National Academies Press: OpenBook

Governance and Management of the Nuclear Security Enterprise (2020)

Chapter: 4 Maximizing the Contributions of NNSA's M&O Partners

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Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
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Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
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Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
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Page 45
Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
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Page 46
Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
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Page 47
Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
×
Page 48
Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
×
Page 49
Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
×
Page 50
Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
×
Page 51
Suggested Citation:"4 Maximizing the Contributions of NNSA's M&O Partners." National Academies of Sciences, Engineering, and Medicine, and National Academy of Public Administration. 2020. Governance and Management of the Nuclear Security Enterprise. Washington, DC: The National Academies Press. doi: 10.17226/25933.
×
Page 52

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4 Maximizing the Contributions of NNSA’s M&O Partners The subject of this chapter is the efficacy of NNSA’s governance and management of its laboratories, plants, and sites, which directly carry out the mission of the nuclear security enterprise. These facilities engage in research, development, testing, production, fabrication, assembly, and disassembly of nuclear warheads; the support functions needed are also part of each facility. These government-owned, contractor-operated facilities, executing under management and operating (M&O) contracts, provide highly technical, specialized capabilities via a combined workforce of over 55,000 employees. The Augustine-Mies report was greatly concerned about the relationship between NNSA and its M&Os, terming it “dysfunctional.”1 The panel has found the relationship to be improved since that 2014 report. There are, however, remaining problems that need to be addressed. WORKING RELATIONSHIPS BETWEEN NNSA AND ITS M&O PARTNERS In response to the recommendations in the Augustine-Mies report, NNSA has taken a number of actions to improve the enterprise’s unity of purpose, and the working relationships between M&Os and the field offices, between M&Os and functional and program offices, and between M&Os themselves. Many of these steps were recounted in Chapters 1 and 3, with three of the most salient being the messages of the current Administrator, issuance of site governance special directives SD 226.1B and 226.1C, and execution of a site governance peer review at each facility. Since strong working relationships are critical for the enterprise and are about more than organizational structure, this subject requires ongoing attention at a granular level. Other actions in recent years include the creation of Site Integrated Assessment Plans by each site’s NNSA field office, to add coherence to the site’s annual oversight activities, and the establishment or reinstatement of several committees and working groups that meet regularly to provide additional channels for communication and coordination between M&O and NNSA leadership. When the Strategic Vision and the Governance & Management Framework documents were issued in 2019, the Administrator issued clear statements that those documents applied to all parts of the enterprise. In its many discussion groups (see Appendix B), the panel inquired about the status of the relationships between the different components and levels within the enterprise and found improvements over the course of its study. The improvement was noted most strongly at the top levels of management, but favorable observations arose from other levels as well. For example, some M&O staff members described their field office personnel as supportive and a helpful resource. Discussants mentioned activities such as joint training and team-building exercises, joint plan development, joint problem solving, and shared participation in activities on site and in Washington, D.C., as contributing to the improved relations. In the final set of site visits conducted in 2020, both leadership and most staff in the 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/wp- content/uploads/sites/11/2014/12/Governance.pdf. PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 43

