National Nuclear Security Administration: Security and Management Improvements Can Enhance Implementation of the NNSA Act
Released: 2007-01-31T00:00:00

Letter

Background

NNSA operates three national laboratories that design nuclear weapons— Lawrence Livermore National Laboratory, California; Los Alamos National Laboratory, New Mexico; and the Sandia National Laboratories, New Mexico and California; and four nuclear weapons production sites—the Pantex Plant, Texas; the Y-12 National Security Complex, Tennessee; the Kansas City Plant, Missouri; and parts of the Savannah River Site, South Carolina; as well as the Nevada Test Site.

To implement its programs, NNSA received about $9.1 billion for fiscal year 2006, including almost $6.4 billion for its nuclear weapons activities, about $1.6 billion for its defense nuclear nonproliferation programs, and about $782 million for the Naval Reactors program. NNSA’s appropriation also included about $766 million to provide security at its sites. NNSA requested over $9.3 billion for fiscal year 2007, including $6.4 billion for its nuclear weapons activities, $1.7 billion for its defense nuclear nonproliferation programs, and $795 million for the Naval Reactors program. According to NNSA’s Future Years Nuclear Security Program plan, between fiscal years 2007 and 2011, NNSA is proposing to spend almost $48.5 billion on its nuclear weapons, nuclear nonproliferation, and naval reactors programs.

As noted earlier, for several years before NNSA was established, external studies found problems with the organization and operation of what is now NNSA’s principal organization—DOE’s Office of Defense Programs. These studies cited continuing problems in the areas of overall management, organization, priority setting, and maintenance of a viable infrastructure and workforce. Most influential in the creation of NNSA was the study conducted by a Special Investigative Panel of the President’s Foreign Intelligence Advisory Board. Prepared in response to a series of security problems, including public access to classified documents at the Los Alamos National Laboratory, the Board found that DOE was a dysfunctional bureaucracy incapable of reforming itself and that reorganization was clearly warranted to resolve security and counterintelligence problems. As noted earlier, the Board urged the Congress to create a new organization that, whether established as an independent agency or a semi-autonomous entity within DOE, should have a clear mission, streamlined bureaucracy, and drastically simplified lines of authority and accountability. To correct the problems identified by the Board and others, in 1999, the Congress created the NNSA.

For the last several years, we have monitored NNSA’s actions to implement the NNSA Act for this Subcommittee and the Special Oversight Panel on Department of Energy Reorganization, House Armed Services Committee. For example, in April 2001, we testified that NNSA’s efforts to establish a new organization looked promising. However, we highlighted the need for NNSA to clearly define the roles and responsibilities of headquarters and field staff and to establish clear lines of authority between NNSA and its contractors, among other things. In May 2001, NNSA announced plans to reorganize its headquarters operations. In December 2001, however, we found that NNSA’s plans for the headquarters reorganization did not contain a clear definition of the roles and responsibilities of the headquarters organizational units.

In addition to reorganizing its headquarters, in February 2002, NNSA proposed reorganizing its entire operation to solve important, long- standing issues. In February 2002, we testified that, with the proposed new organizational structure, resolution of NNSA’s long-standing organizational issues appeared to be within its grasp. However, we noted that NNSA’s lack of a long-term strategic approach to ensuring a well- managed workforce precluded it from identifying its current and future human capital needs, including the size of the workforce; its deployment across the organization; and the knowledge, skills, and capabilities needed to fulfill its mission. In December 2002, the Administrator of NNSA implemented the proposed reorganization.

Our May 2003 report on the management of NNSA’s security program identified similar concerns about NNSA’s security organization and management. Specifically, we found that NNSA (1) had not fully defined clear roles and responsibilities for its headquarters and site security operations and (2) had shortfalls at its site offices in the total number of staff and in expertise, which could make it more difficult for the site offices to effectively oversee security activities. We therefore concluded that NNSA could not be assured that its contractors were working to maximum advantage to protect critical facilities and material from individuals seeking to inflict damage.

Finally, in June 2004, we found that NNSA’s reorganization had addressed some past problems by better delineating lines of authority and improving communication. However, we also found that NNSA’s reorganization had not ensured that the agency had sufficient staff with the right skills in the right places because it had downsized its federal workforce by about 17 percent without first determining the critical skills and capabilities needed to meet its mission and program goals.

Additional Action Needed to Improve NNSA’s Security Program

Although NNSA has begun to build an effective headquarters security organization, it still cannot demonstrate that all of its security program objectives are being met at all of its sites. Specifically, we found that the results of internal and independent security oversight assessments have identified weaknesses in physical security at several NNSA sites, including the Nevada Test Site, the Sandia National Laboratories, and the Y-12 National Security Complex; and weaknesses in cyber security throughout NNSA. The following factors have contributed to this situation: Lack of consistent leadership and direction for its security activities.

