Department of Energy
Mission Support Challenges Remain at Los Alamos and Lawrence Livermore National Laboratories Gao ID: GAO-04-370 February 27, 2004The University of California (University) operates the Los Alamos and Lawrence Livermore National Laboratories for the Department of Energy's National Nuclear Security Administration (NNSA). The two research laboratories, with a combined fiscal year 2003 budget of $2.3 billion, have had problems in such mission support areas as managing projects, conducting business operations, and ensuring safe nuclear operations. GAO was asked to describe the actions taken to address mission support problems identified in 2001, as well as problems that have since emerged, and to assess the main challenges to sustaining mission support improvements.
For the three mission support areas with problems as of 2001--managing construction and other major projects, maintaining and managing existing facilities, and ensuring safe operations of nuclear facilities--actions are basically complete in the first two areas but not in the third. For all three areas, NNSA incorporated new requirements into the contracts, developed new performance measures, and increased its oversight. The University of California has strengthened oversight of the laboratories by, among other things, establishing a new position of vice president for laboratory management. The laboratories will not fully comply with new requirements for providing a safety analysis of each nuclear facility until mid-2005. The actions taken by NNSA and the University to correct problems in project, facilities, and nuclear safety management were not systemic enough to keep problems from developing in other mission support areas after 2001. At the Los Alamos laboratory, emerging problems centered on business operations, including inadequate controls over procurement, purchase cards, and property management. The laboratory now has extensive corrective actions underway and expects to have most of the new measures in place by the end of 2005. At the Lawrence Livermore laboratory, the problems centered on emergency planning and preparedness, in that the laboratory had made little progress in developing an emergency management program that complied with NNSA requirements. The laboratory has taken steps over the past 2 years to improve in this area, and NNSA now estimates that the laboratory will have an approved emergency management program by the end of fiscal year 2004. NNSA and the University face three main challenges to sustaining improvements in mission support performance over the long term. The first challenge is for the laboratories to ensure that actions taken to address mission support problems translate into effective performance of mission support activities. A past lack of emphasis on mission support activities was a major factor when problems surfaced, particularly at the Los Alamos laboratory. Ensuring that mission support activities are effective will require sustained leadership, resources, and effective internal controls. The second challenge is ensuring appropriate and effective oversight of mission support activities, which has been inadequate in the past. In particular, a draft NNSA policy that calls for relying primarily on contractors' management controls raises concerns about the future adequacy of NNSA oversight. The third challenge is ensuring that the laboratories follow best practices in developing any future improvement initiatives. In its efforts to improve business systems, the Los Alamos laboratory did not follow best business practices for managing such improvements. Not doing so lessens the laboratory's ability to ensure that the efforts will achieve the desired results.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-04-370, Department of Energy: Mission Support Challenges Remain at Los Alamos and Lawrence Livermore National Laboratories
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Report to Congressional Requesters:
February 2004:
DEPARTMENT OF ENERGY:
Mission Support Challenges Remain at Los Alamos and Lawrence Livermore
National Laboratories:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-370]:
GAO Highlights:
Highlights of GAO-04-370, a report to Congressional Requesters
Why GAO Did This Study:
The University of California (University) operates the Los Alamos and
Lawrence Livermore National Laboratories for the Department of Energy‘s
National Nuclear Security Administration (NNSA). The two research
laboratories, with a combined fiscal year 2003 budget of $2.3 billion,
have had problems in such mission support areas as managing projects,
conducting business operations, and ensuring safe nuclear operations.
GAO was asked to describe the actions taken to address mission support
problems identified in 2001, as well as problems that have since
emerged, and to assess the main challenges to sustaining mission
support improvements.
What GAO Found:
For the three mission support areas with problems as of 2001”managing
construction and other major projects, maintaining and managing
existing facilities, and ensuring safe operations of nuclear
facilities”actions are basically complete in the first two areas but
not in the third. For all three areas, NNSA incorporated new
requirements into the contracts, developed new performance measures,
and increased its oversight. The University of California has
strengthened oversight of the laboratories by, among other things,
establishing a new position of vice president for laboratory
management. The laboratories will not fully comply with new
requirements for providing a safety analysis of each nuclear facility
until mid-2005.
The actions taken by NNSA and the University to correct problems in
project, facilities, and nuclear safety management were not systemic
enough to keep problems from developing in other mission support areas
after 2001. At the Los Alamos laboratory, emerging problems centered on
business operations, including inadequate controls over procurement,
purchase cards, and property management. The laboratory now has
extensive corrective actions underway and expects to have most of the
new measures in place by the end of 2005. At the Lawrence Livermore
laboratory, the problems centered on emergency planning and
preparedness, in that the laboratory had made little progress in
developing an emergency management program that complied with NNSA
requirements. The laboratory has taken steps over the past 2 years to
improve in this area, and NNSA now estimates that the laboratory will
have an approved emergency management program by the end of fiscal year
2004.
NNSA and the University face three main challenges to sustaining
improvements in mission support performance over the long term. The
first challenge is for the laboratories to ensure that actions taken to
address mission support problems translate into effective performance
of mission support activities. A past lack of emphasis on mission
support activities was a major factor when problems surfaced,
particularly at the Los Alamos laboratory. Ensuring that mission
support activities are effective will require sustained leadership,
resources, and effective internal controls. The second challenge is
ensuring appropriate and effective oversight of mission support
activities, which has been inadequate in the past. In particular, a
draft NNSA policy that calls for relying primarily on contractors‘
management controls raises concerns about the future adequacy of NNSA
oversight. The third challenge is ensuring that the laboratories follow
best practices in developing any future improvement initiatives. In its
efforts to improve business systems, the Los Alamos laboratory did not
follow best business practices for managing such improvements. Not
doing so lessens the laboratory‘s ability to ensure that the efforts
will achieve the desired results.
What GAO Recommends:
GAO recommends that the Secretary of Energy direct the NNSA
Administrator to take steps regarding mission support activities to
ensure that (1) any contractor operating the two laboratories provides
leadership, resources, and oversight to ensure effective activities;
(2) assessments of contractor performance evaluate the adequacy of
leadership, resources, and internal controls; (3) NNSA effectively
oversees contractor activities; and (4) improvement initiatives follow
best practices. In commenting on the report, NNSA cited actions taken
or planned that it said met the intent of these recommendations.
