental Science and Energy uses 103 facilities that require security  protections for classified resources. While 15 of these are protected as  Exclusion, Protected, and Material Access Areas, Fundamental Science  and Energy is not the primary user of any of these 15 facilities.
Finally, LANL’s Nuclear Weapons Science programs are the primary users  of facilities storing or housing different types of classified resources to a  greater extent than are LANL’s Threat Reduction Science and Support or  Fundamental Science and Energy programs. Table 4 provides information  on the primary-user facilities that house or store classified resources, as  well as vault-type rooms.
section_title: LANL Is Implementing Over Two Dozen Initiatives Officials Believe Will Reduce Security Risk and Improve Protection of Classified Resources
paragraphs: LANL has initiatives under way that are principally aimed at reducing,  consolidating, and better protecting classified resources, as well as  reducing the physical footprint of the laboratory by closing unneeded  facilities. LANL officials believe that these initiatives will reduce the risk of  incidents that can result in the loss of control over classified resources. In  concert with these actions, LANL is implementing a series of engineered  and administrative controls to better protect and control classified  resources.
subsections: section_title: LANL Is Reducing and Consolidating Classified Resources and Its Physical Footprint
paragraphs: According to NNSA security officials, the size and geographic dispersal of  LANL’s facilities creates challenges for classified operations at the  laboratory because classified resources must be shared among programs  that use remote facilities. This condition increases the number of  instances in which laboratory employees move and hand off classified  resources—a situation that has created accountability problems. To  address this problem, LANL is reducing classified holdings at the  laboratory; consolidating storage of and access to these resources in fewer  facilities that are more centrally located and controlled; and where  possible, eliminating hard copies and classified removable electronic  media by transferring the information to LANL’s classified “red” computer  network. Simultaneously, LANL is reducing the overall size of its physical  footprint by eliminating facilities that are in poor or failing condition or  are excess to mission needs.
subsections: section_title: Classified Resources Reduction and Consolidation
paragraphs: LANL is undertaking a number of initiatives that security officials believe  will improve LANL’s security posture and, thereby, risk to the laboratory’s  operations. These initiatives are being managed in the short-term by a  Security Improvements Task Force, a multidisciplinary team chartered in  January 2007 to improve physical security operations. The Task Force  targeted six types of classified resources for immediate consolidation and  reduction: (1) accountable classified removable electronic media; (2)  classified removable electronic media that do not need to be tracked with  an accountability system; (3) classified parts; (4) accountable classified  documents; (5) classified documents that do not need to be tracked with  an accountability system; and (6) vaults and vault-type rooms. With  respect to each type of resource, LANL developed a baseline inventory of  resources, identified resources that could be destroyed, or, in the case of  vaults and vault-type rooms, emptied and consolidated remaining  resources into fewer facilities. As of March 2008, the latest date for which  data is available, LANL had significantly reduced and consolidated each of  these resources, as described:    Accountable classified removable electronic media. LANL reduced the  number of pieces of accountable classified removable electronic media  actively in use from a high of 87,000 pieces in 2003 to about 4,300 pieces.
Classified removable electronic media. LANL instituted a “spring  cleaning” project in May 2007 that contributed to the destruction of 610  pieces of classified removable electronic media. According to a senior  LANL security official, LANL completed an assessment of its classified  removable electronic media holdings in February 2008 and estimates there  are approximately 6,500 pieces of nonaccountable classified removable  electronic media at the laboratory. Security officials said unneeded media  will be destroyed during a second spring cleaning effort in May 2008.
Classified parts. LANL has allocated nearly $1.7 million for a project to  inventory tens of thousands of classified nuclear weapon parts, destroy  those that are no longer useful, and centrally manage those that remain.  Through a laboratorywide effort, nearly 30,000 classified parts were  identified and destroyed between February 2007 and March 2008 by either  melting the parts, grinding them into shapes that are no longer classified,  or by blowing them up. According to LANL officials, additional destruction  of classified parts is under way.
Accountable classified documents. LANL completed consolidation of all  accountable documents into a single storage library in November 2007.  While accountable classified documents are created and destroyed on an  ongoing basis, as of March 2008, LANL was managing just over 6,000  accountable classified documents.
Classified documents. According to a senior LANL security official, the  laboratory completed an assessment of nonaccountable classified  documents in February 2008 and estimates there are approximately 9  million classified documents at the laboratory. From April 2007 through  February 2008, LANL destroyed over 1.6 million pages of classified  documents, and another destruction effort is planned for May 2008.
Vaults and vault-type rooms. LANL has reduced the number of vault-type  rooms at the laboratory from 142 to 111 and plans to further reduce the  number to 106. One LANL security official said he thought the laboratory  could ultimately reduce the number of vault-type rooms to 100. Of the  remaining vaults and vault-type rooms, LANL officials told us all have been  comprehensively inspected and any security deficiencies remedied. During  fiscal year 2007, LANL built a prototype “super vault-type room,” a model  for future vault-type room operations, that consolidates classified  resources in a highly secure, access-controlled environment staffed by  security professionals. According to LANL officials, the super vault-type  room has allowed LANL to consolidate 65 percent of its accountable  classified removable electronic media holdings in one location. In addition  to classified resource storage, the super vault-type room offers classified  mailing, scanning, faxing, and printing services, thereby reducing the  number of locations, equipment, and people handling classified resources  in other parts of the laboratory.
In addition, LANL is taking steps to reduce the number of special nuclear  material storage facilities that must be protected at the site. In 2000, there  were 19 such nuclear facilities at LANL, and by 2006, this number had  decreased to 11. LANL plans to further reduce the number of nuclear  facilities at the site to five by 2016. The number of facilities that store  Category I special nuclear material has already been reduced from nine to  one. This remaining Category I facility—LANL’s Plutonium Facility 4 at  Technical Area-55 (see fig. 4)—contains the nation’s only plutonium  research, development, and manufacturing facility and the laboratory’s  only Material Access Area. It is protected with a combination of  safeguards that include fences, controlled access points, electronic  sensors and surveillance, and armed guards.
According to the LANL Director, the laboratory has embarked on a  multiyear transformation effort to reduce its facility footprint and better  manage its infrastructure investments. Many facilities at LANL were built  in the early 1950s and are beginning to show signs of structural or systems  failure. Other structures at LANL, such as trailers, are temporary and do  not provide quality office or laboratory space. Furthermore, the  geographic separation of LANL’s facilities makes effective collaboration  difficult, according to LANL program managers. LANL officials told us that  reducing the laboratory’s physical footprint will save facility operation  costs and reduce deferred maintenance costs, which LANL estimated at  $321.5 million in fiscal year 2007. Officials said it will also enhance  scientific collaboration and improve safety and security.
