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Summary
The three National Security Laboratories-- Los Alamos National Laboratory, Sandia
National Laboratories, and Lawrence Livermore National Laboratory-- are managed by
private sector entities under contract to the National Nuclear Security Administration
(NNSA). The FY2010 Defense Authorization Act mandated that NNSA task the National
Research Council (NRC) to study the quality and management of Science and Engineering
(S&E) at these Laboratories. Specifically, NRC was tasked to address for each Laboratory:
(1) The quality of the scientific research being conducted at the Laboratory, including
research with respect to weapons science, nonproliferation, energy, and basic science.
(2) The quality of the engineering being conducted at the Laboratory.
(3) The criteria used to assess the quality of scientific research and engineering being
conducted at the Laboratory.
(4) The relationship between the quality of the science and engineering at the
Laboratory and the contract for managing and operating the Laboratory.
(5) The management of work conducted by the Laboratory for entities other than the
Department of Energy, including academic institutions and other Federal agencies,
and interactions between the Laboratory and such entities.
This study is being conducted in two phases. This report covers the first phase, which
addresses tasks (4) and (5) and partially addresses task (3): roughly speaking, how
management at all levels affects the quality of the science and engineering (S&E) at the three
Laboratories. The study’s second phase will evaluate the actual quality of S&E in key subject
areas.
“Quality of S&E” measures the expertise and accomplishments in those areas of
science and engineering that are necessary to accomplish the Laboratories’ missions.
“Quality of the management of S&E” measures management’s capability to build, maintain
and nurture S&E expertise for current and future mission needs. The S&E performed by any
Laboratory can only be as good as the people employed. Thus, ensuring that high-quality
people are attracted to the NNSA National Security Laboratories, and that they are retained,
is a necessary condition for the Laboratories to carry out high-quality S&E. Assuming that
foundation is available, high-quality S&E then requires good facilities and adequate
resources, and operating processes that do not impede the ability of those scientists and
engineers to perform at their highest levels. Management controls these conditions, and this
report evaluates the quality of the Laboratories’ management, at all levels, by its success in
providing these prerequisites for high-quality S&E. Management includes government
(primarily NNSA and its three site offices), the management and operations (M&O)
contractors, and on-site Laboratory management.
Because of this high-level view of management’s role with respect to the quality of
S&E, the study committee saw no distinction between management of the Laboratories’
work for NNSA (roughly, Task 4) and their work for other entities (Task 5). Therefore, the
discussion and recommendations in this report generally apply to the Laboratories’ S&E
work across the board.
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Each of these Laboratories is a Federally Funded Research and Development Center
(FFRDC) operated for NNSA under a Government-Owned/Contractor-Operated (GOCO)
relationship. This contracting mechanism allows the government access to the capabilities
and knowledge of industry and universities to manage these technically complex institutions.
Contracting relationships for some FFRDCs—in particular LLNL and LANL—have endured
for many decades. In 2004, Congress mandated that the long-standing contracts with the
University of California to manage Lawrence Livermore and Los Alamos national
Laboratories (LLNL and LANL) be re-competed.2 As a result, these two M&O contracts
were awarded to two independent LLCs that both include Bechtel Corporation and the
University of California.3 Subsequently, a number of current and former employees of these
Laboratories have expressed concerns about deterioration of morale at the Laboratories along
with ongoing or potential declines in the quality of science and engineering. Many of those
employees attributed those inferred trends to the new M&O contracts and contractors.
To carry out this study, the study committee met with Congressional staffers, senior
leadership of NNSA and the Department of Energy, staff from the NNSA site offices that
serve as a vital link between NNSA and day-to-day Laboratory management, and a wide
variety of former and current employees of the three Laboratories. It held site visits at each
of the Laboratories, organized around panel discussions with a large number of employees at
different levels, from bench scientists to senior management. The study committee
controlled the agendas for all of its meetings and had final say on the list of speakers. At
LANL and LLNL, the study committee also held well-advertised public sessions at which
anyone was invited to speak and management was voluntarily absent. The study committee
also examined past reports on the Laboratories and the language of the current contracts.
Details of the study processes are included in Chapter 1 of this report.
