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. 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. 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.