LANL’s goal in fiscal year 2007 was to reduce its existing facility footprint  by 400,000 square feet and to reduce it by a further 1.6 million square feet  in fiscal year 2008. To determine which facilities would be reduced,  several of LANL’s directorates prepared footprint reduction plans  targeting facilities that (1) have significant deferred maintenance costs, (2)  are in poor or failing condition, (3) are expensive to maintain because they  were not designed or built for energy efficiency, and (4) are considered  excess to current and anticipated mission needs. In fiscal year 2007, LANL  exceeded its footprint reduction goal by reducing existing facility square  footage by just over 500,000 square feet. Seventy-seven facilities were  reduced to contribute to this total.
According to LANL and NNSA officials, the criteria used to determine  whether a facility is considered to be reduced vary. Generally, a facility is  considered reduced when it is closed, the utilities have been disconnected,  and it is no longer occupied by laboratory employees. However, in at least  one instance, LANL considered a portion of a facility to be reduced, while  another portion remained occupied and building utilities were still  connected. A reduced facility may still require environmental remediation  and will eventually require disposition, either through demolition, transfer,  or sale.
section_title: LANL Is Introducing Engineered and Administrative Controls to Protect Classified Resources
paragraphs: LANL is also introducing engineered and administrative controls to  improve the physical security of its remaining classified resources and to  reduce the security risks associated with their use. According to LANL,  implementing these controls can help reduce errors in handling classified  resources and, therefore, reduce risk. The super vault-type room is a  solution engineered to address the risk of mishandling accountable  classified resources by putting responsibility for these classified resources  in the hands of security professionals. A senior LANL security official told  us that the laboratory relies on these controls to influence and change  laboratory employees’ behavior. For example, a LANL official said  increased mandatory and additional random searches of employees  leaving vault-type rooms—an engineered control—should help raise  employees’ awareness of unauthorized removal of classified documents or  media from vault-type rooms. Furthermore, simplifying security orders— an administrative control—should help LANL employees understand and  implement their security obligations.
Examples of engineered controls, beyond the initiatives to reduce and  consolidate the seven types of classified resources discussed above,  include  improving security perimeters around the laboratory and around specific  facilities;   adding to and reinforcing existing vehicle access control points;    expanding a random drug testing program to include all new and existing  LANL employees and subcontractors; increasing random searches performed by protective forces on individuals  in secure areas to ensure they are not leaving with classified resources;   expanding the classified “red” computer network to a greater number of  facilities, further enabling the reduction of accountable and  nonaccountable classified electronic media;   significantly reducing laboratory computers’ ability to create new  accountable and nonaccountable classified removable electronic media;  initiating a pilot program to attach radio frequency identification tags to  cellular phones and two-way paging devices that set off an alarm when  these devices are brought into restricted areas; and   upgrading security alarm systems.
Examples of administrative controls include  issuing manuals to formalize facility operations, maintenance, engineering,  training, and safety requirements across LANL;   updating and simplifying physical security orders to ensure requirements  are easily understood and can be implemented;  reinforcing the applicability of security requirements to subcontractors  through a meeting and a new appendix to subcontractors’ contracts;   enhancing procedures for escorting individuals into vault-type rooms;    eliminating the practice of allowing cleared individuals to hold the door  for other cleared individuals entering restricted facilities, known as  “piggybacking,” by requiring that all individuals entering restricted  facilities swipe their badges; implementing Human Performance Assessments of security incidents that  identify how a lack of engineered or administrative controls, which can be  corrected, contribute to human errors; and reissuing work control policies emphasizing Integrated Safeguards and  Security Management, a system intended to provide each LANL employee  with a framework for performing work securely and fulfilling individual  security responsibilities.
section_title: While LANL’s Initiatives Address Many Security Problems Identified in Prior External Evaluations, Other Significant Security Problems Have Received Insufficient Attention
paragraphs: Many of the initiatives LANL is undertaking address security findings  identified in external evaluations, particularly those conducted by DOE’s  Office of Independent Oversight and NNSA’s Site Office. Some of these  initiatives are being implemented in response to DOE’s 2007 Compliance  Order, which resulted from the October 2006 security incident. Despite  these efforts, however, significant security problems have not been fully  addressed. Furthermore, in fiscal year 2007 LANL’s initiative to reduce the  physical footprint of its site reduced maintenance costs more than it  addressed facility security.
subsections: section_title: Many of LANL’s Initiatives Address Security Problems Identified by DOE’s Office of Independent Oversight and NNSA’s Site Office between Fiscal Years 2000 and 2008
paragraphs: Between fiscal years 2000 and 2008, DOE’s Office of Independent  Oversight issued four complete assessments of security at LANL. Over  the same period, NNSA’s Los Alamos Site Office conducted seven surveys  of laboratory security. These assessments and surveys identified a variety  of security problems at LANL, many of which are being addressed through  initiatives LANL is currently implementing. Some examples follow:  Inadequate accounting for classified documents. Issues with the  adequacy of LANL’s accounting for classified documents were raised by  the Site Office in fiscal years 2005 and 2006 and by DOE’s Office of  Independent Oversight in fiscal year 2007. These issues related to the  inconsistent handling of classified documents by document custodians in  LANL’s divisions and to the timeliness of updates to LANL’s classified  document and media accountability policies to ensure that they reflected  DOE’s policies. Several of LANL’s ongoing security initiatives and  engineered and administrative controls are intended to address these  concerns by centrally storing and handling accountable classified  documents in vaults, vault-type rooms, and the super vault-type room  staffed by security professionals and by implementing an automated  system to update classification guidance.
Inadequate accounting for classified nuclear weapon parts. Findings  about the adequacy of LANL’s accounting for classified parts were raised  by the Site Office in fiscal year 2001 and by DOE’s Office of Independent  Oversight in fiscal years 2003, 2007, and 2008. These findings related to  improper marking of classified parts with their appropriate classification  level and storage of classified parts in containers and facilities that are  considered nonstandard, or out of compliance with DOE rules governing  classified resource storage. These rules include requirements for building  alarms, frequency of security guard patrols, and facility vulnerability  assessments. Furthermore, the DOE Inspector General reviewed LANL’s  management of classified parts in 2007 and had additional findings about  the inventory systems used to maintain accountability over classified  parts. While LANL has not resolved issues related to nonstandard storage  (see discussion in a subsequent section of this report), LANL officials told  us that by destroying nearly 30,000 classified parts at the laboratory, they  have established a goal to reduce the number of nonstandard storage  facilities from 24 to 0 by the end of August 2008. LANL is also developing a  new, centrally controlled inventory system for tracking classified parts and  has created administrative procedures and guidance for the system’s use.
