The reports by the Congressional Advisory Panel on the Governance of the Nuclear Security Enterprise (Augustine-Mies)1 and the Commission to Review the Effectiveness of the National Energy Laboratories (CRENEL),2 along with many others, raised concerns about the existence, at the time of those studies, of burdensome practices that limit the efficiency of work in the nuclear security enterprise. According to those studies, elements in the field are subject to oversight by a multiplicity of parties and policies—including Department of Energy (DOE) and National Nuclear Security Administration (NNSA) headquarters, the DOE Inspector General, DOE’s Office of Enterprise Assessment, NNSA field offices, program offices at NNSA and in other federal agencies, the Occupational Safety and Health Administration, Government Accountability Office (GAO), Department of Defense, state and local regulators, the Defense Nuclear Facilities Safety Board, and so on—and that oversight is not rationalized or coordinated. One manifestation of this is excessive and uncoordinated oversight—through management processes and through inspections, audits, reviews, site visits, and data calls—which fuels inefficiencies and generates little value added. Balancing the burden and value of necessary oversight has not been approached systematically, and it could be.
In the view of the Augustine-Mies report,3 “excessive and uncoordinated inspections, audits, and formal data calls fuel inefficiencies and generate little value added; in fact, they may detract from the desired safety, security, or environmental outcome” (p. 71). That report suggests “a zero-based review of all audits, inspections, and studies” and that the head of the nuclear security operations “should be empowered to approve or disapprove any internal . . . audits to eliminate non-value-added activities [and] should establish procedures to coordinate and synchronize all internal and external (e.g., GAO) audits, inspections, and formal data calls imposed on headquarters and field activities to the extent possible to minimize disruptions to operations. The focus of internal reviews should shift toward mission success as opposed to compliance” (p. 80).
1 Congressional Advisory Panel on the Governance of the Nuclear Security Enterprise, 2014, A New Foundation for the Nuclear Enterprise: Report of the Congressional Advisory Panel on the Governance of the Nuclear Security Enterprise, p. 71, http://cdn.knoxblogs.com/atomiccity/wpcontent/uploads/sites/11/2014/12/Governance.pdf?_ga=1.83182294.1320535883.1415285934.
2 Commission to Review the Effectiveness of the National Energy Laboratories (CRENEL), 2015, Securing America’s Future: Realizing the Potential of the Department of Energy’s National Laboratories: Final Report of the Commission to Review the Effectiveness of the National Energy Laboratories, Vol. 1, p. 68, https://energy.gov/labcommission/downloads/final-report-commission-review-effectiveness-national-energy-laboratories.
3 Congressional Advisory Panel, 2014, A New Foundation.
The Augustine-Mies report elaborates as follows:
NNSA’s transactional oversight has proven to be expensive and counterproductive [“extremely conservative, risk-averse, and avoids appropriate cost-benefit considerations” according to footnote 64]. From the perspective of the field looking up at headquarters, the emergence of powerful but unaligned mission-support staffs within NNSA has created confusing, layered oversight. The operating entities of the enterprise face a multitude of oversight agencies, exacerbated in part by the flawed DOE/NNSA governance structure . . . The result is uncoordinated efforts to address the mission’s safety, security, and environmental stewardship without sufficient regard to effectiveness, cost, schedule, risk, or mission impact.
[M]ultiple layers of process cannot by themselves ensure zero risk or high confidence in mission performance. These processes can, in fact, generate late changes in requirements that are costly and excessive. Competent, dedicated human judgment is also required . . . .
The panel found there is no consistent reporting on the kinds and frequency of transactional oversight imposed on the weapons complex. Data provided to the panel from the field show that the scope and criteria for required approvals vary significantly across sites. Approval requirements address such areas as interagency work . . . travel, conference attendance approvals, and subcontract approvals. The thresholds for reporting vary across sites as well.
Evidence of the high costs and ineffectiveness of transactional, compliance-focused oversight is provided by the gains achieved from the successful reform of regulation at the Kansas City Plant.4
The CRENEL report5 adds, “The current degree of micromanagement and oversight impose a ‘stealth overhead’ cost at DOE headquarters, the site offices, and the laboratories by virtue of the extra professional time that those activities require, without yielding corresponding benefits.” (Vol. 1, p. 68).