field offices, and leadership and some staff from the M&Os, reported a feeling of greater unity, a “shared fate,” and expressed that one part of the enterprise cannot be successful unless all parts are. There does, however, remain some ambiguity about the roles and responsibilities among the three key elements of each site’s governance system (field office, M&O, and headquarters), and this problem becomes more acute as one drills down into the organization. For example, some bench scientists at the laboratories expressed frustration with regard to who exactly needs to be consulted to obtain approval for some specific actions. Relationships between M&O personnel and headquarters were also described as improved in some areas. Most HQ leaders seem to be on the path toward embracing the M&Os as “partners,” mentioning increasing levels of trust. The panel has also heard continuing concern about the timeliness of decision making, with staff at the M&O facilities expressing a persistent impression that decisions handed off to headquarters will involve considerable delay. Overall, however, the panel concludes that there have been noted improvements in the relations between federal employees and M&O partners, particularly at the leadership level. Today’s relationship is clearly not the “dysfunctional” one described in the Augustine-Mies report. This improvement is a crucial step because of the key role M&Os play in the nuclear security enterprise, and more must be done. PRINCIPLES UNDERPINNING THE USE OF M&O ENTITIES The use of M&O entities enables NNSA to tap specialized workers who might not otherwise be recruited as federal employees. In order for that value to be realized, federal leadership must be used judiciously, steering the work to the nation’s advantage and ensuring good value, but not undercutting the ability of the partners to carry out the specialized endeavors in which they are the true experts. That respectful and strategic relationship is even more important for NNSA’s three laboratories, whose status as Federally Funded Research and Development Centers (FFRDCs) gives them even more independence and expectation of objectivity.2 This is discussed in greater detail later in this chapter. NNSA chooses M&O partners in part because of the expertise that the partners’ parent organizations are presumed to bring. Those advantages include not only attributes such as the caliber of staff and of researchers who can be attracted by academic parents but also the capabilities a corporate parent brings in functions such as managing human capital, finances, or projects. But the intended or unintended effect of imposing an outside culture or practice on an NNSA facility is complicated. Each lab and facility has its own role to play in the overall enterprise, and the culture of an M&O parent may or may not be appropriate to best fulfilling that role. The more similar the parent’s operation is to the NNSA facility it is managing, the more likely that its culture will be appropriate. An example of this risk, revealed during site visits, is one parent M&O that manages both a lab and a production facility. The parent company’s own business is production, and the panel was very positively impressed with how well the corporate culture and practice worked at the production facility they were managing. However, the M&O parent did not have any substantial research laboratories of its own, and it was considerably less effective and appropriate in grafting its culture and practice onto a laboratory. 2 Federal Acquisition Regulations, section 35.017, stipulates that “An FFRDC meets some special long-term research or development need which cannot be met as effectively by existing in-house or contractor resources. FFRDCs enable agencies to use private sector resources to accomplish tasks that are integral to the mission and operation of the sponsoring agency. An FFRDC, in order to discharge its responsibilities to the sponsoring agency, has access, beyond that which is common to the normal contractual relationship, to Government and supplier data, including sensitive and proprietary data, and to employees and installations, equipment and real property.” PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 44