Inconsistent efforts to reduce classified holdings. A finding about the  consistency of LANL’s efforts to reduce classified holdings was raised by  the Site Office in fiscal year 2001. The Site Office noted that despite the  existence of LANL procedures for regularly reviewing classified  inventories to reduce them to the minimum necessary, routine review and  reduction of classified inventories was not occurring. While other surveys  and assessments did not discuss this finding, LANL’s current initiatives to  reduce accountable and nonaccountable documents and classified  removable electronic media, which began in 2003, have significantly  reduced holdings, and future classified holdings reduction targets are  being developed.
Through engineered controls, LANL is also attempting to limit the ability  and the need to create new classified removable electronic media and to  make the information previously stored on removable media available  through the laboratory’s classified computer network. Specifically, to  prevent the creation of new media, LANL is removing functions on  classified computers that would allow media to be created or copied and  is deploying new classified computing systems that do not contain the  capability to create removable electronic media. In addition, LANL has  undertaken an effort to upload the information stored on classified  removable electronic media to the laboratory’s classified computer  network before the media are either destroyed or permanently archived.  LANL officials said this will reduce the risk that media could be  mishandled, thus improving the laboratory’s physical security. However,  LANL officials also acknowledged that transferring information from  classified media to a classified network represents a shift from physical  security risk to cyber security risk. A senior LANL official told us this risk  is minimized by ensuring that LANL’s classified network is appropriately  protected and access to the network is properly controlled.
Insufficient security at vault-type rooms. Findings about the sufficiency  of security at LANL’s vault-type rooms were raised by the Site Office in  fiscal year 2005 and by DOE’s Office of Independent Oversight in fiscal  years 2007 and 2008. These findings concerned the adequacy of security  patrols, sensor detection, and unauthorized access. LANL has addressed  concerns about vault-type room security through comprehensive physical  assessments of all vault-type rooms, and a laboratory security official told  us that all identified deficiencies have been remedied. Furthermore, the  official told us that in the future LANL intends to recertify vault-type  rooms every 2 years, instead of every 3 years. Finally, LANL has reduced  the number of vault-type rooms in operation at the laboratory—facilitating  more frequent security patrols—and has increased mandatory and random  searches of individuals exiting vault-type rooms.
LANL is also implementing security initiatives in response to the October  2006 security incident. Specifically, DOE’s July 2007 Compliance Order,  which resulted from this incident, required LANL to submit an integrated  corrective action plan to address critical security issues at the laboratory,  including many of those identified by the Site Office and Office of  Independent Oversight since 1999. According to LANL’s analysis of past  information and cyber security findings, the root causes of 76 percent of  these findings were related to inadequate policies, procedures, or  management controls. Correspondingly, many of the administrative  controls LANL is now implementing and that it included in its integrated  corrective action plan address these policy, procedural, and management  problems, including  reissuing policies and guidance for improving implementation of  Integrated Safeguards and Security Management, which LANL officials  told us will help individual employees ensure they execute their security  responsibilities as part of their regular work;   providing Human Performance Assessments as a component of security  incident reports to help managers identify challenges in their work  environments that can be improved to reduce the likelihood and severity  of security errors made by employees; revising policies for escorting visitors into vault-type rooms to ensure  visitors’ access to classified resources is properly limited; and improving communication of security requirements to subcontractors by  adding an additional exhibit to their contracts.
section_title: Not All Security Problems Are Being Fully Addressed
paragraphs: While many of the initiatives and engineered and administrative controls  LANL is implementing address past security concerns, some significant  security problems identified by DOE’s Office of Independent Oversight  and NNSA’s Site Office have not been fully addressed. Specifically, LANL’s  storage of classified parts in unapproved storage containers and its  process for ensuring that actions taken to correct security deficiencies are  completed have been cited repeatedly in past external evaluations, but  LANL has not implemented complete security solutions in these areas. In  addition, LANL’s actions to address other long-standing security concerns,  such as the laboratory’s process for conducting self-assessments of its  security performance and its system for accounting for special nuclear  material, have been planned but have not, as yet, been fully implemented.  More specific examples include the following:    Classified nuclear weapon parts storage. LANL uses General Services  Administration-approved security containers for standard storage of  classified resources. Classified resources that cannot be readily stored in  approved containers—for example, because of their size—are stored in  vaults, vault-type rooms, or nonstandard storage facilities. According to  LANL officials, there are 24 nonstandard storage areas at the laboratory.  Requests for nonstandard storage are made through a process approved  by NNSA’s Site Office. LANL management reviews all nonstandard storage  requests, and requests are approved by LANL’s Physical Security group.
The approval process requires LANL to conduct risk assessments for these  nonstandard storage areas.
While the Site Office has never independently raised concerns about the  adequacy of nonstandard storage areas in its surveys, the Office of  Independent Oversight has consistently called attention to this issue.  Specifically, in fiscal years 2003, 2007, and 2008, the Office of Independent  Oversight noted problems with the safeguards LANL said were in place to  protect nonstandard storage areas and questioned the risk assessment  methodology LANL has used to determine appropriate protections. In  2007, the Chief of DOE’s Office of Health, Safety and Security, which  oversees independent assessments, testified that LANL is overly  dependent on nonstandard storage for the protection of many of its  classified nuclear weapon parts and that the overall impact of deficiencies  in nonstandard storage arrangements on the protection of these parts is  substantial. LANL officials told us their goal is to eliminate all 24  nonstandard storage areas at the laboratory by August 2008 and, in the  interim, continue to apply for waivers to rules governing standardized  storage through the Site Office’s approval process. However, LANL’s plans  for eliminating specific nonstandard storage areas show the elimination of  one area planned for the second quarter of fiscal year 2009—as much as  seven months later than LANL’s August 2008 goal—and four others that  will remain nonstandard storage areas. Furthermore, a recent status report  on nonstandard storage area elimination activities showed that nearly all  activities were at risk of schedule delay.