Volume 2 of the CRENEL report6 recommends increased reliance on contractor assurance systems (CASs), through which a laboratory can “provide assurance to stakeholders through creation of systems and metrics to monitor performance and for the federal stakeholders—DOE—to leverage the information from the contractor in areas of lower risk and better performance. This, in turn, should reduce the number of duplicative external independent reviews, and increase the number of shadowing and joint reviews conducted by the site office” (p. 101). The report goes on to say, “Leveraging these systems requires the federal employees to place increasing trust in laboratory systems while ensuring the rigor of these systems. In turn, the laboratory’s systems and processes must be transparent and accessible to their site federal authorities” (p. 101).
This chapter discusses four different categories of burdensome practices: (1) data calls (authorized and unauthorized); (2) audits, inspections, site visits, and reviews; (3) excessive transactional oversight; and (4) specific burdensome practices identified by the Secretary of Energy Advisory Board’s Task Force on DOE National Laboratories (SEAB Task Force). That SEAB Task Force report flagged seven oversight processes as unnecessarily burdensome: processes to approve contractors’ employee compensation plans, labor negotiations, benefits packages, pension contributions, engagement of outside legal counsel, and conference participation and processes for reviewing large requests for quotations and contract awards.
This taxonomy is broader than what is covered in the “Mitigating Burdensome Practices” section of the DOE implementation plan,7 and that difference will be discussed below. The panel believes this
4 Congressional Advisory Panel, 2014, A New Foundation, pp. 71-74.
5 CRENEL, 2015, Securing America’s Future.
6 CRENEL, 2015, Securing America’s Future, Vol. 2.
7 U.S. Department of Energy (DOE), 2016, Governance and Management of the Nuclear Security Enterprise: Report to Congress.
broader definition is consistent with the problem identified in the Augustine-Mies report,8 which is characterized as an “approach that invites detailed, tactical, and transactional oversight rather than a strategic, performance-based management approach” (p. xv). That report notes an indicator of the needed change would be when “internal management reforms have substantially reduced excessively burdensome budgeting detail and transactional oversight, and have led to substantial staff realignments and a performance-based approach; a federal staff right-sizing plan is in place and being executed” (p. xvii).
The definition of “burdensome” is subjective, in that a process that may seem like a burden to a contractor may be seen as necessary diligence by others. The Augustine-Mies report9 recommends DOE focus on “eliminating wasteful and ineffective transactional oversight” and, more specifically, calls for “a reduction in the number of audits, inspections, and formal data calls” and the “elimination of transactional oversight where there are better mechanisms for certifying contractor performance” (p. xxiii); these phrases suggest some of the factors that create unnecessary burden. Practices that are more intrusive or disruptive than necessary, require an excessive amount of time for the value provided, or are tailored to the needs of a support function (e.g., in issues of data formatting or schedule)—instead of being designed to minimize effort and disruption—can also contribute to burden. The panel recognizes, however, that some practices that are considered burdensome—for example, mandatory training courses—are part of normal workplaces and that workers will always have some obligations not directly related to program execution.
Where recurring practices involve more formality than is necessary, such as those identified by the SEAB Task Force, they may be revised so as to lessen their burden.10 The affected parties can and do come together to evaluate the pros and cons of such processes, and the panel was told that this has occurred for most of those processes cited by SEAB Task Force and the National Laboratory Directors’ Council. But burden also arises from less predictable interactions, such as one-off requests for data, onetime audits or inspections, oversight from a field office that slows a contractor’s freedom to execute an experiment, and so on. As an indication of the scale of this issue, the panel has been told that the laboratories typically host “hundreds” of reviews per year, each of which requires scheduling and staff time to prepare and interact with visitors. Lower-level inquiries from a field office or headquarters, which may come by phone or email, would add to this amount of oversight activity. In these cases, an important approach to reducing burden is not only to minimize the number of such oversight actions, but also to ensure that those carried out are designed with clear attention to how they can best contribute to NNSA’s mission.
The Augustine-Mies report did not distinguish between “burdensome” oversight that is within the purview of NNSA and DOE and that which is not. The latter category includes, at a minimum, audits and inspections initiated by the DOE Inspector General, Congress, and the GAO. Some other oversight is driven by provisions in existing contracts or other regulations, and some arises from the high-risk nature of certain activities within the nuclear security enterprise. Such practices may not be candidates for a revised approach, at least in the near term. Therefore, it is clear that some fraction of the problem identified in past reports is not easily addressed. It remains unclear at this point how large that fraction is.
However, the panel is not suggesting that contractors or NNSA should catalogue the full extent of oversight activities. Not only would that be a burdensome task itself, but the perception of what is a burden will vary. It is likely there will always be some oversight that appears to contractors to be unnecessary. The true measure of whether burdensome practices are being effectively mitigated must be judged subjectively by the people in the field who raised the concern initially. The panel has not heard of any NNSA steps to understand the scope of burdensome practices, which would have to be done methodically and multilaterally.
