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Introduction

FIVE SERIOUS CONCERNS LEADING TO THIS STUDY

The congressionally mandated report A New Foundation for the Nuclear Enterprise (the “Augustine-Mies” report), released in November 2014, concluded that “the existing governance structures and many of the practices of the [nuclear security] enterprise are inefficient and ineffective, thereby putting the entire enterprise at risk over the long term.”¹ That report identified five serious concerns, what it called “systemic problems in both management practices and culture that exist across the nuclear enterprise”²:

1. A lack of sustained national leadership focus and priority;
2. Overlapping Department of Energy (DOE) and National Nuclear Security Administration (NNSA) headquarters staffs and blurred ownership and accountability for the nuclear enterprise missions;
3. Lack of proven management practices, including a dysfunctional relationship between line managers and mission-support staffs;
4. Dysfunctional relationships between the government and its management and operating (M&O) site operators, which has encouraged burdensome transactional oversight rather than management focus on mission execution; and
5. Insufficient collaboration between DOE/NNSA and Department of Defense (DoD) weapons customers, resulting in misunderstanding, distrust, and frustration.

The Augustine-Mies panel recommended urgent action to address issues in each of these areas, and that need for urgency is reinforced by the increased attention to the nation’s nuclear deterrent stimulated by the 2018 Nuclear Posture Review and related discussions. These concerns are neither merely vexations nor opportunities for improvement. Rather, as noted in the first quote above, together they represent a risk that, left unaddressed, could eventually erode the nation’s ability to provide adequate nuclear security. That erosion can come about from

• confused or competing goals and direction, hindering both the short- and long-term planning and stewardship;
• blurred accountability, which rests with DOE/NNSA (because they are empowered to promulgate rules and define processes), although they can delegate authority;

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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, http://cdn.knoxblogs.com/atomiccity/wpcontent/uploads/sites/11/2014/12/Governance.pdf?_ga=1.83182294.1320535883.1415285934, p. ix.

² Ibid., p. x.

• inefficient use of resources, brought about particularly through unnecessary or redundant oversight;
• missed opportunities for scientific advancement owing to risk aversion and a bias toward transactional process and compliance over creativity;
• inconsistent interpretation of rules;
• inadequate information flows; and
• conflicting approval processes with unpredictable outcomes.

The Augustine-Mies report made 19 major recommendations, plus numerous sub-recommendations. Other reports, such as the 2015 study by the Commission to Review the Effectiveness of the National Energy Laboratories, Securing America’s Future: Realizing the Potential of the Department of Energy’s National Laboratories (the “CRENEL” report), provided additional recommendations targeting related concerns. However, the systemic summary of concerns listed above as 1–5 provides a useful, high-level basis for assessing whether and how NNSA is making progress to reduce the risk to the enterprise. It is important to stay mindful of those systemic concerns; resolving them—instead of addressing dozens of targeted recommendations—is the ultimate goal.

CHARGE FOR THIS STUDY

Following the release of the Augustine-Mies report, the National Defense Authorization Act for Fiscal Year 2016 (FY2016 NDAA)³ called for DOE to develop an implementation plan for responding to the recommendations in that and similar reports. The NDAA also called for a 4½-year study, joint between the National Academies of Sciences, Engineering, and Medicine and the National Academy of Public Administration (NAPA), to evaluate the implementation plan, to track the actions proposed in that plan, and to assess progress. This report is the second in a series of reports to be issued over 2017–2020 as part of that study.⁴ The Summary from the study’s first report is included in Appendix A. The overall charge for the National Academies–NAPA study is described in Box 1.1.

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³ Section 3137 of the National Defense Authorization Act for Fiscal Year 2016, Pub. L. 112-92 (Nov. 25, 2016).

⁴ The study’s first report—National Academies of Sciences, Engineering, and Medicine and the National Academy of Public Administration, 2017, Report 1 on Tracking and Assessing Governance and Management Reform in the Nuclear Security Enterprise, Washington, DC: The National Academies Press—was released in March 2017.

THE PANEL’S TRACKING AND ASSESSMENT OF PROGRESS SINCE ITS FIRST REPORT

Over the 10 months since its first report was released, the panel gathered information through several mechanisms, including site visits to Lawrence Livermore National Laboratory, the Y-12 plant (which included Pantex through a virtual connection), and Sandia National Laboratories in Albuquerque, New Mexico. All site visits involved open-ended and frank discussions with contractor and field office personnel from various levels. Panel members and staff met with field office personnel and laboratory/plant employees both separately and together. (The panel did not attempt to visit Los Alamos National Laboratory in 2017 because high-profile safety and security incidents dominated the laboratory’s attention during this period.) The panel also reviewed numerous relevant internal documents, directives, and reports and interviewed senior NNSA personnel and a range of NNSA experts (see Appendix B).

