Nuclear Security: NNSA Needs to Better Manage Its Safeguards and Security Program
Released: 2003-06-24T00:00:00

Letter

Background

Since its creation in 1977, DOE has been responsible for developing, producing, and maintaining nuclear weapons; preventing the proliferation of weapons of mass destruction; designing, building, and maintaining naval nuclear propulsion systems; and ensuring the security of the nuclear weapons complex. In 2000, however, the Congress created a separately organized agency within DOE—the NNSA.

NNSA’s Office of Defense Nuclear Security is primarily responsible for developing the agency’s security programs, including protecting, controlling, and accounting for material and ensuring physical security for all facilities in the complex. Historically, NNSA has conducted comprehensive annual surveys of contractors’ operations for safeguards and security. These surveys, which can draw upon subject matter experts throughout the complex, generally take about 2 weeks to conduct and cover 5 “topical” areas and 32 subtopical areas. The topical areas include program management, protection program operations, information security, nuclear materials control and accountability, and personnel security. The survey team assigns ratings of satisfactory, marginal, or unsatisfactory. Currently, NNSA’s facilities have been rated satisfactory in most topical areas. All deficiencies (findings) identified during a survey require the contractors to take corrective action, and both findings and corrective actions are to be entered in the Safeguards and Security Information Management System—a DOE-wide, integrated tracking database for findings of surveys and other safeguards and security activities.

In addition, NNSA’s Office of Facilities and Operations is expected to provide policy guidance for safeguards and security. This office is also expected to be responsible for the Nuclear Safeguards and Security Program, which oversees the implementation of safeguards and security in NNSA facilities. The office is expected to integrate and defend the budget for safeguards and security to ensure that program components can achieve mission objectives. Through various contract mechanisms, NNSA provides financial incentives, such as award fees, for contractor performance. NNSA assesses this performance based on the extent contractors meet a set of measures, which are generally established in annual performance plans—so-called performance measures.

DOE’s Office of Independent Oversight and Performance Assurance supports NNSA in safeguards and security assessments and conducts independent oversight activities in line with DOE and NNSA policies and priorities. Among other things, the office is responsible for evaluating the effectiveness of contractors’ performance in safeguards and security. To carry out this function, this office periodically assesses both federal and contractor operations at a site and identifies findings, issues, and opportunities for improvement. It also performs follow-up reviews to ensure corrective actions are effective and that weaknesses in safeguards and security are appropriately addressed.

NNSA’s Lack of Safeguards and Security Direction in Key Areas Results in Inconsistent Management of Contractors

NNSA has not been fully effective in managing its safeguards and security program in four key areas, and therefore, it cannot be assured that its contractors are working to maximum advantage to protect its sites. First, NNSA has not fully defined safeguards and security roles and responsibilities. Second, without an effective management structure, site offices are uncertain about how to conduct their safeguards and security responsibilities. This uncertainty has resulted in inconsistencies in how site offices comply with DOE orders in assessing contractors. Third, even when assessments are done, NNSA contractors do not consistently conduct required DOE analyses in preparing corrective action plans. Finally, NNSA’s shortfalls at its site offices in the total number of staff and expertise could make it more difficult for the site offices to oversee safeguards and security effectively.

NNSA Has Not Clearly Defined Roles and Responsibilities, Resulting in Confusion at Sites

Since its creation in March 2000, NNSA’s management structure has been in a state of flux, and NNSA expects it will take at least to September 2004 to implement a new management structure. However, NNSA needs a stable structure to establish clear roles and responsibilities for its headquarters and site offices, including safeguards and security oversight. In May 2001, NNSA’s Administrator proposed a management structure for his organization, but in December 2001, we reported that a clearly delineated overall management structure still did not exist. In February 2002, NNSA reported in more detail to Congress on its outline for a new management structure to improve NNSA’s effectiveness and efficiency. NNSA expected to implement the new structure later in the year.