However, GAO believes that further improvements are needed.
www.gao.gov/cgi-bin/getrpt?GAO-04-370.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Robin M. Nazzaro at
(202) 512-3841 or nazzaror@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
NNSA and University's Actions Taken to Address Mission Support Problems
Identified in 2001 Have Not Been Fully Implemented:
After 2001, Additional Mission Support Problems Developed at the
Laboratories, and Further Corrective Actions Are Underway:
Challenges Remain for Sustaining Mission Support Improvements at the
Laboratories:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Energy:
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Acknowledgments:
Table:
Table 1: Information on NNSA's Contracts with the University of
California to Manage and Operate the Los Alamos and Lawrence Livermore
National Laboratories:
Abbreviations:
DNFSB: Defense Nuclear Facilities Safety Board:
DOE: Department of Energy:
NASA: National Aeronautics and Space Administration:
NNSA: National Nuclear Security Administration:
Letter February 27, 2004:
The Honorable Sherwood L. Boehlert:
Chairman:
The Honorable Bart Gordon:
Ranking Minority Member:
Committee on Science:
House of Representatives:
The Honorable Jerry F. Costello:
House of Representatives:
For more than 50 years, the University of California (University) has
operated the Los Alamos National Laboratory in New Mexico and the
Lawrence Livermore National Laboratory in California for the Department
of Energy (DOE). These two research laboratories, with a $2.9 billion
fiscal year 2003 budget, have a science and technology mission that
focuses on maintaining the nation's nuclear weapons, preventing nuclear
proliferation, and furthering scientific knowledge in chemistry,
structural biology, and mathematics. Besides conducting this research
and development work, managing and operating the two sites encompasses
a broad range of mission support functions, such as maintaining roads
and providing communications, managing facilities to ensure that needed
repairs are done to buildings, purchasing and accounting for products
and services, and ensuring good relations with local communities.
The two laboratories have a reputation for conducting world-class
science and technology work. Starting in the 1990s, however,
performance problems in various mission support areas have been
reported at both laboratories. These areas include project management
(managing projects to ensure they are completed on time and within
budget and achieve their intended purpose) and nuclear safety
(conducting operations and activities in a way that ensures the safety
of workers, the public, and the environment). Problems in these areas
included cost and schedule overruns on major projects, such as the
National Ignition Facility at the Lawrence Livermore
laboratory,[Footnote 1] and violations of nuclear safety rules that
resulted in overexposure of some workers to radiation at both
laboratories. Another mission support area--facilities management--had
also become an area of concern, as buildings continued to age and the
need for maintenance and repairs increased.
Mission support problems led congressional committees and others to
call on DOE to open these two contracts to competitive bidding.
Instead, in January 2001, DOE's National Nuclear Security
Administration (NNSA) [Footnote 2] decided to extend the University's
contracts through September 2005. NNSA officials believed they could
successfully address the laboratories' mission support problems using
contract mechanisms such as setting clearer performance expectations
and requiring the contractor to meet those expectations in order to
earn incentive fees. However, mission support problems continued to
occur at the laboratories in areas such as business operations
(accounting, procurement, and property management) and emergency
management (identifying possible hazards and threats and developing
plans and procedures to address the hazards). In December 2003, the
Congress enacted legislation to require NNSA to compete the contracts
for both laboratories when the current terms expire in 2005.
You asked us to identify the steps that NNSA and the University have
taken to improve contractor performance in mission support activities
at the laboratories and to assess whether any improvements can be
sustained over time. Our report (1) describes the actions taken to
address the major mission support problems identified when NNSA
extended the contracts in 2001,[Footnote 3] (2) describes the actions
taken to address additional mission support problems that have emerged
or become more significant since the contracts were extended in 2001,
and (3) assesses the major challenges NNSA and the University face in
sustaining improvements in mission support activities at the two
laboratories.
Results in Brief:
For the three problem areas that NNSA had identified in 2001--project
management, facilities management, and nuclear safety management--
actions are basically complete in the first two areas but not in the
third. For all three problem areas, NNSA incorporated new requirements
into its contracts with the University. The new requirements included,
for example, developing 10-year comprehensive site plans on how to meet
NNSA goals for stabilizing and reducing the deferred maintenance
backlog for aging facilities and submitting documentation of safety
requirements and operating procedures for each nuclear facility for
NNSA approval by April 2003. NNSA delineated, in a new appendix to the
contracts, the initiatives that would be required in the mission
support problem areas during the first 2 years of the new contracts.
NNSA also clarified the lines of authority and reporting at both
laboratory site offices and increased its oversight through such steps
as holding regular status meetings with senior University officials and
laboratory managers to monitor performance and identify emerging
concerns. For its part, the University's actions included establishing
an oversight board and a new position of vice president for laboratory
management to improve oversight at both laboratories. NNSA and the
University have generally completed the actions they plan to take
related to project management and facilities management, but they have
been slower in putting all steps in place for nuclear safety management
and will not complete these actions until mid-2005. The Lawrence
Livermore laboratory did not meet the original April 2003 deadline for
submitting required safety documentation for four of its nine nuclear
facilities because of resource constraints and changes in the work
activities at some of the facilities.
The actions taken by NNSA and the University to correct problems in
project, facilities, and nuclear safety management were not systemic
enough to keep problems from developing in other mission support areas
after 2001. NNSA and the University have initiated actions to address
problems that emerged or became more significant in business operations
and emergency planning, but these steps are not yet complete. At the
Los Alamos laboratory, problems emerging in the summer of 2002 centered
on business operations, including allegations of fraudulent use of
government purchase cards and questions about the adequacy of property
controls over items such as computers. In an effort to improve controls
over procurement and property management, the laboratory has been
working on more than 600 corrective actions, and it expects to complete
those actions by June 2004. Los Alamos also plans to put other measures
in place by the end of 2005, including a new computer system that will
integrate budgeting, accounting, procurement, and property management
activities. At the Lawrence Livermore laboratory, documented problems
with the laboratory's approach to emergency management took on greater
significance because the laboratory had made slow progress in
correcting problems with its emergency management program. Emergency
planning involves identifying hazards and threats such as the release
of radioactive or chemical materials from facilities, developing
emergency plans and procedures to address the hazards and threats, and
identifying personnel and resources needed to ensure an effective
emergency response. The laboratory has been working on improvements to
its plan, and NNSA officials estimate that the laboratory will have an
approved emergency management program in place by the end of fiscal
year 2004.