There is an inherent tension between enabling a contractor to carry out its work efficiently—where the contractor is responsible for planning and decision-making—and ensuring that funds are
8 Congressional Advisory Panel, 2014, A New Foundation.
9 Congressional Advisory Panel, 2014, A New Foundation.
10 Another list of 20 such processes was developed in 2013 by DOE’s National Laboratory Directors’ Council.
appropriately spent and that safety, security, and health are protected. Thus, clear strategic discussions of the competing needs for performance and oversight will be necessary in order to achieve a better balance. Ongoing work to establish an enterprise risk management culture within DOE may help in this regard.
The following recommendations address the theme of mitigating burdensome practices:
Augustine-Mies Recommendation 16.1:
The Secretary and Director should direct a reduction in the number of audits, inspections, and formal data calls, and better synchronize those that remain.11
CRENEL Recommendation 13:
DOE should establish a single point of control—within the Department or each stewarding program office—for all laboratory-directed data requests.12
Augustine-Mies Recommendation 16.2:
The Secretary and Director should eliminate transactional oversight in areas where there are better mechanisms for certifying contractor performance, to include reform of the field office’s staffing levels and performance criteria.13
CRENEL Recommendation 18:
There must be a government-wide reconsideration of the conference travel restrictions to enable conference participation at levels appropriate to both the professional needs of the existing scientific staff and to attract the highest quality staff in the future.14
SEAB Task Force, in its Recommendation 2.2.5, echoes CRENEL Recommendation 18:
The current process for conference participation approval creates lengthy delays and barriers . . . the TF proposes piloting a new arrangement for two years in which laboratories and DOE agree to an annual ceiling for conference attendance and spending, and then allow the laboratory to make its own decisions on attendance on a conference-by-conference basis.15
SEAB Task Force Recommendation 2.2:
This recommendation proposes seven DOE-wide “experiments,” as noted in the previous section, to “move control authority for certain operational procedures to the laboratory management.16
11 Congressional Advisory Panel, 2014, A New Foundation, p. xxiii.
12 CRENEL, 2015, Securing America’s Future, Vol. 1, p. 31.
13 Congressional Advisory Panel, 2014, A New Foundation, p. xxiii.
14 CRENEL, 2015, Securing America’s Future, Vol. 1, p. 39.
15 Secretary of Energy Advisory Board (SEAB) National Laboratory Task Force, 2015, Report of the Secretary of Energy Task Force on DOE National Laboratories, p. 23, https://energy.gov/sites/prod/files/2015/06/f23/SEAB%20Lab%20Task%20Force%20Interim%20Report%20Final_0.pdf.
16 SEAB, 2015, Report of the Secretary of Energy Task Force, p. 21.
According to the DOE implementation plan,17 NNSA and DOE have taken, or are taking, actions to mitigate some burdensome practices.
With regard to the burden from audits, inspections, and data calls, the plan says the following:
NNSA is implementing a revised process to centralize and better coordinate and control internal and external oversight activities and reviews at NNSA sites (i.e., a “clearinghouse”). Congressionally directed reviews, reviews by the Office of Inspector General, Government Accountability Office (GAO), and others specifically exempted by the Principal Deputy Administrator will be excluded from this effort. A senior federal manager will be assigned to ensure planned reviews and visits are not duplicative and are coordinated with other activities to the extent practicable. All NNSA-directed reviews will be coordinated and scheduled through the SIAP [Site Integrated Assessment Plan]18 process except for those that by design must be unannounced. The senior federal manager will coordinate with external organizations to obtain insight into planned visits as appropriate.
NNSA is taking a number of actions to facilitate collection of appropriate data and reduce the impacts of data calls on its plants and laboratories. The Office of Acquisition and Project Management will provide guidance on the contract requirements and authorities necessary for personnel to approve and issue data calls to NNSA plants and laboratories. A single, executive-level point of contact will serve as a liaison between NNSA field offices and other organizations within DOE as necessary to minimize and streamline data calls, particularly those that are not authorized through appropriate contract channels. NNSA is developing a comprehensive list of recurring reports, and the content of such, to establish a baseline as an initial screening and consideration for use in answering any request. Finally, NNSA headquarters offices will internally evaluate, streamline and integrate any necessary data calls and ensure that any data calls follow the appropriate contract terms and conditions, as well as NNSA policies and procedures.