Process for ensuring that corrective actions are completed. When  evaluations result in findings of security deficiencies, LANL must prepare  a corrective action plan that charts a path forward for resolving the  finding. To resolve a deficiency and complete its corrective action plan,  DOE requires LANL to conduct a root-cause analysis, risk assessment, and  cost-benefit analysis to ensure that the corrective action implemented  truly resolves the deficiency identified. In fiscal year 2007, the Office of  Independent Oversight questioned the completeness of corrective action  plans—some of which did not include the required risk assessments— leading to concerns about whether actions taken to address security  deficiencies would in fact prevent recurrence. This concern is similar to  our 2003 finding that corrective action plans are often inconsistent with  DOE requirements. The fiscal year 2008 Office of Independent Oversight  assessment noted that weaknesses in corrective action plans’ causal  analyses remain. Specifically, the Office of Independent Oversight found  that some corrective action plans’ root-cause analyses were insufficient to  properly identify security deficiencies. According to LANL officials, in  fiscal year 2008, LANL revised its self-assessment program to ensure that  root-cause analyses are included in all corrective action plans and that  these plans are sufficient.
In fiscal year 2007 the Site Office and the Office of Independent Oversight  raised concerns about the timeliness of LANL’s submission of corrective  action plans and the length of time it takes to close corrective action plans  by resolving findings. The fiscal year 2007 Performance Evaluation Plan  that NNSA developed to establish priorities for the laboratory provided  LANS with financial incentives totaling over $1 million to complete LANL’s  corrective actions on schedule. While the Site Office noted significant  improvement in the timeliness and closure of corrective action plans in its  fiscal year 2007 survey, LANL did not meet the fiscal year 2007  performance milestone. NNSA’s fiscal year 2008 Performance Evaluation  Plan provides LANS with a $100,000 financial incentive to improve the  timeliness of corrective action plan development and up to an additional  $357,000 to close corrective action plans quickly and on time.
Inadequate self-assessment. Concerns about the adequacy of LANL’s  assessments of its own security performance were raised by the Site  Office in fiscal years 2003, 2005, 2006, and 2007 and by DOE’s Office of  Independent Oversight in fiscal year 2008. These concerns related to the  comprehensiveness of LANL’s self-assessments, the extent to which self- assessments included discussion of all internal findings, and the extent to  which these findings were analyzed and addressed through corrective  actions. NNSA provided LANS with a nearly $600,000 financial incentive  under the fiscal year 2007 Performance Evaluation Plan to improve LANL’s  self-assessment program. According to NNSA’s evaluation of LANL’s fiscal  year 2007 performance, LANL did not meet NNSA’s goal but did make  progress toward it by significantly improving self-assessment. The Office  of Independent Oversight’s fiscal year 2008 assessment also noted  improvements but recommended further areas for attention. These  recommendations included ensuring that self-assessments address all  aspects of each assessment topic, such as classified information  protection and physical security. LANL officials said training on  conducting self-assessments is currently being developed.
Control and accountability system for special nuclear material. DOE  requires that LANL maintain a system for tracking special nuclear material  inventories, documenting nuclear material transactions, issuing periodic  reports, and detecting potential material losses. According to LANL and  Site Office security officials, the system LANL uses, known as the Material  Accountability and Safeguards System (MASS), is over 20 years old and  was developed with a now outdated computer language. While LANL has  not reported any incidents involving the loss or diversion of special  nuclear material in recent years, the Site Office and Office of Independent  Oversight raised concerns in fiscal years 2002, 2003, 2005, 2006, and 2007  related to LANL’s system. Such concerns included the absence of controls  in MASS to detect internal transfers of nuclear materials that could result  in safeguards category limits being exceeded in time to prevent the  transfer. According to a senior LANL official, a project to upgrade the  system was approved to proceed in January 2008 and is scheduled to be  completed by February 2010 at a cost of $3 million.
section_title: LANL’s Footprint Reduction Initiative Reduced Maintenance Costs More Than It Addressed Facility Security
paragraphs: LANL’s initiative to reduce the physical footprint of its facilities focuses on  eliminating facilities that are in poor and failing condition, thus reducing  the laboratory’s deferred maintenance burden, which according to a LANL  estimate, totaled over $320 million in fiscal year 2007. Additionally, the  initiative focuses on facilities that have no enduring mission need, thus  avoiding future operations costs. While the footprint reduction plans put  together by LANL’s Weapons Physics and Weapons Engineering  directorates both state that security improvements would result from  facility reduction, LANL officials responsible for setting priorities for  reducing facilities told us that the facilities’ security problems were not  seriously considered when planning for footprint reduction. In that regard,  we found that of the 77 facilities LANL counted toward meeting its  footprint reduction goal of 400,000 square feet in fiscal year 2007, only 2  facilities contained any classified resources. Specifically, these two  facilities included (1) a large, Limited Area administrative facility that  contained six vault-type rooms, stored classified parts, and provided  access to LANL’s classified network; and (2) a Limited Area facility used  for high explosives work and that provided access to LANL’s classified  network. Closing vault-type rooms and eliminating classified network  access points has the potential to improve security at LANL by reducing or  consolidating the number of classified resources that require security  protection. In the case of the administrative building described above, the  facility was replaced by a newly constructed administrative building that  has 11 vault-type rooms—5 more than the original administrative building  contained. However, in commenting on our report, LANL officials said that  the new administrative building incorporates more modern safety and  security standards than the original administrative building. To this end,  the security benefits derived from LANL’s fiscal year 2007 footprint  reduction efforts are unclear.
In commenting on our report, LANL officials noted that Security and  Safeguards Requirement Integration Teams participate in footprint  reduction projects to ensure that facilities—and the classified information  they house or store—remain secure during the closure process. While  subsequent documentation provided by the leader of LANL’s physical  security organization does show that Security and Safeguards  Requirement Integration Teams assist with facility reduction efforts in this  manner, it does not show that these teams evaluate facility security  weaknesses as criteria for identifying which facilities at LANL should be  closed.
section_title: LANL’s and NNSA’s Management Approaches to Sustain Security Improvements Over the Long-Term Are in the Early Stages of Development or Contain Weaknesses
paragraphs: DOE, NNSA, and even LANL officials have found that LANL has  consistently failed to sustain past security initiatives. For example, in  DOE’s 2007 Compliance Order, the Secretary of Energy wrote that  although some corrective steps were taken by the previous LANL  contractor in response to security incidents, the October 2006 incident  demonstrated that problems continued. Similarly, NNSA’s Office of  Defense Nuclear Security noted in 2007 that after each security incident at  LANL, the laboratory has responded by changing policies and procedures  and investing in new equipment and systems. The result, according to the  Office of Defense Nuclear Security, had been a steady improvement in  security through mitigation of immediate problems; however, the inability  to halt what NNSA has characterized as a string of incidents involving the  failure to account for classified information demonstrated that LANL had  not identified and addressed the root causes of security incidents. In its  own analysis of the October 2006 security incident, LANL determined that  the incident’s root cause was inconsistent and ineffective implementation  of Integrated Safeguards and Security Management principles in its  classified work, despite the fact that a DOE policy governing  implementation of Integrated Safeguards and Security Management  throughout the DOE complex had been in place since at least 2001.