NNSA and the University face three main challenges to sustaining
improvements in mission support performance over the long term. The
first challenge is for the laboratories to ensure that the actions
taken to address mission support problems translate into effective
performance of mission support activities. A past lack of emphasis on
procurement, property management, emergency management, and other
mission support activities was a major contributor to recent problems
at the laboratories, particularly at the Los Alamos laboratory, and it
will be important to ensure that the current emphasis results in
systemic improvement, not simply in completing a set of required
actions. Ensuring that these and other mission support activities are
effective will require sustained leadership and resources, effective
internal controls, and an assessment process that evaluates the impact
of improvement actions on performance. The second challenge is to
ensure that NNSA oversight of the laboratories' mission support
activities will be effective once the current round of actions has been
completed. NNSA's oversight has been inadequate in the past, and recent
proposed changes have raised concerns about the future adequacy of
NNSA's involvement. Under a draft NNSA policy, NNSA would tailor the
level of federal oversight to the individual sites and contractors
based on the quality and completeness of the contractor assurance
systems and an acceptable level of contractor performance. Although we
believe the overall concept of relying in part on a contractor's
demonstrated system of management controls is reasonable, we and
independent oversight organizations have concerns about whether NNSA,
given its past performance in this area, will effectively implement
such a system and successfully carry out its oversight
responsibilities. The third challenge is to ensure that the two
laboratories manage efforts to improve their operations using a best
practices framework that focuses on outcomes. For example, in embarking
on a major effort to improve its management of business operations at
the Los Alamos laboratory, including making changes to procurement and
property systems and designing a new computer system to integrate these
and other business activities, the laboratory did not follow best
practices for managing such improvements. Specifically, the laboratory
did not define measurable goals and outcome measures to use in
evaluating the overall success of the improvement plan. Without these
key elements in place, neither the laboratory nor NNSA can be sure that
improvement efforts are achieving the desired outcomes or are cost-
effective.
To address these ongoing mission support challenges at the Los Alamos
and Lawrence Livermore laboratories, we are recommending that the
Secretary of Energy direct the Administrator of NNSA to take steps to
ensure that the contractor operating each laboratory provides
sufficient leadership, resources, and oversight to ensure that mission
support activities are sustained and effective; that NNSA effectively
oversees contractor performance of mission support activities,
including evaluating the leadership, resources, and internal controls
associated with those activities; and that the laboratories'
improvement initiatives follow best practices.
NNSA said that two of our recommendations were not needed--ensuring
that NNSA performance assessments include evaluating the adequacy of
laboratory leadership, resources, and internal controls; and ensuring
that NNSA effectively implements its proposed contractor-based
oversight policy--because NNSA had already taken steps that it believes
were consistent with the recommendations. NNSA was silent on the need
for the other two recommendations--ensuring that any contractors
operating the laboratories adequately support mission support
activities, and follow best practices in implementing improvement
initiatives--but stated that the University is committed to providing
the leadership, resources, and oversight to ensure that mission support
activities are conducted effectively, and to ensuring that its
improvement efforts continue to achieve the desired results. However,
as discussed in this report, the laboratories' mission support
performance problems have not been fully resolved and improved
performance has not been fully demonstrated. We continue to believe
that further improvements in mission support activities are necessary
and that our recommendations are warranted.
Background:
NNSA carries out its nuclear weapons research missions at research
laboratories located in two states--California and New Mexico.[Footnote
4] NNSA and DOE have traditionally relied on contractors to carry out
the department's missions. However, the department's history of
inadequate management and oversight and failure to hold its contractors
accountable for results led GAO in 1990 to designate DOE contract
management as a high-risk area vulnerable to fraud, waste, abuse, and
mismanagement. As of February 2004, this high-risk designation was
still in effect.
At the Los Alamos and Lawrence Livermore laboratories, about 200 NNSA
personnel at laboratory site offices are responsible for oversight of
the work performed under contract by over 16,000 employees of the
University of California. The contracts with the University provide for
reimbursement of all allowable costs plus a fee that is in addition to
the allowable costs. The total fee available to the University includes
a base or fixed amount that is guaranteed and an "at-risk" amount that
is tied to performance measures in the contract.[Footnote 5] (See table
1.):
Table 1: Information on NNSA's Contracts with the University of
California to Manage and Operate the Los Alamos and Lawrence Livermore
National Laboratories:
Year contract initially awarded to University;
Los Alamos: 1943;
Lawrence Livermore: 1952.
Fiscal year 2003 budget;
Los Alamos: $1.65 billion;
Lawrence Livermore: $1.2 billion.
Fiscal year 2003 base fee;
Los Alamos: $3.5 million;
Lawrence Livermore: $2.8 million.
Fiscal year 2003 at-risk fee;
Los Alamos: $5.2 million;
Lawrence Livermore: $4.3 million.
Fiscal year 2003 total fee available;
Los Alamos: $8.7 million;
Lawrence Livermore: $7.1 million.
Source: NNSA data.
[End of table]
For more than a decade, GAO and others have reported on problems with
the mission support activities at the two laboratories, including
project management, nuclear safety management, and facilities
management. The problems have included cost and schedule overruns on
major projects such as the Dual-Axis Radiographic Hydrodynamic Test
Facility at Los Alamos; lack of adequate safety documentation for
nuclear facilities; and a deferred maintenance backlog of about $318
million at Lawrence Livermore and $564 million at Los Alamos. In
addition, in the early 1990s, we reported on poor controls over
business operations such as procurement and property management at the
Lawrence Livermore laboratory.
For several years, NNSA has chosen to address these performance
problems using contract mechanisms. For example, when DOE extended the
Los Alamos contract in October 1997, it included a special provision in
the contract that would allow DOE to terminate the contract if the
University failed to make improvements in several mission support
areas--ensuring that workers, the public, and the environment are
protected; cleaning up radioactive and hazardous wastes; and
maintaining a good relationship with the local community. The
department subsequently decided to continue the contract after the Los
Alamos laboratory made improvements in these three areas. However, when
NNSA extended the contracts for both of the laboratories in January
2001, it included additional requirements to improve project
management, facilities management, and nuclear safety management.
Oversight of the laboratories occurs at several different levels. NNSA
provides direct oversight of the two laboratories through its site
offices. In addition, NNSA headquarters staff offices, such as the
Offices of Defense Programs and Nonproliferation, provide funding and
program direction to the site offices. DOE's Offices of Independent
Oversight and Performance Assurance and Price-Anderson Enforcement also
oversee laboratory activities. Finally, the Defense Nuclear Facilities
Safety Board, an independent oversight organization created by the
Congress in 1988, provides advice and recommendations to the Secretary
of Energy to ensure adequate protection of public health and safety at
all of the department's defense nuclear facilities, including the Los
Alamos and Lawrence Livermore laboratories.
NNSA and University's Actions Taken to Address Mission Support Problems
Identified in 2001 Have Not Been Fully Implemented:
NNSA and the University have taken a number of steps to address the
major mission support problems that were known when NNSA extended the
University's contracts in 2001, but all actions will not be complete
until mid-2005. When NNSA decided to extend the contracts for the two
laboratories, concerns had emerged in three areas: project management,
facilities management, and nuclear safety. For its part, NNSA
incorporated into the two contracts new agencywide requirements related
to each area, developed performance measures focusing on these
activities, and changed its overall structure and approach for
overseeing the actions taken at the laboratory level. In response, the
University has implemented many of NNSA's requirements at the two
laboratories, particularly in project and facilities management, but
progress has been slower for nuclear safety. The University also has
taken steps to improve its oversight of the two laboratories and to
foster coordination and collaboration between them.