The panel and its staff particularly focused on understanding and assessing two specific NNSA initiatives taken in response to the Augustine-Mies and CRENEL reports: (1) a revised process for laboratory strategic planning, begun in 2016 and expanded in 2017, and (2) a process begun in late 2016 to strengthen site governance and management and the sites’ contractor assurance systems (CASs) through peer review and other techniques. More generally, the panel has continued to build its understanding of NNSA’s multi-faceted approach to reforming governance and management, to the point where strategic, rather than just tactical, lessons are emerging.

The panel’s first report included three recommendations. As part of its investigations leading up to this second report, the panel assessed the NNSA’s response to them. Overall, the recommendations of the first report are not fully implemented, and thus there are echoes of them in this report.

The first of those recommendations called for the NNSA Administrator to “demonstrate urgency in efforts to clarify roles, responsibilities, authorities, and accountability, with particular emphasis on clarifying interactions and relationships between NNSA’s management and operating contractors and their government sponsors.”⁵Chapter 3 of this report recounts ongoing efforts to improve governance and management, which include steps to clarify roles, responsibilities, authorities, and accountability. However, the panel did not conclude that “urgency” has been demonstrated.

The second recommendation from the first report called for the NNSA Administrator to “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 to establish feedback loops so that burdensome practices are recognized.”⁶ This was intended to enable a more objective standard for deciding when some practice is “burdensome” and might be re-engineered. While NNSA does monitor the number of audits and inspections, as discussed in Chapter 3 of this report, the full intent of this recommendation is not yet being appropriately addressed.

The final recommendation of the panel’s first report called for the NNSA Administrator to “define an effective mission-focused operating model as the vision for implementing the changes called for in [the Augustine-Mies and CRENEL reports] and elsewhere. NNSA should continue to embrace the concept that change is an iterative process, requiring the sustained attention of leadership and the institution of a mature change management process. NNSA and the management and operating contractors should identify meaningful metrics that can be used to facilitate the identification, measurement, and tracking of change. Results from early change successes should become the foundation for subsequent, iterative actions that support the enterprise in achieving its important mission.”⁷ Conversely, failure or lack of success should prompt new approaches to achieve desired change. While NNSA has begun to consider measurement and tracking of change, the panel has not seen concrete

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⁵ National Academies of Sciences, Engineering, and Medicine and the National Academy of Public Administration, 2017, Report 1, p. 18.

⁶ Ibid., p. 26.

⁷ Ibid., p. 34.

progress or significant attention to change management. And while a focus on mission has been repeatedly emphasized by Administrator Klotz, more work is required to achieve mission focus throughout the enterprise as inseparable from the operations. These topics are discussed more fully in Chapter 3.

STRUCTURE OF THIS REPORT

Chapter 2 of this report recounts one of the promising actions arising from NNSA’s attention to strengthening governance and management of the nuclear security enterprise—a new process for laboratory strategic planning. While metrics of improvement are generally absent, and the efforts are still too new to have fully resolved the five serious concerns listed previously in this chapter, this is an example of an activity that appears to be a step in the right direction.

However, it is very clear to the panel that the piecemeal and operational nature of the “strategic” planning initiative is inadequate for building the necessary integrated vision covering the entire nuclear security enterprise. The CRENEL report makes this point strongly with respect to the full portfolio of DOE laboratories, but it also holds specifically for the components of the nuclear security enterprise. The bulk of Chapter 2 argues for the necessity of such an enterprise-wide strategy, explaining what it must encompass and making the case that it can and should be created in a matter of months.

Chapter 3 recounts other signs of progress against persistent governance and management concerns. However, it concludes that the current portfolio of activities to address them is not adequately planned. It argues for a new plan to guide the reform efforts, describing what attributes it must have in order to succeed. To illustrate the persistence of problems, some anecdotal evidence collected during the panel’s site visits is described; concerns and frustrations similar to those voiced to the Augustine-Mies panel and others are still heard. The leaders of NNSA’s governance and management improvement efforts acknowledge that awareness of those actions has not yet spread widely beyond top management. In addition, the panel and NNSA are aware that change at the scale being attempted by NNSA can take years, as embedded attitudes and processes adjust. In order to inform the ongoing efforts and those yet to come, Chapter 3 also describes the need for data and other objective evidence that will both clearly characterize suboptimal situations and track progress as mitigating actions are taken.