While the new contracts at LANL and LLNL clearly produced a noticeable level of
staff frustration, staff members with whom the study committee interacted continued to show
a strong commitment to their work. Those who testified to the study committee about morale
problems spoke primarily of the situation as it existed at the time of the contract transitions,
or of the subsequent layoffs at LLNL. When the study committee examined the M&O
contracts, it found very little that prescribes the management of S&E. Many of the
bureaucratic frustrations raised at all levels appear to be either within the power of the
Laboratories to address or driven by governance strategies above the Laboratory level: they
are not traceable to the M&O contractor or the contracts themselves. It is indeed true that all
three Labs have been under cost and funding pressure. In the case of LANL and LLNL that
pressure is connected with the contract change; the costs of their re-competed contracts are
significantly greater than the previous contracting arrangements. But this is due to the
combined effect of increased contractor fees, pension obligations, and, in the case of LANL,
a need to now pay New Mexico state taxes. Accounts that attribute the increased cost simply
to award fees are not accurate. Some employees and stakeholders have been concerned that
2
U. S. Congress, H. Rpt. 108-292, Division C-Energy and Water Appropriations Act, 2005, Sec. 301, p.151,
Nov. 2004. The new M&O contractor for LANL took over in 2006, and the new contractor for LLNL began
work in 2007.
3
The parent organizations of Los Alamos National Security (LANS) are The University of California, Bechtel,
Babcock and Wilcox, and URS. For Lawrence Livermore National Security (LLNS) the parent organizations
consist of the same four plus Battelle.
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M&O contractors pursuing a fee might not act in the public interest, and this is an important
issue. Therefore, the study committee discussed incentives with the three Laboratory
directors and was convinced that their primary objective remains to manage the Laboratories
in the public interest.
An evolution of the Laboratory missions to “National Security Laboratories” is well
underway. The absence of nuclear testing means that experimental validation of much of the
S&E performed by the Laboratories is not possible, and thereby lessening the intellectual
attractiveness of the work for at least some prospective employees. The expansion of the
Laboratories’ mission into new non-nuclear areas offers the prospect of increasing the
Laboratories’ appeal to top-quality scientists and engineers while also serving important
national security missions. Thus, the quality of S&E, being preconditioned on attracting
high-quality people, depends in the long run on successfully making this transition to
National Security Laboratories. It is for this reason that the study committee was pleased to
see that, a governance charter has been established among the Departments of Energy,
Homeland Security, and Defense, plus the Office of the Director of National Intelligence 4
Many of the challenges facing these agencies are synergistic with the capabilities of these
NNSA Laboratories, and they can, and do, benefit from the large investments that NNSA and
its predecessors have made in S&E capabilities. In a time of constrained budgets, broadening
the mandate to a national security mission helps preserve S&E expertise by providing
opportunities to work on problems posed by partner agencies. However, while such Work for
Others (WFO) is very important for the future of S&E at the Laboratories, all three of the
Laboratory directors were very clear that maintenance of the nuclear weapons stockpile
remains the core mission of the Labs.
Recommendation 3-15:
The study committee recommends that Congress recognize that maintenance of
the stockpile remains the core mission of the Labs, and in that context consider
endorsing and supporting in some way the evolution of the NNSA Laboratories to
National Security Laboratories as described in the July 2010 four-agency Governance
Charter for an Interagency Council on the Strategic Capability of DOE National
Laboratories.
A crucial part of the Laboratories’ ability to conduct their missions is derived from
Laboratory Directed Research and Development (LDRD), the primary source for internally
directed R&D funding. Among its other benefits, LDRD provides a major resource for
supporting and training staff at each Laboratory.
4
See Appendix 1 “Governance Charter for an Interagency Council on the Strategic Capability of DOE National
Laboratories as National Security Assets.”
5
The first number refers to the chapter of the report in which the recommendation appears.
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Recommendation 3-2:
The study committee recommends that Congress and NNSA maintain strong
support of the LDRD program as it is an essential component of enabling the long-term
viability of the Laboratories.
Historically, Laboratories had another source of discretionary research spending. The
weapons program (at each Laboratory) had the flexibility to use part of its budget to fund a
robust research program, in support of the core weapons mission. Currently, the weapons
program budget is subdivided into so many categories with so many restrictions that this
important flexibility is effectively lost. This loss in funding flexibility has significantly
reduced the amount of core program research being performed at the Laboratories. This
lessens the appeal of the Laboratories when recruiting scientists and engineers.
Recommendation 3-3:
The study committee recommends that Congress reduce the number of
restrictive budget reporting categories in the Nuclear Weapons Program and permit
the use of such funds to support a robust core weapons research program and further
develop necessary S&E capability.