REDEFINING OVERSIGHT Costly and ineffective transactional oversight was cited by the Augustine-Mies report and numerous other reports as a significant problem for the labs, plants, and sites. An emphasis on oversight beyond what is balanced by its benefits is both a symptom of, and a contributor to, two of the major problems identified by Augustine-Mies—the lack of trust throughout the enterprise, and a pattern of risk avoidance rather than risk management. Excessive data calls, audits, inspections, and the imposition of operational formality can erode the benefits of outsourcing to M&Os. The nuclear security enterprise is still recovering from a prioritization of compliance that began in the early 1990s. At that time, the enterprise—along with all of the Department of Energy (DOE) laboratories—was subjected to intense scrutiny into its compliance with laws and policies governing environment, health, safety, security, and contracting. This lengthy and highly publicized investigation came at the same time that the purpose of the nuclear security enterprise was being questioned because of the end of the Cold War. The effect on the enterprise was a widespread culture shift from prioritization of the national security mission to emphasizing regulatory compliance; there was a consequent decline in morale. A corresponding shift toward risk avoidance was also felt, with it being favored over true management of risk. One step taken in recent years by NNSA to reset the level of oversight has been to identify and limit unauthorized data requests to M&O partners. These efforts continue. The panel’s discussions with M&O staff reveals, however, that few have felt a reduction in burden from this action. Perhaps more successful are the Site Integrated Assessment Plans mentioned earlier in this chapter. Even more benefit may accrue from the work of NNSA’s Operations and Efficiencies Board, which is proactively seeking to improve operations. Some information about that board’s work, and about NNSA’s initiatives to address burdensome oversight, is found in the NNSA/DOE report to Congress, Burdensome Regulatory Requirements.3 That report to Congress identifies 91 burdensome regulations, catalogued with input from NNSA’s M&Os, in the areas of security (33), safety (14), personnel management/HR (10), project management (7), environment/waste (6), emergency management(6), cyber/IT (6), real property (2), and other (7). Of these, 72 percent are driven by DOE-NNSA requirements and 28 percent by other federal or statutory requirements along with M&O contract reporting requirements. NNSA’s Operations and Efficiencies Board evaluated these 91 practices and committed to reviewing 16 of the regulations in 2019.4 Thus collaborative work has begun, albeit at a relatively slow pace, to address some areas of unwelcome burden on M&O partners. Burdensome requirements, rules, and practices affect technical personnel as well as administrative staff. The panel heard from staff at the three laboratories that the amount of time they have available to focus intently on their technical work is infringed on by the burden of so many requirements. Quite often, the staff members are not able to identify the source of such “administrivia,” which includes processes such as those used to authorize travel, visitors, and laboratory experiments, or to purchase supplies and equipment. In some cases, perhaps many, such requirements are imposed by the M&O’s own management—for example, see the discussion in Chapter 3 about budget and reporting (B&R) codes— although those decisions may well be in response to real or perceived pressure or influence from NNSA. Thus, NNSA and the M&O partners need to work together to examine local operations and determine whether they are unnecessarily contributing to administrative burdens faced by M&O employees. Other requirements that have been characterized as burdensome practices stem from DOE or NNSA Directives and Orders. The Commission to Review the Effectiveness of the National Energy Laboratories (CRENEL) report recommended that plants and labs be allowed to utilize federal, state, and national 3 Department of Energy, National Nuclear Security Administration, 2019, Burdensome Regulatory Requirements, Report NA-0088. 4 Department of Energy, National Nuclear Security Administration, 2019, Burdensome Regulatory Requirements, Report NA-0088, p. 7. PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 45

standards instead of those DOE requirements in order to demonstrate compliance with various health, safety, and environmental standards for activities that are not high-hazard or nuclear. This has been the practice at the Kansas City plant for over a decade—apparently with success. However, NNSA has not adopted this “Kansas City model” elsewhere. The Administrator’s initiative to encourage collaborative execution of mission—for example, “Getting to Yes”—is opening the door for M&O and NNSA personnel to look for ways to safely and efficiently achieve mission objectives. This includes raising questions about procedures, policies, and so on, that are burdensome, unnecessary, or do not support the mission. However, the panel was told by a number of M&O personnel that they still feel that repercussions from any problem will fall on their shoulders, and thus they have an incentive to avoid taking risks. The panel endorses NNSA’s efforts to create an environment in which all parties are openly empowered to reach mutual understanding, if not agreement, about how to progress and how to safely look for better ways to accomplish the work of the mission. These interactions can be complex, possibly involving NNSA program offices, functional offices at NNSA and sometimes at DOE, the cognizant NNSA field office, and staff from the M&O facility involved. The activities of the Operations and Efficiencies Board, coupled with the Administrator’s messaging, set the stage for a transition from risk aversion toward risk management. In addition, the governance peer reviews conducted under the direction of NNSA’s Governance Executive Steering Committee have been widely reported to be a promising mechanism for examining and addressing such challenges as “right-sizing” oversight, the identification and resolution of common problems, and encouraging risk management. However, there is currently no mechanism for disseminating the major takeaways from those peer reviews to benefit the enterprise by enabling others to systematically build on lessons learned. To date, NNSA has not announced whether or how it will build upon this apparently successful process, although indications are that it will be continued. The panel envisions the site governance peer reviews as a useful foundation for continuous improvement and suggests the following ideas for expanding the scope of that process:  Expand to also examine roles and responsibilities between the M&O partners and NNSA headquarters.  Expand to examine practices and timeliness of decision making, especially when headquarters is involved.  Expand to encompass information sharing and government oversight, providing an opportunity to identify means of reducing burden.  Expand to identify opportunities to move away from risk avoidance, particularly in M&O implementation of federal directives, orders, and contract provisions. Recommendation 4.1: The National Nuclear Security Administration (NNSA) and management and operating (M&O) management should expand their existing processes to identify and mitigate burdensome processes and requirements, instituting a process of continuous improvement. Those in a position to develop and promulgate improvements, and those affected by the improvements, should work collaboratively on these efforts. At least five elements are needed:  The burdens identified in the 2019 survey and analysis carried out by NNSA’s Operations and Efficiencies Board should be addressed to the extent that they are within the control of NNSA or the Department of Energy (DOE).  Surveillance and mitigation analogous to the 2019 survey should be conducted annually, with results made available throughout the enterprise.  NNSA should consider expanding the site governance peer reviews to contribute to revealing and removing burdensome practices and sharing improvements. PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 46