Since then, NNSA headquarters and field officials have been defining safeguards and security roles and responsibilities. In December 2002, NNSA fundamentally changed the management structure for safeguards and security. It abolished operations offices, which had been responsible for conducting the annual, comprehensive surveys as well as other safeguards and security activities. It divided these operations offices’ responsibilities among the site offices and a service center, formerly the Albuquerque operations office; headquarters will oversee the performance of the site offices. The restructuring brings day-to-day federal oversight of laboratories and plants closer to the site offices. However, these changes do not complete the management structure. NNSA plans to further streamline its oversight of contractors by reducing site activities. Among other things, NNSA plans to focus more on ensuring that contractors’ management systems are valid. Furthermore, NNSA plans to review its policies and practices and decide which site office oversight activities can be reduced or eliminated in order for the site offices to work more efficiently. It has not yet identified which specific activities will be modified. At the time of our review, headquarters could not provide details on how it intends to monitor the NNSA site offices’ performance with respect to safeguards and security or address deficiencies.

In creating this new management structure, NNSA has not yet developed a Functions, Responsibilities, and Authorities Manual (FRAM), an organizational tool used by managers at federal agencies, including DOE, for defining roles and responsibilities. This manual is to address the functions, responsibilities, and authorities of all elements within NNSA. NNSA headquarters security officials agree that this guidance is crucial and stated that they are currently developing the components of a FRAM, which should be finalized in 2003. NNSA told us that completing the FRAM takes significant time because of the highly detailed planning necessary for determining staff functions at the various sites.

According to NNSA site office officials, as they wait for formal guidance from headquarters on conducting security oversight, each office is carrying out oversight activities as it deems appropriate. In addition, these officials told us that they have not received formal notification about the change in their safeguards and security oversight responsibilities, such as responsibilities for the survey program. Officials at several site offices expressed frustration with this lack of direction.

NNSA’s Security Assessment Processes Differ among Sites and Are Inconsistent with DOE Requirements

NNSA site offices are not consistent in how they assess contractor safeguards and security activities, and they may not be conducting these assessments in accordance with DOE policy. The lack of consistency and the failure to implement DOE policy occurs in part because the site offices have had to assume new oversight responsibilities without, among other things, clear guidance from headquarters on how to carry out these responsibilities. As a result, three offices of the seven NNSA site offices we visited continue to use the traditional survey approach to oversee security activities (Oak Ridge, Savannah River, and NNSA’s Office of Transportation Safeguards), while the remaining four have adopted or are adopting a surveillance model—-Amarillo, Kirtland, Livermore, and Los Alamos. The distinction between these two activities is important: A survey provides a comprehensive annual review, by a team of experts, of contractor safeguards and security and generally takes about 2 weeks; formerly, the operations offices generally conducted surveys, assisted by experts from throughout the complex, as necessary. In contrast, surveillance relies on a single or small number of NNSA site officials overseeing one or more aspects of a contractor’s safeguards and security activities throughout the year, and the documentation from a surveillance or a group of surveillance activities may be used as part of the survey.

By relying on surveillance, NNSA may have less assurance that it fully knows the condition of security at its sites and therefore potentially cannot act to correct deficiencies undisclosed by this limited review. Surveillance allows subject matter experts at the sites to evaluate areas of contractor safeguards and security performance more often than the traditional survey process and therefore potentially identify deficiencies faster. However, according to DOE officials, reliance on surveillance is not consistent with DOE orders calling for a comprehensive survey of a contractor’s safeguards and security performance. This survey provides a unified assessment of all security-related topical areas. Officials from DOE’s Office of Security—which developed the policy for conducting surveys—believe the surveillance model does not comply with DOE order survey requirements because it is not comprehensive. Officials from DOE’s Office of Independent Oversight and Performance Assurance expressed concern about the site offices’ ability to conduct surveillance because of shortfalls in available expertise. Furthermore, the director of NNSA’s Office of Defense Nuclear Security acknowledged that although some NNSA site offices, such as the Los Alamos site office, are using the surveillance model, this site and others lacked the necessary personnel to conduct surveillance.

According to officials from DOE’s Office of Independent Oversight and Performance Assurance and one site office, surveillance is not compatible with the current Safeguards and Security Information Management System, a DOE information database system used to track findings and associated corrective actions, and therefore could pose problems for sites in entering information. On the other hand, NNSA officials at site offices and headquarters argue that using the surveillance model for oversight will produce an annual end of the year survey report and should have the same end result as an annual survey. However, NNSA could have difficulty ensuring consistent and comprehensive assessments because of the difficulties posed by using the surveillance model without appropriate NNSA-wide implementation guidance, site office staffing shortfalls, and database compatibility problems.

