NNSA Governance Advisory Panel Condones Diminishing Federal Oversight Of Failing Contractors

Santa Fe, NM – Yesterday, the Congressional Advisory Panel on the Governance of the Nuclear Security Enterprise released its long awaited report, entitled “A New Foundation for the Nuclear Enterprise.” According to enabling language in the FY 2013 Defense Authorization Act, “The purpose of the advisory panel is to examine options and make recommendations for revising the governance structure, mission, and management of the nuclear security enterprise.” This means the nuclear weapons complex owned by the Department of Energy’s semi-autonomous National Nuclear Security Administration (NNSA) and run by its contractors. In an attempt to give increased prominence to nuclear weapons programs, the Panel goes so far as to recommend that the Department of Energy be renamed the Department of Energy and Nuclear Security.

The Panel itself is full of conflicts-of-interest. It is co-chaired by Norman Augustine, the former CEO of Lockheed Martin, which is the sole manager of the Sandia Labs and runs the Y-12 and Pantex nuclear weapons production plants in partnership with the Bechtel Corp. The other co-chair, Admiral Robert Mies, sits on the Board of Governors of both for-profit contractors that run the Los Alamos and Lawrence Livermore Labs, as do former congresswoman Ellen Tauscher and Michael Anastasio, former director of both labs. Yet another panel member, Franklin C. Miller, sits on the Sandia Corporation Board of Directors.

But the most questionable panel member is former Congresswoman Heather Wilson (ex.-R-NM). While still in office she signed a contract for “consulting” services with the Sandia National Laboratories that had no written work requirements. The day after she stepped down from office she started being paid $10,000 a month, and went on to secure a similar contract from the Los Alamos Lab for the same amount of money. The DOE Inspector General has recently found that the Sandia contractor (wholly owned by Lockheed Martin) had engaged in highly improper, if not illegal, lobbying of Congress for contract extensions, in which Heather Wilson was “deeply, deeply involved.” Both Sandia and LANL were forced to return to the government the $450,000 they had paid to Wilson, but she has not returned any money.

The Panel’s report laments the dysfunctional relationship between NNSA and its contractors, and deplores the loss of mutual trust. But while profits are rising, contractors are being held to fewer and fewer performance benchmarks, which the Panel does little if anything to fix. Performance benchmarks were previously codified in annual Performance Evaluation Plans (PEPs), but have been subsequently stripped. As a case in point, the FY 2012 Performance Evaluation Plan for the Los Alamos Lab contractor was 89 pages long, full of concrete performance benchmarks. The restructured FY 2013 Plan was nine pages long, with vague performance benchmarks.

This diminishing federal oversight flies in the face of a long history of project delays and immense cost increases for which contractors are responsible, but not held accountable. For example, the former contractor for the Y-12 nuclear weapons plant committed a half-billion dollar design mistake for the Uranium Processing Facility, but has not been publicly disciplined. Y-12’s new contractor just awarded Bechtel a no-bid UPF construction contract, which in effect awards itself since the contractor is principally composed of Lockheed Martin and Bechtel. This is despite the fact that under Bechtel management the Chemistry and Metallurgy Research Replacement Project at Los Alamos exploded in costs from ~$600 million to ~$.6.5 billion, and the Waste Treatment Plant at Hanford from ~$3.5 billion to ~$13.5 billion.

Contractors have also committed very serious operational mistakes. The LANL contractor used unapproved waste handling methods to prepare plutonium-contaminated radioactive wastes for disposal at the Waste Isolation Pilot Plant (WIPP). A waste drum subsequently ruptured, contaminating 21 workers and closing WIPP, causing estimated reopening costs of a half-billion dollars (which will no doubt increase) and $54 million in New Mexico state fines.

As another example, the former Y-12 contractor self-appraised its security management program as “excellent” and its physical security as “good,” which the National Nuclear Security Administration (NNSA) approved while awarding management fees. Both were shaken to their cores when an 82-year old nun and two elderly colleagues cut through three security fences to protest nuclear weapons in a very sensitive area previously thought impregnable.

Despite all this, the Panel makes no specific recommendations to put performance benchmarks back into management contracts. Instead, it proposes that the number of budget line items be reduced, which could further erode transparency, accountability, and congressional oversight, and increase the ability of NNSA and its contractors to move money around.

Perhaps most alarmingly, the Panel recommends that congressional oversight be strengthened by having the DOE Secretary report to the Senate Energy and Natural Resources and Armed Services Committees, and to the House Energy and Commerce and Armed Services Committees. This would likely have the opposite effect, as it seems to preclude the traditional jurisdiction of the House and Senate Energy and Water Development Appropriations Subcommittees, which have provided key oversight in the past, and have often cut certain nuclear weapons programs. Indeed, later in the report, the Panel suggests (short of a formal recommendation) that funding authority for NNSA nuclear weapons programs be invested in the Defense Subcommittees of the House and Senate Appropriations Committees. Again, this appears to exclude Energy and Water Appropriations, which could have profound implications by weakening congressional fiscal constraints on the nuclear weapons complex.

Jay Coghlan, Nuclear Watch Director, commented, “The Panel’s self-interested premise that the Nuclear Security Enterprise needs a new foundation is wrong. First, call it what it is, not some kind of innocuous sounding “enterprise,” but rather a massive research and production complex that is pushing an unaffordable trillion dollar modernization program for nuclear warheads, missiles, subs and bombers. This will divert taxpayers’ dollars from meeting the real national security threats of nuclear weapons proliferation and climate change. The Panel failed by not arguing for prudent maintenance of the stockpile, instead supporting a perpetual work program of risky life extension programs for existing nuclear weapons that will enrich contractors.”

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“A New Foundation for the Nuclear Enterprise” by the Congressional Advisory Panel on the Governance of the Nuclear Security Enterprise is available at
http://cdn.knoxblogs.com/atomiccity/wp-content/uploads/sites/11/2014/12/Governance.pdf?_ga=1.136311025.1198700939.1418359009

The DOE Inspector General “Special Inquiry: Alleged Attempts by Sandia National Laboratories to Influence Congress and Federal Officials on a Contract Extension” is available at
http://www.energy.gov/sites/prod/files/2014/11/f19/IG-0927.pdf

The DOE’s Inspector General’s quote of Heather Wilson’s deep involvement in improper lobbying on behalf of the Sandia Labs is from
http://rapidcityjournal.com/news/local/mines-president-named-in-doe-inspector-general-s-probe/article_b984ab84-d593-5578-8007-e70e7c9e986f.html