NNSA Set New Requirements and Moved to Strengthen Its Oversight:
One step NNSA took to improve laboratory performance in mission support
activities was to incorporate into the contracts new agencywide
requirements related to all three of the identified problem areas. In
general, these new requirements call for the laboratories to be more
disciplined and businesslike in carrying out their management
responsibilities.
* Project Management. In October 2000, DOE approved Order 413.3, which
set agency wide standards for managing projects, including NNSA
projects. The order is intended to help ensure that projects are
delivered on schedule and within budget and are fully capable of
meeting mission requirements as well as environmental, safety, and
health standards.[Footnote 6] It requires that all projects costing
more than $5 million go through five decision checkpoints, such as
approving mission need and approving the start of operations. At each
checkpoint, NNSA must make a formal determination to allow the project
to proceed.
* Facilities Management. Many of the facilities at NNSA sites are
decades old and in poor condition. For fiscal year 2003, NNSA required
each nuclear weapons site to develop a 10-year comprehensive site plan
for facilities management that incorporated NNSA's strategic goals. The
main objective of the plans is to restore, rebuild, and revitalize the
physical infrastructure of the nuclear weapons complex. Two of NNSA's
specific goals are to stabilize the deferred maintenance backlog by the
end of fiscal year 2005 and to reduce the amount of deferred
maintenance to within industry standards by the end of fiscal year
2009.
* Nuclear Safety. DOE has always required that the contractors
responsible for a nuclear facility analyze the facility, the work to be
performed, and the associated hazards. Contractors use this information
to identify the conditions, safe boundaries, and hazard controls
necessary to protect workers, the public, and the environment from
adverse consequences. Finally, the contractors document the safety
requirements and operating procedures for each facility, referred to as
the safety basis. Although DOE included these steps in an order for
contractors to follow, the laboratories had not consistently done a
thorough and quality analysis of their nuclear facilities. In January
2001, DOE finalized a revised nuclear safety rule, requiring that
contractors responsible for nuclear facilities establish and maintain a
safety basis.[Footnote 7] Contractors may be subject to civil penalties
for failing to comply with this requirement.[Footnote 8] This revised
rule strengthened NNSA's ability to hold contractors accountable for
the safety of nuclear facilities:
In addition to incorporating new agencywide requirements into the two
contracts, NNSA established new contract mechanisms and performance
measures to help ensure that the laboratories put in place management
improvements for mission support activities. These measurements have
changed over time. Initially, NNSA added a number of specific
improvement initiatives in a new appendix (appendix O) to the contract,
established to address known problems areas and provide a framework for
improved results. For the first 2 years of the contract, the
laboratories had to meet all of the requirements in appendix O on a
pass/fail basis in order to qualify for performance incentive fees.
NNSA phased out appendix O at the end of fiscal year 2002 after
determining that the laboratories had met all of the provisions and
requirements.
Starting in fiscal year 2003, NNSA shifted to assessing a "critical
few" broadly defined performance objectives. In prior fiscal years, the
two laboratory contracts contained dozens of individual performance
objectives, and poor performance in one of these individual objectives
would have minimal impact on NNSA's evaluation of overall contractor
performance or the amount of fee that could be earned by the
contractor. In fiscal year 2003, NNSA narrowed the number of
performance objectives in the two contracts to nine objectives that
define the mission of the laboratories, including two objectives that
cover mission support activities--achieving successful completion of
projects and maintaining secure, safe, environmentally sound,
effective, and efficient operations and infrastructure in support of
mission objectives. In fiscal year 2004, NNSA added a third mission
support objective--improving or maintaining effective business systems
and practices that safeguard public assets and support mission
objectives.
The third main step NNSA took was to revise its approach to overseeing
the laboratories. NNSA moved additional oversight staff, which had
previously been in operations offices located in distant cities, to the
laboratories themselves to bring more oversight staff closer to the
laboratory's day-to-day operations. NNSA also began regular meetings
with senior managers at the University and the two laboratories to
identify and resolve emerging issues or areas that need improvement.
Finally, NNSA designated the senior on-site NNSA representative--the
site office manager--as the contracting officer for the laboratory. The
contracting officer is the main point of contact and the single point
of accountability for the contract. Before this change, the contracting
officer was located in the procurement division at the operations
office and did not report to the NNSA site office manager. NNSA
believed this organizational change would clarify roles and
responsibilities, eliminate a layer of management, and provide more
effective federal oversight.
University Strengthened Management and Began Implementing New
Requirements:
The University made several changes designed to strengthen management
of mission support activities. The first was to redefine the
relationship between the two laboratories, making their efforts at
managing mission support more collaborative and interactive.
Previously, the laboratories had operated more autonomously and
competitively--an approach the University fostered as the best means
for achieving world-class science. The recent onset of mission support
problems convinced University officials that increased coordination in
mission support activities would be beneficial. According to University
officials, they wanted to create an environment in which the
laboratories would identify problems, share solutions, create best
practices, and be more consistent in their approaches to laboratory
management.
Specific steps the University took to develop a more collaborative
relationship between the two laboratories included creating a position
of vice president of laboratory management,[Footnote 9] loaning staff
between the two laboratories and from the University as needed, and
creating standardized policies. For example, after the Lawrence
Livermore laboratory developed a model for a risk-based approach to
facilities management, the Lawrence Livermore staff visited Los Alamos
to help that laboratory apply the approach to its facilities
management. In addition, when the University determined that the two
laboratories had different security policies regarding foreign
nationals and different definitions of "sensitive property" for
property management, it required the laboratories to work out the
differences and devise one best practice.
The second major change by the University was to provide more outside
assistance to the laboratories. The University contracted with firms
from private industry for expertise and advice on nuclear facility
safety at the Los Alamos laboratory and on project management at both
laboratories. In addition, since the early 1990s, a University
President's Council supported by five different panels had been in
place to make University expertise available to the laboratories in
such areas as project management and environment, safety, and health.
In 2001, the University increased the interaction between the Council,
the panels, and the laboratories, for example, by assigning a mentor
from the project management panel to each of the major projects at the
laboratories. In November 2003, the University also created two
additional oversight groups to strengthen management and oversight of
the two laboratories and to make more expertise available from outside
the University.[Footnote 10]
Laboratories' Actions Are in Various Stages of Completion:
Although NNSA had substantially completed its efforts at incorporating
new requirements into the contracts, establishing new performance
measures, and modifying its oversight approach, the laboratories'
efforts to implement the new requirements are in various stages of
completion.
* Project management. By June 2002, both laboratories had completed
planned actions, including implementing new DOE procedures for managing
projects, providing improved training for project managers, and
providing improved assistance to project teams. In addition, both
laboratories had standardized the formats for monthly reporting on cost
and schedule for major projects to make it easier to identify negative
performance trends.