 NNSA and laboratory management should improve their monitoring of administrative inefficiencies that hinder the technical staff at the NNSA laboratories, and develop a simple process whereby significant inefficiencies can be identified, analyzed, and prioritized for possible mitigation.  NNSA should proactively work with the labs, plants, and sites to identify where the M&O processes might be more risk averse than appropriate. ENABLING THE FFRDC LABORATORIES TO BE OBJECTIVE, HONEST BROKERS The challenge of right-sizing the oversight of M&Os is particularly acute with NNSA’s three laboratories because of their status as FFRDCs. Chapter 4 of the Augustine-Mies report opens with an apt quote from General George S. Patton: Don’t tell people how to do things; tell them what to do and let them surprise you with their ingenuity. In essence that is why the federal government relies on FFRDCs in selected circumstances. The FFRDC model gives the laboratory workforce the latitude to take charge of a set of tasks prescribed by the government—which defines the “what” and “when”—and to innovate with regard to “how” best to accomplish them. Because FFRDCs are by design objective and unbiased experts, they are also essential contributors in defining the “what.” The FFRDC relationship in federal contracting is a special one, requiring both the government agency and the FFRDC to work together in a way that is much more open, transparent, and trusting than with a normal government contract. In its discussions about that relationship with senior people in NNSA and at the NNSA laboratories, the panel found inconsistent degrees of understanding and reflecting of this relationship in their work. The Augustine-Mies report observed that FFRDCs are special in the following ways:  Comprehensive knowledge of sponsor needs: mission, culture, expertise, and institutional memory regarding issues of enduring concern to the sponsor  Adaptability: ability to respond to emerging needs of their sponsors and anticipate future critical issues  Objectivity: ability to produce thorough, independent analyses to address complex technical and analytical problems  Freedom from conflicts of interest and dedication to the public interest: independence from commercial, shareholder, political, or other associations  Long-term continuity: uninterrupted, consistent support based on a continuing relationship  Broad access to sensitive government and commercial proprietary information: absence of institutional interests that could lead to misuse of information or cause contractor reluctance to provide such information  Quick response capability: ability to offer short-term assistance to help sponsors meet urgent and high-priority requirements.5 As a result of this special relationship, the intention is that NNSA and its laboratories will operate with a much more open, trusting partnership than is the case with other contractors. Accordingly, FFRDCs are often referred to as “trusted partners” for the government. In addition to executing programmatic tasks, NNSA’s FFRDCs also take responsibility for defining and sustaining the long-term science and technology competencies required to ensure nuclear deterrence writ large. They attract, 5 Quoted from p. 68 of the Augustine-Mies report, with its footnote: “Definition taken from ‘Federally Funded Research and Development Centers (FFRDC),’ on the Defense Acquisition University website, https:dap.dau.mil/acquipedia, accessed 29 July 2014.” PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 47