(Action 37: NA-MB/50) The process to improve the coordination of external reviews and visits will be fully implemented in 2016.
(Action 38: NA-1/APM) The process to improve the coordination of data calls will be fully implemented in FY2017.19
The process mentioned in connection with Action 37 is shorthand for what NNSA calls Site Integrated Assessment Plans (SIAPs), and the panel was told that this deadline was met. SIAPs are the vehicles by which the NNSA headquarter offices inform the field office managers (FOMs) when they intend to schedule reviews and assessments of the field offices or their management and operating (M&O) contractors.20 The SIAP process has actually been used for many years, but in the past the data were incomplete, and thus they did not provide a truly integrated view of upcoming visits and reviews. Now that they are more thorough, SIAPs provide field offices and their contractors with information to help coordinate, combine, or stagger reviews, as appropriate. A systematic, metrics-driven use of the SIAPs is needed to ensure this happens. However, this process also provides a window into the limitations of what NNSA can control, in that the SIAP schedules do not list audits or inquiries from DOE Inspector General or GAO, visits by Congress or VIPs, unannounced security reviews, or one-off visits.
17 DOE, 2016, Governance and Management.
18 On p. 11, the plan provides the following additional detail: “NNSA uses a Site Integrated Assessment Plan (SIAP) to identify those Safety Management Programs (SMP) and security reviews that will be performed each fiscal year … a consolidated schedule across all field offices and with resources assigned based on expertise and functional area.”
19 DOE, 2016, Governance and Management, pp. 27-28.
20 Information in this paragraph was provided by Patrick Rhoads, Chief of Staff for the NNSA Office of Safety, Infrastructure and Operations, personal communication, February 21, 2017.
To address the burden from excessive transactional oversight, the implementation plan21 proposes the following actions to adjust the operations of the field offices:
In accordance with headquarters program direction, FOMs are responsible for on-site federal oversight and administration of the M&O contract. NNSA FOMs serve as line management, site-level mission integrators and as the risk-accepting and authorizing officials for activities at the site on behalf of the Administrator . . . Field offices rely on frequent communication with their M&O partners and a strong and transparent contractor assurance system (CAS) to form the foundation of their oversight relationship with the M&O (p. 6.)
NNSA is developing an MSD [Management System Description] that will serve as the overarching governance and management framework that is aligned with the DOE Strategic Plan and other applicable Departmental policies . . . The MSD will meet the quality assurance program requirements of DOE O 414.lD, Quality Assurance, and embrace principles consistent with ISO 9001, Quality Management Systems—Requirements. (Action 5: NA-MB) NNSA will issue the MSD in FY2017 (p. 7).
The CAS will continue to serve as a system for the contractor to manage performance consistent with contract requirements. Under this system, the oversight of activities with potentially high consequences is given higher priority and greater emphasis. A DOE working group has been reviewing how the various offices operate CAS at the laboratories under their purview and is developing a policy document that articulates high-level CAS principles to help apply them more uniformly across the enterprise. NNSA is in the process of updating its site governance model to track the DOE Office of Science model more closely and use peer reviews to analyze the strength of the CAS systems (p. 12).22
The panel does not dispute the potential value of these steps in rebalancing the amount of transactional oversight, and the increased reliance on CASs is consistent with the CRENEL report. However, it is not entirely clear whether these field office-based steps are sufficient to address the full range of issues of concern in the Augustine-Mies report. That report implies that mission-support functions beyond just those in the field offices also contribute to the burden: “NNSA’s transactional oversight has proven to be expensive and counterproductive. From the perspective of the field looking up at headquarters, the emergence of powerful but unaligned mission-support staffs within NNSA has created confusing, layered oversight. The operating entities of the enterprise face a multitude of oversight agencies, exacerbated in part by the flawed DOE/NNSA governance structure . . . . The result is uncoordinated efforts to address the mission’s safety, security, and environmental stewardship without sufficient regard to effectiveness, cost, schedule, risk, or mission impact.”23 [emphases added]
Some of the actions described in Chapter 2 are meant to address the existence of “powerful but unaligned mission-support staffs within NNSA” and the lack of coordination mentioned in this quoted passage. The adequacy of field office-based improvements will ultimately be determined by assessing whether contractors continue to feel excessively burdened by transactional oversight.