In acknowledging the problem of sustaining security improvements, LANL  officials described three management approaches they intend to use to  ensure that security improvements currently being implemented are  sustained over the long-term: (1) DOE’s July 2007 Compliance Order, (2)  LANL’s Contractor Assurance System, and (3) NNSA’s annual performance  evaluation plans. However, each management approach cited by LANL  officials either contains weaknesses that will affect LANL’s ability to fully  ensure security initiatives are sustained or is in an early stage of  development. Furthermore, our January 2007 findings regarding the NNSA  Site Office’s capacity to oversee security at LANL have not yet been  addressed.
subsections: section_title: DOE’s July 2007 Compliance Order Is Not Designed to Be a Tool for Management Change
paragraphs: LANL officials told us that completing the efforts required by DOE’s July  2007 Compliance Order would ensure that security improvements are  sustained. However, the Compliance Order is not designed to provide  LANL with a management tool for sustaining long-term security initiatives  or for future security improvement. Rather, it serves as a mechanism for  DOE to enforce financial penalties against LANS should LANL fail to  implement the required actions that address past security problems.  Specifically, the actions required by the Compliance Order must be  completed by December 2008. If they are not completed, LANS is subject  to civil penalties of up to $100,000 per violation per day.
In September 2007 LANL submitted an integrated corrective action plan to  DOE in partial fulfillment of Compliance Order requirements. This plan  outlined the 27 actions LANL intends to take to address seven critical  security issues identified as having contributed to the October 2006  security incident and to meet the requirements of the Compliance Order.  Of these seven critical security issues, five pertain to the physical security  of classified information and resources. These five issues include the  following:    LANL has not consistently or effectively implemented the principles and  functions of Integrated Safeguards and Security Management in the  management of classified work;   LANL’s classified information security training is not fully effective;    LANL has not provided effective leadership and management in protecting  classified information;    LANL’s assurance system has not effectively resolved classified  information protection issues; and   LANL has not, in some cases, effectively sustained corrective actions.
The majority of the actions LANL outlined in its plan to address these  issues are discrete, rather than representing long-term efforts aimed at  improving LANL’s overall security performance. They include, for  example, documenting that managers have met with employees to  communicate and reinforce expectations with regard to integrating the  principles of Integrated Safeguards and Security Management into daily  work activities; implementing personnel actions with respect to the  October 2006 security incident, such as placing formal reprimands in  employees’ personnel files and putting employees on unpaid leave; and  revising the laboratory’s policy on escorting visitors into vault-type rooms.  While actions of this type should contribute to security improvements in  the short-term, discrete actions such as these do not ensure that security  initiatives will be sustained over time. Moreover, while the Compliance  Order provides a mechanism to assess financial penalties if LANL fails to  implement the actions included in its integrated corrective action plan, the  mechanism will no longer be available once actions are concluded in  December 2008.
section_title: LANL’s Contractor Assurance System Is Not Fully Developed or Deployed
paragraphs: LANL officials told us they expect to use the laboratory’s new Contractor  Assurance System to ensure that security improvements are sustained  over time once actions under the Compliance Order are complete in  December 2008. However, we found that the extent to which LANL will be  able to rely on the Contractor Assurance System to ensure long-term  sustainability of security improvements after December 2008 is unclear for  two reasons. First, LANL officials told us that the system will not be fully  developed or implemented by the time LANL completes its Compliance  Order efforts in December 2008. Second, an internal assessment of the  Contractor Assurance System found that (1) there is a lack of evidence  that the system is being effectively deployed across the laboratory and (2)  the measures included in the system may not be meaningful.
LANL is designing the Contractor Assurance System to measure and track  performance from the top down. Top-level measures, such as meeting  program milestones set by NNSA or on-time delivery of products, are in  place. Lower-level measures, such as measures of the work processes used  to meet milestones and deliverables, are still in development. LANL  officials responsible for designing the Contractor Assurance System told  us that these lower-level measures are critical to the success of the system  because they will provide the data that indicate where work processes are  breaking down before milestones or deliverables are delayed. Officials  also said that trend analysis from data associated with lower-level  measures would indicate areas where security concerns are developing.  During fiscal year 2008, LANL officials said they plan to focus on  developing lower-level measures, but they will not complete these  measures by December 2008. A senior official in NNSA’s Site Office told us  it could be another 3 to 4 years before the Contractor Assurance System is  fully implemented.
In its first internal assessment of the Contractor Assurance System  completed in September 2007, LANL found that while the system was  operational and met the requirements of the contract between NNSA and  LANS, it contained significant weaknesses. For example, while upper-level  management uses the system, there are gaps in its use across LANL’s  technical divisions and facilities. According to the assessment, these gaps  could make the system ineffective. In addition, a LANL official told us that  while managers are required to attend training on using the system, many  do not yet recognize its usefulness. Moreover, the assessment found that  because lower-level process measures have not yet been implemented, it  may be difficult to use the system for its stated purpose—to improve  management and performance. For example, the assessment found that  the Contractor Assurance System cannot yet measure key management  and performance indicators, such as budget performance, fiscal  accountability, and customer satisfaction or dissatisfaction with LANL  products and services. In this regard, a LANL official told us that the  Contractor Assurance System is not yet mature enough for laboratory  officials to understand the best ways to use it and that LANL managers are  still identifying which processes they need to measure in order to gather  relevant performance data. In commenting on our report, LANL officials  agreed with our assessment of the Contractor Assurance System and  noted that efforts to improve its maturity are ongoing.
section_title: NNSA’s Performance Evaluation Plans Principally Focus on Achieving Compliance with DOE Requirements and Do Not Sufficiently Reward LANL’s Security Program for Improved Security Performance
paragraphs: LANL officials told us the laboratory also plans to realize sustained  security improvements by meeting the security-related performance  incentives in the annual performance evaluation plans NNSA uses to  measure performance and determine an award fee. The fiscal year 2007  and fiscal year 2008 performance evaluation plans contain both objective  and subjective measures of security performance that are tied to financial  incentives. Objective measures of security performance use specific and  discrete criteria that are not judgmental, such as achieving a particular  score on a security evaluation, while subjective measures of security  performance use broad criteria that are judgmental, such as effectiveness  of security planning. According to NNSA’s Site Office, the two sets of  measures complement each other and allow NNSA to withhold incentive  fees when its expectations for effective management and leadership are  not met. Site Office officials told us it is possible LANL could achieve  success in all of the objective security measures but fail to earn award fees  on the basis of its performance assessed with subjective measures.