develop, and retain the unique scientific expertise that cannot be found in government. Successful FFRDCs address complex technical challenges that often require high-risk experiments and large facilities, such as supercomputers or light sources, which are beyond the scale or role of purely academic or commercial entities. The Augustine-Mies report found that the FFRDC model for the three NNSA laboratories had been seriously impaired and urged actions to rebuild the strategic NNSA-FFRDC relationship. In its response to that report, DOE stated that it was “reestablishing the Federally Funded Research and Development Center (FFRDC) principles originally established during World War II and applying them in the context of modern governance standards.”6 The panel has seen a few encouraging steps in this direction. As mentioned in Chapter 3, Los Alamos National Laboratory (LANL) is contributing greatly to the establishment of pit production capabilities because its team is given clear latitude to develop the “how” for that program. The program management in NA-10 is relying on LANL’s expertise and capabilities as an honest broker and paving the way for the LANL team to exert intellectual leadership to the benefit of the program. Another positive development is the increasing involvement of the laboratories (along with the plants and sites) in NNSA’s strategic planning process and, more recently, in the annual budget building. And the panel was told late in 2018 that NNSA has reestablished a group called “The Navigators,” consisting of the three laboratory directors and the head of NA-10, who meet regularly regarding strategic directions for the nuclear security enterprise. These steps are healthier than the situation that existed at the time of the Augustine-Mies study and if sustained could lead to lasting improvements in some aspects of the FFRDC relations. While the panel supports this improved relationship between NNSA and its laboratories, it believes that more could be done to extract the full value intended within the FFRDC concept. For example, while the laboratories play a primary role in defining the core science and engineering competencies needed for the future of nuclear deterrence, the final decision is by necessity made by NNSA. In order for the enterprise to be prepared for future threats, the laboratories need the freedom, and the expectation, to think broadly and long term. This involves being able to take risks such as exploring directions that may not succeed, or by executing basic science with no obvious results relevant to nuclear weapons. Although there will always be differences of opinion on such judgment calls, it is healthy to examine whether the laboratories’ specialized insight as trusted brokers is being tapped fully. Comparing today’s reality with the desired attributes of FFRDCs (shown here in italics), the panel sees a mixed picture:  Closer relationship with sponsor than in normal contractual relationship. FFRDCs provide research and development (R&D) support that is integral to the mission and operation of the agency. The current NNSA Administrator has worked to restore this relationship, which had been strong in the past, through her strategic directions to NNSA and her personal commitment, reinforced by regular meetings with laboratory directors and engagement with all M&Os in discussions, strategic planning, and building of budgets.  Ability to maintain scientific and engineering capabilities over a long period. The panel has some concern about whether NNSA’s recent contracting strategy is at odds with this goal. The Sandia National Laboratories (SNL) contract awarded in 2017 is for a 5-year period of performance, with options that can extend (in 1-year increments) to a 10-year maximum. While 5 to 10 years is a long duration for many standard contracts, the NNSA laboratories must plan their capabilities and research for decades in the future. Although most laboratory staff are retained when a contract is recompeted, all top managers were lost during the 2017 transition at SNL, and many midlevel managers as well. Thus, the desired long-term relationship, as well as continuity in the knowledge of the sponsoring agency’s (NNSA) needs, could be set back. 6 Department of Energy, Governance and Management of the Nuclear Security Enterprise—Report to Congress. DOE, Washington, D.C., p. iii. PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 48