In the view of this committee, the relationship between NNSA and its National
Security Laboratories is broken to an extent that very seriously affects the Labs’ capability to
manage for quality S&E. There has been a breakdown of trust and an erosion of the
partnering between the Laboratories and NNSA to solve complex S&E problems; there is
conflict and confusion over management roles and responsibilities of organizations and
individuals. For example, the study committee heard reports of mid-level issues being
elevated to the Laboratory director level because there was no clarity about how to resolve
disputes between a Laboratory and an NNSA Site Office. Another example was a recent
instance in which NNSA HQ tried to overrule a Laboratory’s best scientific judgment about
how to carry out a scientific task. Subsequently, language appeared in a Congressional report
opposing that NNSA order. A better mechanism could be established for resolving technical
disputes, without elevating them to top NNSA management and congressional levels. A
technical advisory committee, established at the NNSA level, would be a helpful mechanism
for filling this gap in S&E management. More generally, such an advisory committee could
monitor progress on other aspects of roles and responsibilities, as described next.
Erosion of trust on both sides of the relationship shapes the oversight and operation of
the Laboratories, resulting in excessive bureaucracy governing Laboratory activities at a deep
level of detail, including the conduct of S&E. The study committee observed widespread
perception among Laboratory S&E staff and some managers that NNSA oversight activities
were inconsistent with statements by NNSA that oversight is accomplished without being
intrusive; i.e., “eyes on, hands off”. The study committee was repeatedly told that oversight
officials frequently blur the line between oversight and evaluation and insert themselves in an
operational role. This problem was reported to occur in many aspects of Laboratory
activities.
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This erosion of the trust relationship is prominent with respect to LANL, where past
failures in safety, security, and business practices attracted much national attention and
public criticism. But it has also spilled over to LLNL and SNL. The loss of trust in the
ability of the Laboratories to maintain operational goals such as safety, security,
environmental responsibility and fiscal integrity has produced detailed scrutiny by NNSA
HQ and site offices and increased aversion to risk. A major byproduct of this has been to
create a bias against experimental work, because of the onerous processes sometimes
required before running an experiment. The bias is problematic because experimental
science is at the very heart of the scientific method.
The FFRDC relationship is based on a partnership between the Federal government
and a Laboratory in which the government decides what problems need to be addressed and
the contractor determines how best to address those problems. There is a perception among
S&E staff and managers at the three Laboratories that NNSA has moved from partnering
with the Laboratories to solve scientific and engineering problems, to assigning tasks and
specific S&E solutions with detailed implementation instructions. This approach precludes
taking full advantage of the intellectual and management skills that taxpayer dollars have
purchased. The study committee found similar issues in transactional oversight of safety,
business, security and operations. Science and engineering quality is at risk when Laboratory
scientists and engineers are not encouraged to bring forth their creative ideas in partnership
with NNSA to solve problems vital to our national security.
Recommendation 4-1:
The study committee recommends that NNSA and each of the Laboratories commit
to the goal of rebalancing the managerial and governance relationship to build in a
higher level of trust in program execution and Laboratory operations in general.
Recommendation 4-2:
The study committee recommends that NNSA and the Laboratories agree on a set of
principles that clearly lay out the boundaries and roles of each management structure,
and also that program managers at headquarters, the Site Offices, and in the
Laboratories be directed to abide by these principles.
For example, the Site Manager and the Director and/or Deputy Director of each
Laboratory could establish, in consultation with other Lab staff, a process to identify and
agree on eliminating certain oversight procedures that are not necessary or related to the
overall goals of the Laboratory. Similarly, some mechanism could be established to filter
program taskings at both the headquarters level and at the Laboratory senior management
level to assure that each tasking is necessary and consistent with the agreed management
principles.
Recommendation 4-3:
The study committee recommends that the goal of rebalancing the relationship and
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the set of principles laying out the boundaries and roles of each management structure
be memorialized in memoranda of understanding between NNSA and its Laboratories.
NNSA should assess performance against these understandings on an annual basis over
a five-year period and report these assessments to Congress.6
A key to ongoing Laboratory success has been a strong focus on the long term and on
maintaining deep technical capability. Under the new management structure of the
Laboratories, industrial and other private sector partners can help assure that this long-term
focus is maintained.
Recommendation 5-1:
The study committee recommends that the NNSA, Congress, and top
management of the Laboratories recognize that safety and security systems at the
Laboratories have been strengthened to the point where they no longer need special
attention. NNSA and Laboratory management should explore ways by which the
administrative, safety, and security costs can be reduced, so that they not impose an
excessive burden on essential S&E activities.
Recommendation 5-2:
The study committee recommends that NNSA reduce reporting and
administrative burdens on the Lab directors, and purposely free directors to establish
strategic science and engineering direction at the Laboratories.
Among other benefits, this may encourage Lab directors to serve longer terms with
the organization.
6
The committee observes that it is important to design this approach to be self-correcting and to avoid problems
such as: (1) adding to a check-list approach to management; (2) enforcing measures that annual assessment
shows to be unworkable; and (3) requiring Congressional intervention when not needed.
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