NNSA’s Corrective Action Practices Are Inconsistent with DOE Requirements

Contractors have not consistently prepared effective, formal root cause analyses in developing corrective action plans for identified deficiencies, as DOE policy requires. An effective, formal, root cause analysis can enhance the development of corrective actions, as we observed while reviewing some plans. However, less than half of the 43 corrective action plans we reviewed, dated between 1999 and 2002, showed that the contractor had performed the required root cause analysis. Furthermore, in a few cases corrective action plans were based on root cause analyses that were poorly prepared, resulting in confusion and contradictions. For example, NNSA had identified a deficiency at one site of potential entry into a critical facility. The contractor did not fully develop a root cause for this problem but merely rebutted the finding’s validity. Nevertheless, the contractor took a corrective action in response to this deficiency— spending about $150,000. However, because the root cause analysis was not fully developed, we could not determine how, or if, the contractor’s corrective actions would correct the deficiency. Furthermore, the contractor’s staff preparing the analysis did not have formal training in how to conduct root cause analyses. NNSA site officials agreed that the root cause analysis was performed incorrectly and that their oversight review of the analysis had not detected this problem.

Despite the problems some contractors have had in preparing root cause analyses, corrective action processes in 2002 at all 7 sites showed that some sites are making progress. For example, in late 2000, the Office of Transportation Safeguards, which is responsible for securely transporting critical NNSA items and material, had begun to correct significant weaknesses in its process for preparing and tracking corrective actions.

According to an official responsible for corrective actions at the office, the new process has already resulted in documented improvements to the quality and completeness of its corrective action plans. For example, the new process for root cause analyses identified additional reasons for a recurring NNSA finding on problems in how three federal agent facilities in NNSA’s Office of Transportation Safeguards inspected the vehicles used to transport critical materials across the nation. These inspections are crucial in preventing individuals from attaching explosives or other foreign devices to the vehicles in potential attempts at sabotage or theft. The new process enabled NNSA to identify specific actions to ensure consistent interpretation and implementation of vehicle inspection procedures among the three facilities. Because the finding has not been repeated since July 2000, it appears that the additional corrective actions proved effective. Another site, Sandia National Laboratories, has developed a process for root cause analysis that other sites may find useful. Sandia uses a designated root cause analyst to systematically lead teams of subject matter experts at the laboratory through the steps for determining root cause. With this expert in root cause analyses, Sandia helps ensure that these analyses are consistent and effective.

Other analyses and assessments that are critical to planning corrective actions are also not consistently prepared at NNSA sites. In particular, less than 25 percent of the corrective action plans we reviewed showed documentation of other analyses required by the DOE order for corrective action, such as risk assessment or cost-benefit analysis. Without this documentation, we found it difficult to determine what process, if any, the sites had used to determine the risk level of the problem or the cost and relative benefit of implementing corrective actions.

Consistency problems are likely to continue without effective NNSA guidance for corrective actions. For example, at four sites we visited, the sites either did not require a risk assessment and cost-benefit analyses or stated that they were optional, depending on the site’s evaluation of the need for an analysis. However, the remaining three sites we visited required these analyses for all corrective action plans. This inconsistency resulted in part from differing interpretations of the DOE order governing corrective actions. As a result, NNSA cannot be assured that all contractors are considering the costs of corrective actions in conjunction with the risk posed or the potential benefits to be gained. NNSA officials at some sites stated that, without implementation guidance, the intent of the DOE order requiring these analyses can be interpreted differently from site to site, which contributes to the inconsistent practices we observed. Since we provided our draft report to NNSA in April 2003, it has sent a brief guidance letter on corrective action plans to its site offices, clarifying its analysis and documentation requirements. An NNSA headquarters official stated that issuance of additional guidance for implementing DOE security policies is expected in 2003.

And finally, NNSA sites do not consistently measure all performance aspects of contractors’ preparation of corrective action plans and may reward contractors simply for closing the finding on schedule. According to our review of performance measures concerning corrective actions, four of the six contractor-operated sites we visited had measures that were primarily based on whether the contractor met the schedule for completing corrective actions, not on whether and how well the contractor had performed the analyses. The other two sites did not consider any corrective action performance measures in assessing contractor performance—not even the schedule. However, DOE guidance encourages sites to measure qualitative factors, whenever possible, to minimize the need to rely solely on schedule-driven measures. Effective qualitative performance measures would essentially reflect how well the contractor completes root cause analyses, risk assessment, and cost- benefit analyses.