21 DOE, 2016, Governance and Management.
22 DOE, 2016, Governance and Management.
23 Congressional Advisory Panel, 2014, A New Foundation, p. 71.
24 DOE, 2016, Governance and Management, pp. 26-27.
25 Additional details are available in DOE’s public response to the SEAB Task Force report at https://www.energy.gov/sites/prod/files/2016/06/f32/DOE%20Response%20to%20Interim%20Report%20of%20the%20Task%20Force%20on%20DOE%20National%20Labs.pdf.
The panel explored the topic of burdensome practices, and options for mitigating them, with a large number of senior officials within NNSA, DOE, and M&O contractors. (See Chapter 1 for a description of the study approach and Appendix B for a list of people with whom the panel met.) It quickly became clear that this topic is intertwined with the theme covered in Chapter 2, and so it is helpful to consider these two sets of challenges and actions together.
Several senior NNSA officials interviewed by the panel believe that the number of unauthorized data calls declined noticeably following an August 2016 memo from William (Ike) White, NNSA Chief of Staff and Associate Principal Deputy Administrator, which clarified limits on such calls. Several also believe that the process26 now used to coordinate site reviews, site visits, and data calls has been beneficial. Several individuals, including the directors of the three NNSA laboratories, noted that FOMs and the DOE Office of Enterprise Assessment has worked more collaboratively in the past few years to coordinate reviews, visits, and data calls.
Several FOMs told the panel they are increasing their reliance on CASs in order to reduce transactional oversight. Additional benefit is being sought from a soon-to-be-implemented peer review process for evaluating and employing CASs. However, while one FOM highlighted the increased reliance on CASs in place of field office checking, another manager pointed out that field offices still must comport with state, local, and federal law, and with scores or hundreds of requirements in each M&O contract, so there are a lot of oversight requirements to be examined and possibly rebalanced. A senior leader observed that it can be challenging to weed out DOE regulations that are duplicative of others (e.g., from the Occupational Safety and Health Administration) or which cannot be removed because they are required by the Defense Nuclear Facilities Safety Board or some other stakeholder.
Overall, the laboratory directors have not yet sensed a decline in the number of audits, inspections, and data calls, and they mentioned the flat or increasing number of audits to support that impression. Oversight from outside of DOE and NNSA, such as from the DOE Inspector General and the GAO, seems not to have abated, and several individuals have told the panel that those outside investigations are generally inflexible about scheduling, leveraging existing sources of information, or relaxing their deadlines so as to allow the laboratories to balance competing requirements.
The panel was told that the seven management “experiments” the SEAB Task Force recommended to reduce some of the oversight on M&O contractors are being phased into new contracts. It appears that some of those changes were begun even before the Task Force released its report. Past restrictions on conference travel have been relaxed, thanks to personal intervention of the DOE Secretary, who reportedly expended political capital to effect this change. The panel has not had an opportunity to assess the effects of these changes, and for many of them, it may be too early to discern their impact.
It will likely take some time before unnecessary burdensome practices can be removed or mitigated, and thus this theme will be revisited in future reports from this panel. A major direction for the panel to explore is how staff members at various positions in the enterprise perceive efforts to mitigate burdensome practices and their effectiveness; because the panel observations reported in this section were derived from a small sample of individuals, it is not possible yet to draw firm conclusions. To monitor progress, DOE and NNSA should address the following questions:
- How can “success” in mitigating various types of burdensome practices be defined?
- How can it be known that individual steps taken to reduce burden are effective? How can improvement be measured?
26 DOE, 2016, Governance and Management, p. 27.
- How can NNSA evaluate the effectiveness of the management experiments recommended by the SEAB Task Force?
Based on its discussions and deliberations leading up to this report, the panel offers a finding and a recommendation:
Finding 3.1. The mix of burdensome practices affecting the nuclear security enterprise is not characterized precisely enough to lead to targeted interventions for all of them. It would be helpful to know, for example, what fraction of oversight activities are within NNSA’s control, which burdensome practices are contributing the most to “burden” and why, which are associated with overlapping responsibilities, and so on. Such understanding is necessary before rational rebalancing is possible. The panel is not suggesting that a complete inventory of regular or ad hoc audits, investigations, and requests for data needs to be compiled.
Recommendation 3.1. The NNSA Administrator should develop and promulgate criteria to help the nuclear security enterprise understand when a process is adding burden that is not commensurate with its value and establish feedback loops so that burdensome practices are recognized. The nuclear security enterprise can then more rationally determine which practices to re-engineer through working groups that bring together the affected parties. In the long term, NNSA should strive to move away from a subjective debate over “burdensome practices” and seek to adopt a more systematic approach for defining oversight requirements.