* Facilities management. By October 2002, both laboratories had
completed 10-year strategic plans detailing how the laboratories will
restore, rebuild, and revitalize their physical infrastructures. The
plans incorporated NNSA's goals of stabilizing deferred maintenance by
fiscal year 2005 and reducing deferred maintenance to industry
standards by fiscal year 2009. According to the Los Alamos 10-year
plan, industry standards set maintenance costs at about 2 to 4 percent
of the estimated replacement value of the entire facility. To achieve
this goal, Los Alamos plans to increase maintenance funding and
implement the corrective actions necessary to create a more efficient
program. Los Alamos and NNSA officials noted that some of the actions
would involve long-term efforts spanning several years. In contrast,
since 1998, the Lawrence Livermore laboratory has had a risk-based
facility maintenance program to prioritize facility maintenance
requirements. In addition, the laboratory began to assess a "laboratory
facility charge" per square foot to building occupants, both to fund
facility maintenance and to encourage users to give up unnecessary
space.[Footnote 11] As a result, the Lawrence Livermore laboratory has
already met NNSA's fiscal year 2005 goal of stabilizing the deferred
maintenance backlog.
* Nuclear safety. The two laboratories did not submit all required
safety analysis documentation by the April 2003 milestone date, and
they may not be fully in compliance until mid-2005. Federal regulations
required that by April 10, 2003, the laboratories must have provided
assurance that they could meet new and enhanced nuclear safety
requirements. The Los Alamos laboratory initially reported that it had
met the deadline for providing that assurance, but later disclosed to
NNSA that some radioactive waste sites were not included in the
original analyses submitted to NNSA. In December 2003, NNSA and the
laboratory agreed that 11 radioactive waste sites were subject to the
nuclear safety requirement. NNSA expects the laboratory to provide the
safety basis documentation on these sites by April 2004. In addition,
NNSA reported in its fiscal year 2003 assessment for the Los Alamos
laboratory that the quality of 7 of the 12 safety analyses submitted on
time had been unsatisfactory and required revision. As for the Lawrence
Livermore laboratory, it completed 5 of the 9 required safety analyses
by the April 10, 2003, deadline and requested and received extensions
for submitting the remaining analyses. NNSA has granted an extension
until April 2005 for the laboratory to submit the safety analysis for
the final facility. Lawrence Livermore laboratory officials said they
did not meet the original deadline because of resource constraints and
changes in the work activities at some of the facilities.
After 2001, Additional Mission Support Problems Developed at the
Laboratories, and Further Corrective Actions Are Underway:
Despite the steps taken in 2001 to address mission support problems at
the two laboratories, the laboratories have encountered additional
problems in mission support activities and are taking further actions
to address those problems. New problems in business operations, such as
controls over purchase cards and property, emerged at the Los Alamos
laboratory in 2002, while developing an emergency management program
that complied with NNSA requirements continued to be a problem at the
Lawrence Livermore laboratory.
Problems Surfaced with Business Operations at Los Alamos:
Beginning in the summer of 2002, a series of problems with business
operations at the Los Alamos laboratory surfaced, raising questions
about the effectiveness of controls over government purchase cards and
property. These events included allegations of fraudulent use of
government purchase cards and purchase orders by a few Los Alamos
employees, questions about the adequacy of property controls over items
such as computers, and disputed rationales for the laboratory's firing
of two investigators who were working on some of these cases. In an
April 2003 report on the problems with business operations at Los
Alamos,[Footnote 12] the department identified multiple causes,
including (1) the University's supervision of business processes at the
laboratory was ineffective, (2) NNSA's oversight was narrowly focused
on specific performance measures in the contract rather than on overall
effectiveness, and (3) both the University and NNSA may have ignored
warning signs of problems because other evaluations of contractor
performance did not identify significant weaknesses. The report
concluded that the actual loss to the federal government could have
been far greater than it actually was, and the business practices in
place in 2002 would not have been able to prevent or detect such
losses. In addition, the report concluded that the firing of the two
investigators was inappropriate and demonstrated the degree to which
the laboratory's management was out of touch with activities at the
laboratory.
In January 2001, when NNSA extended and modified the contract for the
Los Alamos laboratory, NNSA officials were not aware of the problems
with business operations at the laboratory. NNSA did not consider
business operations at Los Alamos to be an area of concern to include
in the ongoing mission support improvement efforts. Furthermore, even
after the problems with business operations at Los Alamos emerged in
the summer of 2002, NNSA did not include any performance measures for
business operations at the start of fiscal year 2003. It was not until
February 2003 that NNSA added performance measures to the contract to
address the business operations problems. NNSA also modified its method
of assessing contractor performance in fiscal year 2003 to provide a
more integrated evaluation of performance in business operations.
Once the significance of the problems with business operations at the
Los Alamos laboratory was known, the University responded with
corrective actions. The University made sweeping changes in the Los
Alamos management team, replacing, among others, the laboratory
director, principal deputy director, chief financial officer, and
laboratory auditor. In addition, the University commissioned a series
of internal and external reviews to identify further problems and
control weaknesses in procurement and property management. These
reviews resulted in more than 300 findings and recommendations to
improve controls. The laboratory is in the process of implementing more
than 600 corrective actions to respond to these recommendations and
implement other laboratory initiatives and expects to complete these
corrective actions by June 2004.
As a fuller understanding of the scope of the problem emerged, managers
at the Los Alamos laboratory decided to address the problems with
business operations in three phases. Initially, the laboratory is
taking hundreds of specific actions in response to identified problems
and recommendations. These actions included changing procedures and
strengthening internal controls. According to the laboratory managers,
the second phase involves a more comprehensive change to business
systems by designing and implementing an improved, integrated business
computer system that will facilitate both more efficient and more
effective business operations. Laboratory officials most recently
estimated the cost of this system, currently under development, at
about $150 million. Laboratory management said the last phase will
involve developing and implementing a set of performance goals and
measures for business operations so that laboratory management can
better track and sustain results in this important area. The laboratory
plans on having these additional measures in place by the end of 2005.
In April 2003, primarily because of these ongoing problems with
business operations, the Secretary of Energy announced his intention to
open the Los Alamos contract to competition for the first time, when
the current contract expires in September 2005. Although acknowledging
the University's contribution to high caliber science at Los Alamos,
the Secretary stated that he held the University responsible for the
systemic management failures at the laboratory. The Secretary
encouraged the University to enter the contract competition, but made
clear that the laboratory's performance in business services needed to
be as good as its performance in science.
Lawrence Livermore Continued to Have Problems with Emergency
Management:
The Lawrence Livermore laboratory has had difficulty developing an
emergency management program that complies with NNSA requirements.