The lack of qualitative performance measures affects the quality of the correction plan. For example, in fiscal year 1999, DOE’s Office of Independent Oversight and Performance Assurance criticized a site that had schedule-driven performance measures for poorly prepared corrective action plans. Out of the 50 plans reviewed for that site, 27 had inadequate root cause determinations, and 15 had corrective actions that were unlikely to fix the deficiency cited. The performance measures in place for this contractor in fiscal year 1999—and then again in fiscal years 2000 and 2001—did not reflect qualitative aspects of these analyses; instead, they were primarily focused on schedule-driven outcomes. Some contract provisions permit the contractor to forfeit some of the award fee based on other generic performance factors, such as “management failure.” However, these generic provisions may not be fully effective in motivating contractors in all aspects of their corrective action performance because these provisions are not explicitly focused on corrective action and are therefore not highly visible.

Difficulties in Allocating Staff Could Hinder Effective Safeguards and Security Oversight

NNSA’s site offices have shortfalls in the total number of staff and in the expertise for effectively overseeing contractors, including covering all topical areas in the annual surveys. At five of the seven sites we visited, NNSA officials told us that they currently have, or will have, two to six vacancies in safeguards and security positions once NNSA fully implements its new management structure; each site believes that it needs from 10 to 14 security-related positions in order to carry out its oversight activities under NNSA’s new organization. In particular, some of the site offices are experiencing difficulty in filling positions because some staff consider the site locations less desirable than others and because NNSA has instituted a hiring freeze. Some of these vacancies are for specialists in particular subject areas, such as industrial security systems—a key specialty needed for conducting physical security inspections. Officials in the Office of Independent Oversight and Performance Assurance concurred that NNSA’s reorganization and the shifting of responsibilities to the site offices has the potential to weaken security oversight.

To offset the lack of some subject matter experts at sites, NNSA field officials indicated that they frequently rely on subject matter experts from headquarters or other site offices to cover site offices that do not have expertise locally. With only a limited number of subject matter experts in the complex, the sites have to coordinate oversight carefully. Coordination is particularly complicated at those sites that have switched to a surveillance model since they may have to rely on particular subject expertise that is only available during certain times.

NNSA’s new management structure further complicates the problems in staff allocation. NNSA expects to reduce headquarters and field staff by 20 percent by the end of fiscal year 2004. In this restructuring, NNSA plans to share staff expertise, creating a “virtual” organization to cover the needs of site offices and other areas within the complex until a final move of personnel can be made. Headquarters officials told us that it may take 1 to 2 years to move the appropriate safeguards and security persons to the areas where they are needed. Until then, they expect the virtual organization to meet the complex’s needs. The virtual organization will include subject matter experts whose knowledge will be needed throughout the nuclear weapons complex and not just at their current sites. Some of these experts will work from the service center or be detailed to site offices as needed. With competing demands for the experts, it is unclear how they will successfully provide assistance to site offices in their surveillance processes. The assistance may be unavailable when needed since components of surveillance are ongoing and may span an entire year.

Conclusions

Without effectively managing its safeguards and security program, NNSA cannot be assured that its contractors are working to maximum advantage to protect its nuclear weapons sites. These sites may have critical materials that could be prime terrorist targets. Several factors contribute to this lack of assurance. NNSA continues to change its management structure, making it difficult to define roles and responsibilities clearly. Without a functional management structure, some site offices and contractors may not be carrying out their security responsibilities, as DOE orders require. In particular, NNSA has not fully assured itself that the four sites that rely on surveillance activities, rather than on the DOE-required surveys, are overseeing contractors’ security activities in the integrated, comprehensive fashion that are called for in the annual surveys. Moreover, when NNSA site offices allow and reward contractors for closing findings without ensuring that the contractors have correctly identified the root cause, assessed risk, and conducted a cost-benefit analysis, NNSA cannot be assured that the security problem identified was adequately addressed. Finally, to provide effective oversight, NNSA needs to develop an approach, beyond its “virtual” organization, that ensures its limited security resources are able to provide oversight, over the long term, where and when it is needed.