We found that the objective measures included in the performance  evaluation plans reward LANL for complying with existing DOE security  requirements but do not sufficiently reward LANL for improving its  security performance. Of the $51.3 million potentially available for LANS’s  total performance-based incentive fee in fiscal year 2008, only $1.43  million is associated with objective measures of security performance. Of  this total, $1.4 million is an incentive for compliance with DOE security  requirements, and only $30,000 is allocated to forward-looking and  laboratorywide security improvement. According to a senior NNSA  security official, compliance with DOE requirements does not assure that  LANL’s security program is functioning effectively, and actions to achieve  compliance may not be valuable unless the actions also address  management or operational needs. Specifically, in fiscal year 2008, we  found the following objective provisions:    $800,000 to achieve the milestones LANL sets in an annual security  operating plan, which aligns LANL’s security activities with its budget. The  fiscal year 2008 annual security operating plan provides a roadmap for  LANL security program compliance with DOE requirements and includes  milestones such as submitting the Site Safeguards and Security Plan,  conducting security training, publishing security policy, completing  quarterly equipment maintenance requirements, and conducting  inventories of special nuclear material.    $200,000 to achieve an overall satisfactory rating on the Site Office’s  annual security survey.    $400,000 to achieve 90 percent of the milestones associated with the  ongoing Phase 2 Nuclear Materials Safeguards and Security Upgrade  construction project.    $30,000 to develop a forward-looking Safeguards and Security  Modernization Plan, which according to a senior Site Office official, is in  progress. This official said the Site Office expects LANL to deliver a plan  that can begin to be implemented in fiscal year 2009, if the budget allows.  However, the official also said the Site Office has not provided any criteria  or guidance to LANL about what the plan should include.
The objective measures for security performance established under the  fiscal year 2007 Performance Evaluation Plan were similar to those  established in fiscal year 2008. Specifically, for fiscal year 2007, we found  the following incentive provisions:    about $1.2 million to achieve the milestones in the fiscal year 2007 annual  security operating plan, which were as compliance-oriented as they are in  the fiscal year 2008 annual security operating plan;   about $670,000 to ensure that inventories of special nuclear material  accurately detected any gain or loss of material, excluding legacy material;   about $560,000 if DOE validated that LANL’s Safeguards and Security  program was rated “effective” on five of seven ratings contained in the  Office of Independent Oversight assessment and was rated overall  “satisfactory” in the Site Office survey; and    about $270,000 to achieve all of the milestones included in the fiscal year  2007 annual operating plan for cyber security.
Financial incentives associated with objective measures of security  performance totaled nearly $2.7 million in fiscal year 2007. The entire $2.7  million encouraged LANL to comply with existing DOE requirements for  effective security operations. LANL earned $2.4 million of the $2.7 million  potentially available, despite the occurrence of the October 2006 security  incident.
NNSA increased the potential performance award fee associated with  subjective measures for laboratory performance in fiscal year 2007 as a  result of the October 2006 security incident and also included subjective  measures in the fiscal year 2008 Performance Evaluation Plan. These  measures evaluate LANS’s leadership in integrating programs, including  security, across the laboratory and achieving exemplary overall laboratory  performance. We found that these measures are neither compliance-based  nor forward-looking, but rather focus on overall quality of performance. In  fiscal year 2007, LANL received its lowest performance rating in this  category, earning only 35 percent of the over $10 million potentially  available. LANL’s low performance rating directly reflected the occurrence  of the October 2006 security incident. In fiscal year 2008, the award fee  potentially available for successful achievement of subjective measures is  $10.3 million, approximately $125,000 more than in fiscal year 2007. One of  the 20 criteria NNSA will consider in determining the fiscal year 2008  award fee in this area is specific to overall performance, timeliness, and  effectiveness of security commitments. A senior Site Office official told us  that security performance will also be considered when NNSA evaluates  overall laboratory leadership and management. However, according to Site  Office officials, NNSA has not yet determined how it will weigh security  against other criteria, such as Weapons or Threat Reduction program  performance, when determining how much of the award fee LANS will  earn for achieving subjective performance measures.
section_title: Prior Findings on the NNSA Site Office’s Capacity to Oversee Security at LANL Have Not Yet Been Addressed
paragraphs: While it is important for LANL to continue to improve the performance of  its security programs through the use of the management tools previously  discussed, the Site Office must still directly oversee LANL’s security  program. Specifically, the Site Office is required to conduct a  comprehensive annual survey of LANL’s Safeguards and Security  performance to assure DOE that the site is appropriately protected. These  surveys must be validated through, among other things, document reviews,  performance testing, direct observation, and interviews. To conduct these  surveys, as well as routine oversight, the Site Office must be appropriately  staffed with trained professionals.
In our January 2007 report on the effectiveness of NNSA’s management of  its security programs, we found that NNSA’s site offices—including the  Los Alamos Site Office—suffered from shortages of security personnel,  lacked adequate training resources and opportunities for site office  security staff, and lacked data to determine the overall effectiveness of its  Safeguards and Security program. We reported that these factors  contributed to weakness in NNSA’s oversight of security at its laboratories  and production facilities. During the course of this review, senior Los  Alamos Site Office officials confirmed that these problems persist. For  example, they said NNSA has not developed a strategy for determining  long-term staffing needs at the Site Office. As of October 2007, the Site  Office employed 13 security staff—enough for one person to oversee each  of the topical areas the Site Office had to evaluate. This staffing level,  officials said, was sufficient to cover only 15 percent of LANL’s facilities.  More recently, a senior security official at the Site Office said security  staffing levels have decreased since October 2007. Furthermore, while  NNSA had identified the need to train and certify Site Office security  personnel in nuclear material control and accountability, vulnerability  assessment, and personnel security, no specific funding for this training  has been made available according to Site Office officials. According to  the Los Alamos Site Office’s Site Manager, the Site Office must employ  expertise sufficient to determine, through effective oversight activities,  whether LANL is implementing the policies and plans that it puts forward.
section_title: Conclusions
paragraphs: Accomplishing the mission of conducting world-class scientific work at  Los Alamos National Laboratory requires the laboratory to maintain a  security program that effectively addresses current security risks,  anticipates future security risks, and ensures that initiatives to address  both current and future risks are sustained over the long-term. While  LANL has focused its attention on fixing current security risks in reaction  to recent incidents and has implemented initiatives that address a number  of previously identified security concerns, LANL has not developed the  long-term strategic framework necessary to ensure that these fixes are  sustained over time. In addition, some important security problems  identified in external evaluations have not been fully addressed. Moreover,  our review pointed out the potential for cyber security risks to increase as  a result of actions to improve physical security. Consequently, while LANL  security officials have indicated their desire to prevent future security  incidents, we believe that only a long-term, integrated strategy can help  ensure that they will succeed.