Emergency planning consists of identifying hazards, threats, and ways
to mitigate hazards; developing and preparing emergency plans and
procedures; and identifying personnel and resources needed to ensure
effective emergency response. Effective emergency management has been
an issue of increasing significance since the terrorist attacks against
the United States in September 2001.
When NNSA extended the contract in January 2001, NNSA recognized that
the emergency management program at the Lawrence Livermore laboratory
was not in compliance with DOE Order 151.1, which sets out the program
requirements. For example, the laboratory had not included in its
previous assessment of hazards and risks even the possibility that a
release of materials or other incidents on site would potentially
travel off site and affect the local community outside the boundaries
of the Livermore site. As a first step toward compliance, NNSA included
a requirement in the contract for 2001 that the laboratory prepare and
submit for approval hazard assessments for each of its facilities and
activities that met the specified thresholds for such assessments.
These assessments were submitted on time in May 2001 and were reviewed
and approved by NNSA.
In the fiscal year 2002 performance measures for the contract, NNSA
required the laboratory to develop and implement a plan to achieve
substantial compliance with DOE Order 151.1 by September 2003. This
plan was to include a schedule and milestones to satisfy all the
elements of an emergency management program, such as emergency
preparedness training and an emergency public information program.
Although the laboratory submitted the first draft of the plan on time
early in the fiscal year, the quality of the plan did not meet NNSA
expectations, and the laboratory received a marginal rating on this
measure for fiscal year 2002.[Footnote 13] NNSA required the laboratory
to revise and resubmit its plan. In its overall evaluation of the
laboratory's performance for that year, NNSA identified implementing an
effective emergency management program as one of the three
institutional management challenges facing the laboratory.
In July of 2002, DOE's Office of Independent Oversight and Performance
Assurance criticized the laboratory's lack of progress in resolving its
problems with emergency management. The review team identified a number
of important procedural and performance weaknesses. For example, the
laboratory did not have clearly defined processes for deciding on the
appropriate on-site and off-site protective actions to take. The report
concluded that the laboratory faced significant challenges in
implementing improvements in the program and that the poor quality of
the documents provided to NNSA raised serious questions about the
laboratory's ability to meet the implementation milestones in the plan.
Starting in fiscal year 2003, NNSA officials took additional steps to
help ensure that the laboratory addressed its emergency management
problems. In the fiscal year 2003 and 2004 performance measures in the
laboratory contract, emergency management was included as one of the
"critical few" measures. According to an NNSA official, this increased
the focus of senior management attention on the activity. Prior to
fiscal year 2003, performance measures for emergency management were
included as part of the overall performance objective of environment,
safety, and health and received less emphasis and attention. The
laboratory received a satisfactory rating (one step higher than the
fiscal year 2002 marginal rating) on the fiscal year 2003 emergency
management measure. NNSA now estimates that the laboratory will have an
emergency management program that is in substantial compliance with DOE
orders by the end of fiscal year 2004.
In contrast to the Los Alamos contract, the Secretary had not signaled
his intention about whether to extend or compete the Lawrence Livermore
laboratory contract. However, in the fiscal year 2004 appropriations
act for energy and water development, the Congress required DOE to
compete the Lawrence Livermore laboratory contract when the current
contract expires in 2005. The statute provides that no appropriated
funds for fiscal year 2004 or any previous fiscal year could be used
for specified laboratory contracts that had been awarded more than 50
years ago without competition, unless the Secretary of Energy announces
a decision to compete the contracts at the end of their current
terms.[Footnote 14] In late January 2004, the Secretary announced the
decision to compete the specified laboratory contracts, including those
for the Los Alamos and Lawrence Livermore laboratories.
Challenges Remain for Sustaining Mission Support Improvements at the
Laboratories:
NNSA and the University face three main challenges to sustaining
improvements over the long term in mission support activities at the
two laboratories. These challenges include (1) ensuring that the
mission support activities are effectively performed, (2) ensuring that
NNSA provides effective oversight of laboratories' activities, and (3)
ensuring that management improvement initiatives such as the
improvements to business systems at the Los Alamos laboratory fully
address the existing problems and are carried out in a systematic
manner consistent with best practices.
Ensuring that Mission Support Activities Are Effectively Performed:
A major factor leading to the problems with managing mission support
activities at the laboratories, including an increased potential for
fraud, waste, and abuse, was what one internal DOE assessment referred
to as the devaluing of mission support activities by laboratory
personnel. Although significant investments in improving mission
support activities and controls have subsequently occurred, there are
continuing concerns about whether the laboratories will continue to
place sufficient emphasis on mission support activities to ensure that
these functions are effectively performed.
Ensuring that actions taken to address mission support problems
translate into effective performance of mission support requires
establishing and maintaining an effective system of management control.
Office of Management and Budget Circular No. A-123 defines management
controls as the organization, policies, and procedures used to
reasonably ensure that (1) programs achieve their intended results; (2)
resources are used consistent with agency missions; (3) programs and
resources are protected from waste, fraud, and mismanagement; (4) laws
and regulations are followed; and (5) reliable and timely information
is obtained, maintained, reported, and used for decision making.
Effective management controls require leadership and commitment on the
part of management. Internal control standards state that the attitude
and philosophy of management toward information systems, accounting,
and monitoring can have a profound effect on internal control.[Footnote
15] The standards require management to establish and maintain an
organizational environment that sets a positive and supportive attitude
toward internal control.
The two laboratories have differed in the degree to which they have
been successful in ensuring that mission support activities are
effectively performed and in maintaining effective management controls.
The Los Alamos laboratory had over time been weakening its management
controls over some mission support activities. Responding to pressures
to reduce overhead costs and a view that the NNSA laboratories were
unnecessarily burdened with administrative and procedural requirements
that were not adequately serving mission needs, the laboratory pursued
cost efficiencies in mission support activities without sufficient
regard for ensuring that the overall management control system was
effective. For example, since fiscal year 1995, the Los Alamos
laboratory has reduced the relative funding for mission support
activities in order to provide more funding to mission activities. The
reduced funding contributed to the weakening of business controls as
the laboratory scaled back or eliminated steps, such as reviewing small
item purchases because fewer staff were available to perform the
reviews.
The problems with management controls at the Los Alamos laboratory were
to some extent due to the laboratory's organizational culture. An April
2003 DOE report on the business operations problems at the Los Alamos
laboratory cited cultural problems as one of the underlying causes of
the systemic management failure of business systems at the
laboratory.[Footnote 16] The report stated that the Los Alamos culture
exalted science and devalued business practices, and that changing this
attitude would be the most difficult long-term challenge facing the
laboratory, regardless of who manages it in the future. NNSA and
laboratory officials at Los Alamos have stated that the pressures to
reduce mission support costs will probably continue, which increases
the challenges associated with improving controls and ensuring that
mission support activities are effectively performed.