Recommendations for Executive Action

In order to strengthen the safeguards and security program of the nuclear weapons complex, we recommend that the NNSA Administrator and Secretary of Energy formalize the roles and responsibilities of site offices and headquarters for conducting oversight; ensure that sites are performing oversight using a survey approach that provides an integrated comprehensive view of security conditions and is consistent with DOE orders; ensure that contractors’ corrective action plans are prepared and documented consistently and are based on qualitative root-cause, risk- assessment, and cost-benefit analyses, and that appropriate incentives are used to help motivate contractors toward effectively addressing findings; and develop and implement a plan to ensure that NNSA allocates safeguards and security staff so that it provides effective safeguards and security oversight over the long term.

Agency Comments and Our Evaluation

We provided the DOE’s NNSA with a draft of this report for review and comment. Overall, NNSA concurred with two of our four recommendations, disagreed with one, and did not indicate agreement or disagreement with the fourth. In the area of concurrence, NNSA concurred with our recommendation to formally establish roles and responsibilities, and it plans to do so in 2003. NNSA also concurred that corrective action plans must be prepared in accordance with established standards and policy and based on documented root cause analysis, risk assessments, and cost-benefit analysis. Since we provided our draft report to NNSA, it has sent its site offices a guidance letter on corrective action plans that clarifies its analysis and documentation requirements. NNSA now allows required elements to be omitted from corrective action plans, but only if the contractors document the rationale for the exclusion as a formal part of their plan. We believe this guidance letter is a positive step in clarifying some implementation aspects of the DOE requirements, and we encourage continued management attention to this area. NNSA did not comment on the portion of this recommendation concerning the use of appropriate incentives to motivate contractors to address findings effectively.

NNSA disagreed with the conclusion that led to our recommendation to conduct oversight using a survey approach, which provides an integrated, comprehensive view of security conditions and is consistent with DOE orders. Specifically, NNSA disagreed with our conclusion that it was not ensuring the comprehensive annual assessments of contractors’ performance that DOE policy requires. As we reported, four of the seven site offices no longer conduct comprehensive, integrated surveys to assess security but instead rely on surveillance activities. NNSA believed that these surveillance activities were also comprehensive; however, NNSA provided no evidence—such as implementation guidance to the sites that are conducting surveillances—that would ensure that the sites’ surveillance activities conform to DOE’s policies. Without such guidance, NNSA cannot be fully assured that surveillance activities, as presently conducted, provide the comprehensive assessment DOE requires in its surveys. Our recommendation therefore is intended to focus NNSA management attention on ensuring that site offices conduct security assessments that are integrated, comprehensive, and on par with the survey approach previously used and currently described in DOE orders. Furthermore, NNSA asserted, incorrectly, that we found its security posture to be at risk. Assessing NNSA’s security posture was not the objective of this report. Rather, our objective was to assess the way NNSA manages its overall security program. We have clarified the report, where appropriate.

Finally, regarding our recommendation that NNSA develop and implement a plan to ensure that it effectively allocates staff to provide safeguards and security oversight, NNSA commented that managers have staffing plans and that its virtual organization and additional hiring will address sites’ need for certain types of skilled personnel. Reliance on the virtual approach may be effective in the short term. However, the continuing vacancies at some sites indicate that NNSA may have difficulty attracting and retaining necessary expertise at specific, understaffed locations over the long term. NNSA’s comments do not indicate that it fully understands the need to address this longer-term problem. We have modified our recommendation to target this specific long-term concern.

We modified our report, where appropriate, to reflect NNSA’s comments and to clarify some of our conclusions. NNSA’s comments on our draft report are presented in appendix I.

As arranged with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days after the date of this letter. At that time, we will send copies of the report to the Secretary of Energy, the Administrator of NNSA, the Director of the Office of Management and Budget, and appropriate congressional committees. We will make copies available to others on request. In addition, the report will also be available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please call me at (202) 512-3841. Major contributors to this report are listed in appendix II.

Appendix I: Comments from the National Nuclear Security Administration

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

Acknowledgments

In addition to the individual named above, Christopher R. Abraham, Jill Berman, Jonathan M. Gill, Andrea R. Miller, Christopher M. Pacheco, and Carol Herrnstadt Shulman made key contributions to this report.