 The flexibility to recruit and retain top talent in the field. Talent is always in high demand, and great care must be applied to enable the laboratories to attract and keep the best people. To be able to do this, laboratories should have a fair amount of latitude regarding compensation, benefits, work environment, professional travel, and so on.  No conflicts of interest that hinder the FFRDC’s ability to provide trusted, objective advice. Because M&Os must work together, including via contractual agreements, NNSA must be mindful of navigating any potential conflicts of interest that might arise. In some of its discussions with senior NNSA personnel, the panel found inconsistent understanding within NNSA of what is special about FFRDCs as “trusted partners” and how the special relationship is apparently perceived. The picture painted by these interviews is that either NNSA lacks a single concept of the desired FFRDC relationship, or that the concept has not been consistently implemented. In those discussions, the panel received conflicting impressions—with some interviewees depicting the laboratories as trusted advisors, but others implying that they are not that distinct from other contractors in DOE or the Department of Defense (DoD). NNSA’s concept for what FFRDCs should be, and thus how they are managed and leveraged, appears muddy. With a common model of what an FFRDC should and could be, day-to-day management decisions are more likely to help leverage value from the laboratories. Recommendation 4.2: The National Nuclear Security Administration (NNSA) should establish management practices that derive the maximum value from the established principles for Federally Funded Research and Development Centers (FFRDCs). To achieve this, the Administrator should convene a working group whose members are knowledgeable about successful FFRDC relationships and some of whom are outside the current nuclear security enterprise to assist NNSA in developing a conceptual model for the relationship it seeks to have with its FFRDCs. NNSA should then take the necessary steps to put the model in place for all three FFRDCs so that their ability to act as trusted, independent, expert contributors is maximized. It is logical for the M&O contracts governing NNSA’s laboratories to reflect the special FFRDC relationship, particularly the unique characteristics of FFRDCs as described in the Federal Acquisition Regulations. The sense of the panel is that the strategy behind NNSA’s FFRDC contracts needs to be reassessed; this would be part of the call in Recommendation 4.2 for NNSA to “take the necessary steps to put the model in place for all three FFRDCs.” The Augustine-Mies report recommended contract changes for all the M&Os to incentivize mission accomplishment over compliance with support functions, and to favor longer-term relationships, but few of those recommendations were adopted. The panel believes this needs to be reexamined for the laboratories because the contracts help effect, or impede, the reestablishment of healthy FFRDC relationships. NNSA and DOE have studied contracts, particularly DoD general contracting, in recent years in a conscientious effort to understand the effects of different contract provisions, with the goal of better aligning contract terms with the performance the government seeks. However, top managers within NNSA have varied views of the kind of relationship that should exist between the laboratories and the agency. Absent a coherent push toward a single FFRDC relationship, the panel is concerned that today’s laboratory contracts are built more on general contracting practices, and are not well aligned with that desired relationship, in particular with respect to supporting a closer relationship with the sponsor than in normal contractual relationships. Following the Augustine-Mies report, DOE undertook an extensive effort to develop two model contracts for its National Laboratories—one it labeled a “revolutionary contract” and the other it called an “evolutionary contract.” The panel is aware that teams of people were involved in developing these models: from DOE they included people from program offices, site offices, procurement, and other functional offices, and from the National Labs they included the COOs, CFOs, program leaders, and other PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 49

administrative staff. The goal of the new model contracts was to facilitate and incentivize the FFRDC role in which significant degrees of responsibility and accountability would be assigned to the laboratories, and responsibility for overall program direction (the “what”) and oversight were assigned to the government. One such contract was successfully renegotiated and signed for DOE’s SLAC National Accelerator Laboratory, but the panel was told that staff at DOE resisted the use of such contracts for other DOE laboratories. When NNSA issued a laboratory contract subsequently, it tried to incorporate some of the beneficial elements of those model contracts, but the panel was told that its changes were only incremental. The panel believes that the contract-related recommendations from the Augustine-Mies report, and the spirit behind them, could lead to improved contracts for NNSA’s FFRDCs. The FFRDCs are different from the other M&Os, and their contracts should certainly reflect and encourage those differences. Revisiting the Augustine-Mies report and the “evolutionary/revolutionary” exercise, drawing on perspectives from both within NNSA and external to it, would be fruitful. Aligning the contract mechanisms for the laboratories with the desired outcome of ensuring they function as trusted expert advisors could help strengthen the FFRDC relationships. Recommendation 4.3: The National Nuclear Security Administration (NNSA) should identify a more effective contract model for its Federally Funded Research and Development Centers (FFRDCs). The Administrator should convene a working group to develop an FFRDC contract model to better enable the desired FFRDC relationships, which are to be closer than normal contractual relationships. The working group should include staff within NNSA and its laboratories as well as experts from other agencies with a large number of FFRDCs, such as DoD. SUSTAINMENT OF CORE S&E CAPABILITIES As pointed out in the panel’s fourth interim report, “A strong foundation of wide-ranging science and engineering research is essential to fulfilling the nuclear security mission, because the technical challenges of stockpile stewardship, and of nuclear security more generally, require deep and authoritative understanding of many areas of science and engineering.”7 This foundation provides not only the understanding of the phenomena, mechanisms, and materials underlying current and future nuclear materials and weapons systems but also the developing technologies for future threats and technical improvements required for a complete nuclear security enterprise. A high-quality and broad- based science and engineering workforce is essential to success of the nuclear security mission. All three laboratories have clearly articulated strategies for their core S&E activities and how they relate to the NNSA mission—the 7 research foundations for SNL, 6 laboratory pillars for LANL, and 7 core competencies for LLNL. The laboratories’ S&E base requires an engaged and dedicated high-quality set of individuals who understand and are committed to the mission and their critical role in it. Their importance to the mission and national service more broadly provides both a challenge and an opportunity for NNSA to recruit, hire, and engage such talent, including in very competitive fields like artificial intelligence, data science, and quantum information, devices, and materials. Sustaining the S&E base is especially challenging now in light of the rapidly expanding portfolio of enterprise programs and projects that have required rapid expansion of the overall labs’ workforce. In several key areas, the panel was told that over 40 percent of the technical workforce has less than 5 years of experience at the labs. Salaries, benefits, and ease of entry at leading commercial, industrial, and even academic institutions can be more attractive to candidates than at the NNSA labs. So, it is critically 7 National Academies of Sciences, Engineering, and Medicine and the National Academy of Public Administration, 2020, Report 4 on Tracking and Assessing Governance and Management Reform in the Nuclear Security Enterprise, The National Academies Press, Washington, D.C., p. 17. PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 50