For several years, the NNSA headquarters security organization experienced turnover in the position of Chief of the Office of Defense Nuclear Security. Specifically, four individuals have occupied the position since NNSA’s creation, often in an acting capacity. In addition, these chiefs have reported to different levels within the organization. The current Chief is a permanent appointee, reporting directly to the NNSA administrator, and he has taken a number of steps to develop an effective headquarters security organization.

Security personnel staffing shortages at site offices. Having sufficient staff to oversee the security programs of its contractors continues to be a problem. For example, since NNSA became operational, key site offices, such as the Los Alamos Site Office, have experienced staffing shortfalls.

As a result, sites are limited in their ability to effectively oversee contractors’ security activities.

Lack of adequate training resources and opportunities for site office security staff. NNSA has not implemented a training program that provides NNSA federal security officials with the skills needed to effectively oversee contractor security programs. In addition, NNSA site offices often do not have all the resources needed to meet training needs. For example, according to site office officials, the Los Alamos Site Office did not receive training funds for fiscal year 2006 and the Nevada Site Office received a minimal training budget for its security staff.

Lack of data to gauge program effectiveness. NNSA does not have complete data for tracking security deficiencies identified by security oversight reviews and, as a result, does not have information regarding the overall effectiveness of its safeguards and security program. NNSA officials told us that while they believe security across the weapons complex has improved, NNSA does not have sufficient data to support this assertion. In addition, NNSA has not implemented a formal process for sharing best practices or lessons learned to guide security improvements. While best practices and lessons learned have been communicated informally, a formal process could help ensure that previously identified security deficiencies, such as the retrieval of badges from terminated employees at one NNSA site, are reviewed and corrected as necessary at other NNSA field locations.

DOE and NNSA Have Not Yet Fully Determined How NNSA Should Operate as a Separately Organized Agency within DOE

While NNSA has focused considerable attention on reorganizing its internal operations, it and DOE have continued to struggle with establishing how NNSA should operate as a separately organized agency within the department. Several factors have contributed to this situation. First, DOE and NNSA did not have a useful model to follow for establishing a separately organized agency in DOE. The Board’s June 1999 report suggested several federal agencies, such as the National Oceanic and Atmospheric Administration in the Department of Commerce, which could be used as a model for NNSA. However, we found that none of the officials from these agencies considered their agency to be separately organized or believed that their agency’s operational methods were transferable to NNSA. Second, DOE’s January 2000 implementation plan, which was required by the NNSA Act, did not define how NNSA would operate as a separately organized agency within DOE. Instead reflecting the opposition of the then DOE senior leadership to the creation of NNSA, the implementation plan “dual-hatted” virtually every significant statutory position in NNSA with DOE officials, including the Director of NNSA’s Office of Defense Nuclear Counterintelligence and General Counsel. As we testified in April 2001, this practice caused considerable concern about NNSA’s ability to function with the independence envisioned in the NNSA Act. Dual-hatting was subsequently forbidden by an amendment to the NNSA Act.

As a result, although some NNSA programs have set up procedures for interacting with DOE, other programs have not, resulting in organizational conflict. For example, DOE made a commitment to issuing NNSA-specific acquisition procedures in its January 2000 implementation plan for NNSA, but it has not done so. According to DOE Office of General Counsel officials, the department subsequently determined that NNSA-specific procedures were inconsistent with the Federal Acquisition Regulation, the NNSA Act, and the January 2000 implementation plan. According to both DOE and NNSA officials, since 2004 the department has blocked NNSA’s efforts to issue its own acquisition regulations. As a result, according to NNSA officials, NNSA has had to issue a series of deviations to the DOE acquisition regulations to carry out NNSA acquisition policies in areas such as negotiating a more effective contract fee arrangement and awarding additional years to a contract’s term.

Even where formal procedures have been developed, interpersonal disagreements have hindered effective cooperation. Most notable in this regard has been the longstanding conflict between NNSA and DOE counterintelligence offices. Specifically, as our report documents, NNSA and DOE counterintelligence officials have disagreed over (1) the scope and direction of the counterintelligence program, (2) their ability to jointly direct staff in the headquarters counterintelligence program offices, (3) the allocation of counterintelligence resources, (4) counterintelligence policymaking and (5) their roles and responsibilities in handling specific counterintelligence matters—in particular with regard to the department’s handling of the well-publicized mid-2005 intrusion into an unclassified NNSA computer system and removal of the names and social security numbers of 1,502 individuals working for NNSA. Subsequently, the Congress amended the NNSA Act to consolidate the counterintelligence programs of DOE and NNSA under the Department of Energy.