Continuously implementing security improvement initiatives over the long- term and proactively addressing new security risks also requires an  effective process for assessing contractor performance on security  activities. We believe the relative immaturity of and weaknesses in the  management approaches LANL and NNSA intend to use to ensure that  security improvements are sustained may limit their effectiveness and  result in a failure to sustain security improvement initiatives. Specifically,  DOE’s Compliance Order requires LANL to take immediate actions to  improve security deficiencies, but the Compliance Order does not serve as  a tool for ensuring these actions are sustained. In addition, we have doubts  that LANL’s Contractor Assurance System can sustain security  improvement initiatives until it is sufficiently mature, which may take  several years. Therefore, we believe performance evaluation plans hold  the most promise for ensuring that security initiatives are sustained over  the long-term. When the LANL management and operating contract was  competed in 2005, laboratory security was a key consideration. NNSA  stated that it intended to put a contract in place, along with an annual  performance evaluation plan, that would communicate its priorities and  provide incentives to accomplish those priorities. However, despite  NNSA’s persistent statements about the importance of security, we believe  that the performance evaluation plans that NNSA has issued under the  new LANS contract do not provide meaningful financial incentives for  strategic security improvements or communicate to LANL that security is  a top federal priority. Rather than reward LANL for principally complying  with current DOE security requirements, in our view, financial incentives  in performance evaluation plans should be focused on the long-term  improvement of security program effectiveness to a greater extent. We  believe that LANL needs to develop a strategic plan for laboratory security  that is comprehensive, contains solutions to address all previously  identified security findings, takes an integrated view of physical and cyber  security, provides opportunities for periodic updates to ensure additional  security risks are identified and addressed, and is tied to meaningful  performance incentive fees.
Finally, as LANL plans for further reductions in its facility footprint, it has  an opportunity to assess facilities’ security weaknesses, as well as their  deferred maintenance burdens and their anticipated contributions to  future program missions, when it first determines which facilities should  be reduced. In our view, including an assessment of facilities’ security  weaknesses in this initial decision-making process would enhance the  security benefits derived from the effort to reduce the footprint.
section_title: Recommendations for Executive Action
paragraphs: To improve security at Los Alamos National Laboratory, we recommend  that the Secretary of Energy and the Administrator of NNSA require LANL  to develop a comprehensive strategic plan for laboratory security that (1)  addresses all previously identified security weaknesses, (2) contains  specific and objective measures for developing and implementing  solutions that address previously identified security weaknesses and  against which performance can be evaluated, (3) takes an integrated view  of physical and cyber security, (4) focuses on improving security program  effectiveness, and (5) provides for periodic review and assessment of the  strategic plan to ensure LANL identifies any additional security risks and  addresses them.
To ensure sustained improvement of LANL’s security program, we  recommend that the Administrator of NNSA provide meaningful financial  incentives in future performance evaluation plans for implementation of  this comprehensive strategic plan for laboratory security.
To enhance security initiatives already under way at LANL, we  recommend that NNSA require that future laboratory plans for footprint  reduction include specific criteria for evaluating facilities’ security risks  when making initial selections of facilities for footprint reduction.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided NNSA with a copy of this report for review and comment.  NNSA did not specifically comment on our recommendations. However,  NNSA stated that while there is still much to be accomplished, NNSA  believes that progress has been made in addressing reductions in classified  parts, classified documents, vaults, and vault-type rooms, as well as with  the implementation of engineered controls. While we acknowledge LANL’s  progress in our report, NNSA noted that several security problems at  LANL addressed in the report—specifically, nonstandard storage of  classified parts and the maturation of contractor assurance systems—are  issues for the broader nuclear weapons complex as well. Overall, we  continue to believe that the key issue is that NNSA and LANL cannot  ensure that initiatives such as these will be sustained, or that changing  security vulnerabilities will be identified and proactively addressed,  without implementing our recommendations for a long-term strategic  framework for security that effectively assesses contractor performance.  NNSA’s comments on our draft report are included in appendix V. NNSA  also provided technical comments from LANL, which we have  incorporated into this report as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report, we plan no further distribution until 30 days from the report  date. At that time, we will send copies of this report to interested  congressional committees, the Secretary of Energy, and the Administrator  of NNSA. We will also make copies available to others upon request. In  addition, the report will be made available at no charge on the GAO Web  site at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512- 3481 or aloisee@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix VI.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: To identify Los Alamos National Laboratory’s (LANL) major programs, we  collected Department of Energy (DOE) and LANL budget, program, and  activities documentation. This documentation included data on work  LANL conducts for other federal agencies and nonfederal organizations, as  well as projects LANL undertakes at its own direction. We used this  documentation to identify major program categories and to group LANL’s  activities within them. Specifically, we identified three major program  categories—Nuclear Weapons Science, Threat Reduction Science and  Support, and Fundamental Science and Energy; and two key support  programs—Environmental Programs and Safeguards and Security. LANL  officials reviewed and validated our results, and based on feedback they  provided, we made adjustments as needed.
To determine the extent to which LANL’s major and support programs rely  on classified resources to meet their objectives, we collected information  on classified resource use on a facility basis. Although we initially  requested data on each program’s use of classified resources, this data was  not available because LANL maintains this data on a facility basis. LANL’s  facilities are shared in a matrix management approach by the laboratory’s  64 technical divisions to execute programs. To enhance the accuracy and  completeness of the facility-level information we collected, we developed  a data collection instrument for LANL officials to complete that included  specific data fields and definitions.