important that the labs be strategically engaged in the external S&E communities and that they maintain healthy pipelines for bringing in and nurturing new talent from those communities. The panel’s lab visits and interviews in July and August 2019 revealed that some aspects of recruitment, onboarding, mentoring, mission integration, and administrative support of S&E staff are having a negative impact on the laboratory S&E work environment. The primary finding from the panel’s fourth interim report (February 2020) is repeated here:  Both product-focused work and sustainment of core S&E capabilities are essential to, and must be supported by, the nuclear security enterprise. That balance is essential to accomplishing the mission, and the laboratories’ researchers are motivated by the dual challenge. This characteristic of NNSA labs benefits recruitment and retention and could be highlighted more prominently.  People are the essential resource, and they are under stress.  The infrastructure needs attention and is essential to enable continued excellence in S&E.  Bureaucracy is overly burdensome to the staff.  M&O leaders do not seem fully aware of staff concerns.8 The panel was struck by the severe shortage of administrative support for scientists and engineers. Some senior scientists estimated that they must expend up to 20 percent of their time on administrative tasks that could be handled by much less costly support staff, whose numbers have dwindled for the purpose of reducing overhead costs. Many scientists and engineers thought that the labs should expand availability of administrative staff to S&E staff to increase the latter’s efficiency. Although each of the laboratories plan or have in place a process for onboarding new S&E staff, the panel felt that this could be enhanced. Most of the newer staff members had not received an overview of their laboratory’s outstanding past achievements to illustrate the unique capabilities and solutions the lab has provided in the national interest. Because many of them expressed strong support for the opportunity to support the mission, this is a missed opportunity. More generally, a number of S&E employees found their NNSA laboratory to be an appealing place for R&D because of the diverse range of experts with whom they could collaborate, but their orientation missed the opportunity to explain the identities and organizations of the laboratory experts in various fields. Better onboarding could help new scientists and engineers learn how to find expertise and build their networks, and provide advice on how they can “market” and “sell” their ideas to project managers across the organization. Even prosaic matters like managing the administrative burdens were sometimes overlooked, necessitating new researchers to learn on the job. A primary observation from the panel’s site visits is that senior research management seemed to underestimate the amount of stress being felt by their S&E employees. That stress is driven by administrative burden, funding uncertainties, and other factors, and it did not appear to be fully appreciated by the laboratory leadership. The panel learned a great deal just by holding discussion groups for one day with perhaps two dozen people at each laboratory. Because of that, the panel included the following recommendation in its fourth interim report: The Directors of the three laboratories, with National Nuclear Security Administration (NNSA) assistance as needed, should periodically assess the environment for work that sustains the enterprise’s core science and engineering (S&E) capabilities. This assessment should include input from the researchers engaged in that work, and identify steps needed to strengthen the environment.9 8 National Academies of Sciences, Engineering, and Medicine and the National Academy of Public Administration, 2020, Report 4 on Tracking and Assessing Governance and Management Reform in the Nuclear Security Enterprise, pp. 17–18. 9 National Academies of Sciences, Engineering, and Medicine and the National Academy of Public Administration, 2020, Report 4 on Tracking and Assessing Governance and Management Reform in the Nuclear Security Enterprise, p. 3. PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 51