In this environment, concerns about NNSA’s organizational status have persisted. Most notably, a January 2006 report by the Defense Science Board called for the removal of NNSA from DOE and the creation of a new, independent National Nuclear Weapons Agency. However, former senior DOE and NNSA officials with whom we spoke generally did not favor removing NNSA from DOE.

Several Management Issues Need to be Resolved for NNSA to Become Fully Effective

In addition to identifying the underlying issue of NNSA’s relationship to DOE, we identified the following four other management areas where additional NNSA actions could strengthen its ability to manage the nuclear weapons complex if it took further action.

Human capital. NNSA has made progress in developing a human capital strategy. However, DOE and NNSA have not conducted a systematic, detailed analysis of how many staff NNSA needs in relation to DOE. As a result, we identified areas where potential staff imbalances have affected NNSA’s ability to operate separately from DOE. For example, NNSA’s Office of General Counsel has 35 attorneys, including the General Counsel, to provide NNSA legal analysis, while the rest of DOE has 277 attorneys. According to NNSA’s General Counsel, his office would need 15 to 20 additional attorneys to fully handle NNSA’s legal workload with minimal assistance from DOE. Currently, NNSA relies on DOE’s Office of General Counsel to perform a significant portion of its legal work.

Project management. While both DOE and NNSA have initiated efforts to improve project management, NNSA reported in November 2006 that about 16 percent of NNSA projects were at risk of breaching their cost baseline, schedule baseline or both. We identified seven areas for improvement that would foster a stronger culture for effective project management. For example, DOE’s Project Assessment and Reporting System—a Web-based system for keeping DOE senior managers apprised of the performance of projects costing more than $5 million—does not include four major NNSA projects, estimated to cost over $100 million each. Consequently, these projects do not receive the senior management oversight that can be provided through that system.

Program management. NNSA program managers are responsible for completing a set of activities by employing a working knowledge of such diverse areas as contracting, budgeting, and engineering. Recognizing the important role of program managers, NNSA has taken several actions, such as developing a program management policy. However, NNSA has yet to identify all of its program managers or train them to a certified level of competency. Indeed, DOE’s most recent performance and accountability report for fiscal year 2006 showed that NNSA fully met only about 52 percent of its program goals while the rest of DOE achieved about a 79- percent success rate.

Financial management. NNSA has made significant progress in implementing its PPBE process over the last 4 years, as mandated by the NNSA Act. However, several areas of improvement still have not been fully addressed. For example, NNSA has issued policy letters on PPBE, but some of these letters are still in draft form because, in part, NNSA is waiting to obtain DOE’s views on certain matters. In addition, NNSA’s PPBE mechanism for centralized resource allocation relies on collegial decision making among senior NNSA managers, with the Administrator resolving disputes and deciding on the final resource allocation. However, the Administrator does not have an independent group to review program proposals, confirm cost estimates, and analyze alternatives. According to a 2003 DOE Inspector General report, most senior managers believe that such an analytical group would be of value. While NNSA has taken some action in this direction, it is not clear when such a group will be established.

As discussed earlier, while there have been continuing calls for removing NNSA from DOE and establishing it a separate agency, we do not believe that such drastic change is necessary to produce an organization that can provide effective oversight of the nation’s nuclear weapons complex. Rather, we believe NNSA can provide comprehensive oversight of the operation and security of the nation’s nuclear weapons programs by addressing a variety of lingering, often unrelated, but important management issues. These issues include providing sufficient, qualified staff to conduct program and operational oversight, especially in the security area, and developing and implementing improvements needed to support effective project, program, and financial management.

Madam Chairman, this concludes my prepared statement. I would be happy to respond to any questions that you or Members of the Subcommittee may have.

GAO Contacts and Staff Acknowledgements

For further information on this testimony, please contact me at (202) 512- 3841 or aloisee@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. James Noel, Assistant Director; Robert Baney; Preston Heard and Jonathan Ban made key contributions to this testimony.

Related GAO Products

Department of Energy: Views on DOE’s Plan to Establish the National Nuclear Security Administration, GAO/T-RCED-00-113 (Washington, D.C.: March 2, 2000).

Department of Energy: Views on the Progress of the National Nuclear Security Administration in Implementing Title 32, GAO-01-602T (Washington, D.C.: Apr. 4, 2001).

NNSA Management: Progress in the Implementation of Title 32, GAO-02- 93R (Washington, D.C.: Dec.12, 2001).

Department of Energy: NNSA Restructuring and Progress in Implementing Title 32, GAO-02-451T (Washington, D.C.: Feb. 26, 2002).

GAO, Nuclear Security: NNSA Needs to Better Manage Its Safeguards and Security Program, GAO-03-471 (Washington, D.C.: May 30, 2003).

National Nuclear Security Administration: Key Management Structure and Workforce Planning Issues Remain As NNSA Conducts Downsizing, GAO-04-545 (Washington, D.C.: June 25, 2004).

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