To select the facilities for inclusion in this data collection instrument, we  used LANL’s real property catalogue, which lists each of the 1,283 facilities  on the laboratory’s campus. From this list, we excluded facilities  containing only utility services, such as steam plants, and facilities with  full-time occupancies of fewer than 10 people, unless the facility, based on  its use for experiments, could potentially house or store classified  resources. We also allowed like-facilities, such as individual bunkers used  for high explosives testing, to be grouped together as one facility. Using  these definitions, LANL officials determined that 633 facilities should be  included in our review. We compared the facilities LANL had selected with  the original real property list and agreed the 633 facilities selected by  LANL represented the appropriate facilities for our analysis.
Using the data collection instrument we had provided, LANL officials  entered information on (1) the security protection level of each of the 633  facilities, as described by DOE Manual 470.4-2, Physical Protection, which  defines different levels of security depending on the type and amount of  classified resources these facilities store or house; (2) the types of  classified resources housed or stored in each facility; (3) where practical,  how many of each type of classified resource each facility stores or  houses; (4) which of the laboratory’s major and support programs rely on  the classified resources in each facility; and (5) how much space each of  the laboratory’s major and support programs use in each facility as a  percentage of that facility’s gross square footage.
We analyzed the data by aggregating facilities by program and apportioned  classified resource usage according to three categories: (1) a program is  the exclusive user of all of the space in a facility storing or housing  classified resources, (2) a program is the primary user of space in a facility  storing or housing classified resources because it uses more space than  any of the other major or support programs at LANL, and (3) a program  uses some space in a facility storing or housing classified resources.  Because our analysis focused on facilities used for one of LANL’s three  major programs, we excluded facilities only used by laboratory support  programs, resulting in final analysis of 607 of the original 633 facilities.
To evaluate the completeness and accuracy of the information LANL  officials provided, we compared the data with other documentary and  testimonial evidence we collected during the course of our review to  ensure that the data were consistent. For example, we had received  briefings about the reduction of vault-type rooms at LANL, and we ensured  that the total number of vault-type rooms LANL program managers had  discussed with us during these briefings matched the total number of  vault-type rooms identified in the facility data LANL provided. In addition,  we compared the data provided on the security levels of specific facilities  with our physical observations of security safeguards at these same  facilities during site visits to determine whether the data LANL officials  provided were consistent with our experiences at those facilities. We also  conducted logic and electronic tests of the data and followed up with  LANL officials to resolve discrepancies. We determined that these data  were sufficiently reliable for our purposes.
To identify the initiatives LANL is taking to consolidate its classified  resources and reduce the scope of its physical footprint, we collected and  reviewed data on LANL’s plans for consolidating classified resources and  interviewed key LANL, National Nuclear Security Administration (NNSA),  and DOE officials. We also toured LANL facilities that house and store  classified resources, such as vault-type rooms and the super vault-type  room, and visited a facility where classified nuclear weapon parts are  being destroyed. In addition, we identified the buildings that LANL was  proposing to close as part of its footprint reduction effort and, using the  information provided by LANL officials in response to our data collection  instrument, determined whether closing these buildings could improve  LANL’s security posture by eliminating or consolidating the classified  resources that may have been stored or housed in them as a result of  footprint reduction. Finally, we visited sites currently undergoing closure  and sites proposed for consolidation and reduction.
To determine if LANL’s security initiatives address previously identified  security concerns, we reviewed security evaluations conducted by DOE’s  Office of Independent Oversight and NNSA’s Site Office from fiscal years  2000 to 2008 and identified the security concerns raised by these  evaluations. We then compared LANL’s current initiatives with the results  of our review of the security evaluations to determine if all of the security  concerns were being addressed. We discussed the results of this analysis  with DOE, NNSA headquarters, NNSA Site Office, and LANL contractor  officials. In addition, we reviewed relevant DOE Office of Inspector  General reports.
To determine whether the management approach LANL is implementing  under the new LANS contract is sufficient to ensure that LANL’s security  improvement initiatives are fully implemented and sustainable, we asked  LANL and NNSA to identify how they intended to sustain security  improvements and ensure the effectiveness of LANL’s security. We  reviewed the management approaches they identified, specifically (1)  LANL’s actions in response to DOE’s July 2007 Compliance Order resulting  from the October 2006 security incident, (2) the security-related aspects of  the new Contractor Assurance System LANL is implementing, and (3) the  incentives being used to improve security at LANL under the 2007 and  2008 Performance Evaluation Plans. As part of this review, we determined  the extent to which each of these management approaches could sustain  security improvement initiatives over the long-term and the extent to  which these management approaches focused on either compliance with  DOE security requirements or improved effectiveness of LANL’s security  program. We discussed these management approaches with LANL, NNSA  headquarters, and NNSA Site Office officials.
We conducted this performance audit from March 2007 to June 2008 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
section_title: Appendix II: LANL’s NNSA Supported Nuclear Weapons Science Programs
paragraphs: LANL conducted work on 41 Nuclear Weapons Science programs in fiscal  year 2007, all of which were supported by NNSA. When program  objectives are shared, they have been combined in the table below.
Supports the operation and maintenance of facilities and infrastructure  that support the accomplishment of Nuclear Weapons Science  programmatic missions   Re-establishes an immediate capability to manufacture pits in support of  the nuclear weapons stockpile, plans for long-term pit manufacturing  capability, and manufactures specific quantities of W88 pits   Supports the construction of new facilities and significant upgrades to  existing facilities  Provides the advanced computing infrastructure—hardware, software,  and code—to simulate nuclear weapon performance  Conducts research, development, and production work that is applicable  to multiple nuclear weapon systems, as opposed to a specific weapons  system (for example, basic research on critical factors of nuclear weapon  operations)
section_title: Appendix III: LANL’s NNSA Supported Threat Reduction Science and Support Programs
paragraphs: LANL conducted work on 12 Threat Reduction Science and Support  programs in fiscal year 2007 that were supported by NNSA. Of these 12  programs, 9 had budgets in fiscal year 2007 that exceeded $1 million each.  Information about these programs is in the table below.
section_title: Appendix IV: LANL’s Fundamental Science and Energy Programs Supported by DOE
subsections: section_title: Supports 35 programs at LANL that focus on research and development in carbon capture and sequestration, unconventional fuels, fuel utilization, climate, and predicting engineered natural systems
section_title: Appendix V: Comments from the National Nuclear Security Administration
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, James Noel, Assistant Director;  Nabajyoti Barkakati; Allison Bawden; Omari Norman; Rachael Schacherer;  Rebecca Shea; Carol Herrnstadt Shulman; and Greg Wilshusen made key  contributions to this report.