In contrast to the problems documented at the Los Alamos laboratory,
the Lawrence Livermore laboratory has apparently been more successful
in emphasizing the importance of mission support activities and
ensuring that these support activities are effectively performed. The
laboratory encountered similar problems with its business operations in
the early-1990s, including weaknesses in procurement and property
management, and took steps at that time to improve its financial and
accounting systems. Thus, when faced with the same pressures to reduce
overhead costs in recent years, the Lawrence Livermore laboratory was
better able to accomplish those reductions without significantly
degrading the quality or effectiveness of its internal controls. For
example, a June 2003 external assessment of business systems at the
Lawrence Livermore laboratory identified no material weaknesses in
internal control systems but did contain recommendations to enhance
management controls in such areas as procurement and property
management. In contrast, external reviews of procurement systems at the
Los Alamos laboratory identified significant weaknesses in internal
controls, such as insufficient policies and procedures and inadequate
management.
NNSA recently began to address these organizational culture issues and
the need to understand the importance of effective management controls.
The problems with management controls at the Los Alamos laboratory are
similar to the organizational problems documented at the National
Aeronautics and Space Administration (NASA) after the Columbia space
shuttle accident in February 2003. The independent panel tasked with
investigating the causes of the accident reported in August 2003 that
NASA's organizational culture was a contributing factor to the
breakdown in management controls intended to ensure safety for the
shuttle and its crew.[Footnote 17] Specifically, the report cited as
one of the root causes of the accident the organizational culture at
NASA, which emphasized mission rather than safety. In addition, under
pressure to reduce costs, the agency had transferred responsibilities
to the private sector while reducing federal oversight. As part of its
efforts to improve operations at the laboratories, the NNSA
Administrator has required all of the senior NNSA managers to review
the Columbia Accident Investigation Report for findings that could be
applied to NNSA. In addition, the Administrator chartered a task force
to perform an in-depth review of the cultural and organizational issues
described in the Columbia report and to make recommendations on how the
department could improve the effectiveness of mission support functions
to ensure the safe performance of high-risk mission work. NNSA
officials estimate that the task force report will be available in
March 2004.
The laboratories have also taken steps to address organizational
attitudes about mission support activities. At the Lawrence Livermore
laboratory, the director and senior management developed a list of
values for the laboratory that includes 10 items deemed to be critical
to success. One of the items is "simultaneous excellence in science and
technology, operations, and business practices." At the Los Alamos
laboratory, the director established priorities in 2003 to help guide
the laboratory's efforts. The priorities include safety and security,
mission, and business operations. The laboratory is also developing a
strategic plan that includes both mission and mission support goals and
objectives.
The University is also exploring other ways to improve management of
the two laboratories. In January 2004, the University Board of Regents
took steps to allow the University to form partnerships with outside
companies for the upcoming competition for the laboratory contracts.
The University's Vice President for Laboratory Management said that
outside partners with strong management and business experience could
strengthen its performance in the areas of business operations and
other mission support areas.
These actions are positive steps toward increasing the awareness of the
importance of mission support activities, but for several reasons
concerns remain about whether the laboratories will continue to ensure
that mission support activities are effectively performed. First,
although current senior management at both laboratories supports the
importance of having effective mission support activities, there has
been a long history of emphasizing mission over mission support.
Second, NNSA has also typically placed much more emphasis on mission
than mission support and has often failed to detect problems when they
existed. For example, the April 2003 DOE report on business operations
at the Los Alamos laboratory stated that the NNSA evaluation system in
place at Los Alamos failed to consider relationships between different
processes at the laboratory and therefore failed to detect overall
systemic problems. One of the report's recommendations was to ensure
that NNSA reviews of contractor performance capture cross-cutting
information in both mission and mission support areas to form a more
complete picture of performance.
Furthermore, although much work has been done to implement new mission
support requirements and improve management of mission support at the
two laboratories, considerable time may be needed to determine the
extent to which the actions taken will result in improved performance.
For example, some of the efforts, such as the longer-term efforts
needed to reduce deferred maintenance to industry standards by fiscal
year 2009, will take years to complete. In addition, the Los Alamos
laboratory continues to have problems with workers failing to comply
with nuclear safety procedures. For fiscal years 2001 through 2003, the
Los Alamos laboratory had filed 51 reports on nuclear safety incidents,
some resulting in exposures of workers to radiation. Efforts are
underway to improve performance in this area, but safety officials at
the laboratory acknowledge that some of the improvement efforts may
take months or years of sustained effort to complete.
The laboratories will also need to ensure that improvement efforts are
sustained and effective. NNSA officials, including the senior technical
safety advisor at the Los Alamos site office, noted they did not have a
high level of confidence in the laboratory's ability to sustain
improvements because the laboratory's track record in this regard has
not been good. For example, a March 2003 report on nuclear safety at
the Los Alamos laboratory analyzed 32 corrective actions between fiscal
years 1996 and 2003 and concluded that many of the improvement efforts
had not been sustained or followed up on, allowing many of the safety
violations to recur.[Footnote 18] NNSA officials, including the
assistant manager for business management, also noted that the
laboratory was reporting on when corrective actions had been
implemented rather than on their effectiveness. For example, in
December 2003, Los Alamos reported that it had completed 80 percent of
its improvement efforts in procurement but did not report on the
effectiveness of those efforts. Based on complaints from vendors and
others outside the laboratory, NNSA officials sampled procurement
records and found recurring problems. The NNSA officials said that they
had been in discussions with Los Alamos laboratory officials since
September 2003 in efforts to reach agreement on how to assess
improvement efforts for effectiveness, but as of December 2003, no
agreement had been reached.
Ensuring that NNSA's Oversight Is Effective:
NNSA's reliance on contractors to operate its facilities and carry out
its missions makes effective oversight of contractor activities crucial
to success. In the past, however, oversight of the laboratories'
mission support activities has been inadequate. Both the University and
NNSA had failed to ensure that the laboratories' mission support
activities were effective.
The University had in general taken a "hands off" approach to
overseeing the laboratories. For example, in its April 2003 report on
evaluating problems at the Los Alamos laboratory, NNSA stated that
prior to November 2002, the University's oversight of Los Alamos was
ineffective in the area of business processes. The report added that
the University was slow to respond to allegations of problems with
business practices, initially limiting its involvement to providing
assistance as requested by the laboratory director and not ensuring
that the laboratory director was taking sufficient steps to address the
problem.
NNSA oversight also was not adequate to identify and address the
critical shortcomings in management controls. Regarding the Los Alamos
laboratory, in May 2003, DOE's Office of Inspector General reported
that improvements were needed in NNSA's project management oversight
and control. This conclusion was based on the Inspector General's
review of a new facility that will be used to evaluate the effects of
aging on the nation's nuclear weapons stockpile.[Footnote 19] The
report stated that the project did not have a viable baseline and that
at least $57 million in cost increases had occurred, but NNSA oversight
was inadequate to identify the problem. Also, the April 2003 DOE report
on problems at the Los Alamos laboratory stated that NNSA's direct
federal oversight had been narrowly focused on specific performance
measures in the contract, rather than on overall effectiveness.