Last, the panel has been struck by how much the S&E core capabilities are dependent on Laboratory Directed Research and Development (LDRD) funds. For example, 24 percent of support for SNL’s Materials Science Research Foundation comes from LDRD. While the total amount of LDRD available at each laboratory is a large pool of money (between 5 and 6 percent of the overall laboratory budget), it cannot support all of the S&E work needed to sustain each laboratory’s core capabilities. The scientists and projects supported by LDRD provide essential interactions and relationships with the external S&E communities in universities and industry as well as the international community. Such relationships are important for maintaining the laboratories’ ability to recruit, retain, and collaborate with the best talent. At the time of the Augustine-Mies report, LDRD funds were fully burdened by overhead charges, which significantly reduced the amount of research they could support. The Augustine-Mies and CRENEL reports both recommended the removal of overhead charges on LDRD, and Congress did so, which was a very helpful step.10 While the total amount of LDRD funding is decided by each national laboratory, subject to a cap set by Congress, at various times NNSA has provided other sources of support for supplemental purposes. That can be important because LDRD-supported research is meant to be basic, and additional steps might be needed in order for LDRD results to be applied. In fact, the panel was told of recent cases at the laboratories where the output from LDRD research, although of potential value to an NNSA program, was not used because the program staff did not have time to take the necessary transitional steps. Until the 1990s, there was a line of Weapons Related Research funding to support that kind of applied R&D. Analogously, there was once a Process Development Program at the plants that supported R&D specific to manufacturing and materials, providing another bridge between basic and applied research. As part of the laboratories’ annual strategic planning reviews and discussions, it would be useful to consider how well the available funding supports the needed spectrum of R&D. Recommendation 4.4: In addition to the elements included in Recommendation 4.1, the National Nuclear Security Administration (NNSA) and management at its laboratories should take steps to improve the environment for science and engineering (S&E) research and development (R&D) to include the following:  A clear articulation of how the S&E core capabilities will be supported at the laboratories, perhaps including funding lines that would complement laboratory directed research and development (LDRD;  Enhanced onboarding processes to help new scientists and engineers become highly productive by emphasizing the laboratories’ strengths, expertise, organization, past accomplishments of service in the national interest, and roles and responsibilities as Federally Funded Research and Development Centers (FFRDCs). 10 The removal has not yet been made permanent, but such a move is under consideration in the FY 2021 NDAA. PREPUBLICATION COPY—SUBJECT TO FURTHER EDITORIAL CORRECTION 52

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The National Nuclear Security Administration (NNSA)leads a nuclear security enterprise that includes three national laboratories, several production facilities, and an experimental test site. NNSA's mission is protect the American people by maintaining a safe, secure, and effective nuclear weapons stockpile; by reducing global nuclear threats; and by providing the U.S. Navy with safe, militarily effective naval nuclear propulsion plants.

The FY2016 National Defense Authorization Act called for the National Academies, in partnership with the National Academy of Public Administration, to track and assess progress over 2016-2020 to reform governance and management of the enterprise. Governance and Management of the Nuclear Security Enterprise assesses the effectiveness of reform efforts and makes recommendations for further action.

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