Weaknesses in NNSA oversight also occurred at the Lawrence Livermore
laboratory. For example, in a May 2003 report[Footnote 20] on a new
waste treatment facility at the laboratory, we concluded that a delay
in initiating storage and treatment operations at the new facility
occurred because NNSA managers took over a year to resolve
disagreements with the laboratory on technical issues affecting the
safe operation of the new building for temporarily storing wastes.
Providing clear requirements and ensuring that the contractor complies
with those standards in a timely manner is part of NNSA's oversight
responsibilities.
These past problems with oversight raise concerns about NNSA's proposed
change to its oversight approach. NNSA's August 2003 draft Line
Oversight and Contractors' Assurance System policy would rely more on
contractor oversight and self-assessment and less on NNSA's direct
oversight.[Footnote 21] The proposal would require a comprehensive
contractor assurance system, or system of management controls, to be in
place and would primarily rely upon these systems and controls to
ensure that its missions and activities are properly executed in an
effective, efficient, and safe manner. NNSA would use a risk-based,
graded approach to its oversight and tailor the extent of federal
oversight to the quality and completeness of the contractor's assurance
systems and to evidence of acceptable contractor performance. NNSA's
oversight functions would include review and analysis of contractor
performance data, direct observations of contractor work activities in
nuclear and other facilities, annual assessments of overall performance
under the contract, and certifications by the contractor or independent
reviewers that the major elements of risk associated with the work
performed are being adequately controlled. NNSA stated in its draft
policy and in public meetings before the Defense Nuclear Facilities
Safety Board that the department plans to phase in this new oversight
approach over the next few years.
Although we believe that the overall concept of a risk-based approach
to federal oversight is reasonable, concerns exist about whether NNSA
will be able to effectively carry out this approach while successfully
meeting its responsibility for safe and secure operations. For example,
considerable work will be needed to successfully implement a risk-based
approach to laboratory oversight. According to the Associate Director
for Operations at the Los Alamos laboratory, the laboratory's ability
to manage risk is at a beginning level of maturity. Other officials at
the Los Alamos laboratory, including officials from the Performance
Surety Division and the Quality Improvement Office, said that the
laboratory and NNSA have different perceptions of risks at the
laboratory and how to manage those risks. In addition, they said that
both the laboratory and NNSA have been reacting to problems after they
have come to light rather than managing risks to prevent problems from
occurring.
In addition to these concerns specific to the two laboratories, DOE and
others have raised broader concerns about the adequacy of oversight.
For example, in November 2003, DOE's Office of Inspector General
released its annual report on management challenges, including
oversight of contracts and project management as two of the three
internal control challenges facing the department.[Footnote 22] The
report stated that these challenges represent issues that, if not
addressed, may impede the department's ability to carry out its program
responsibilities and ensure the integrity of its operations. The
department also included program oversight of contractors as a
significant matter of concern in its performance and accountability
report for fiscal year 2003. Furthermore, the Defense Nuclear
Facilities Safety Board, in recent public meetings, has expressed
concerns about nuclear safety under the proposed NNSA contractor
assurance policy and said that NNSA should not delegate responsibility
for such an inherently high-risk area of operations.
Ensuring that Improvement Initiatives Follow Best Practices:
NNSA and the University have not ensured that the laboratories manage
major improvement initiatives using a best practices framework that
helps ensure successful implementation. For example, one aspect of
improving mission support activities at the Los Alamos laboratory has
involved a major upgrade of business systems including budgeting,
accounting, procurement, and property management. This business systems
improvement initiative is planned to take 18 months and be completed at
the end of June 2004. Unfortunately, laboratory officials have not
followed best practices in managing the improvement initiative,
increasing the risk that the initiative may not fully address existing
problems or be the most effective approach.
In previous work,[Footnote 23] we found that best practices by leading
organizations to sustain management improvement initiatives involved
using a systematic, results-oriented approach that incorporated a
rigorous measurement of progress. Such an approach typically included
the following elements: (1) define clear goals for the initiative, (2)
develop an implementation strategy that sets milestones and establishes
responsibility, (3) establish results-oriented outcome measures early
in the process to gauge progress toward the goals, and (4) use results-
oriented data to evaluate the effectiveness of the initiative and to
make additional changes where warranted.
For its business systems improvement initiative, the Los Alamos
laboratory established an implementation strategy that set milestones
and assigned responsibility for carrying out the strategy. For example,
the business process improvement plan included over 600 required
actions, each of which had a time frame for completion and a laboratory
employee responsible for the action. The laboratory is tracking each of
the actions to ensure that they are completed.
While the Los Alamos laboratory had an implementation strategy for its
business systems improvement initiative, it implemented those actions
largely without clearly defined goals, results-oriented measures, or
results-oriented data to evaluate the effectiveness of its actions.
* Clear goals not defined. Although the Los Alamos laboratory had a
strategy for business improvement that included general goals, it did
not define the goals in measurable terms. The laboratory's primary goal
for 2003 was to reduce the risks associated with internal control
vulnerabilities in its business systems. This general goal does not
provide a measurable end point; it does not indicate how much risk
reduction is enough or how changes in risk could be measured. Nor does
the even more general objective of restoring trust in the laboratory's
business systems, mentioned by some Los Alamos officials, provide a
measurable end point. While addressing internal control problems is
important, it does not by itself indicate that improvements are
sufficient or effective.
* Results-oriented outcome measures not established. The laboratory did
not establish results-oriented outcome measures for its business
improvement initiative. Instead, the laboratory generally focused on
measuring the progress of implementing its improvement actions, such as
the percentage of improvements that have been implemented. Such
measurements, however, do not provide an indication of progress toward
the overall goal of reducing the risk of fraud, waste, and abuse.
Laboratory officials told us that instead of developing such measures
early in the business improvement initiative, their strategy is to
define measurable performance goals after the many actions associated
with the business improvement initiative are in place.
* Results-oriented data not used to evaluate effectiveness. The
laboratory did not have the results-oriented outcome data needed to
evaluate the effectiveness of its business improvement initiative.
Again, laboratory officials told us that after the improvement actions
are in place, they plan to define and generate results-oriented data to
correspond with measurable performance goals. In addition to the lack
of results-oriented outcome data, the laboratory also lacks the
information necessary to determine if these improvement efforts are
cost-effective. The laboratory has only partial information on the cost
of the improvement initiative. The laboratory's Associate Director for
Administration told us that the laboratory has not focused on the costs
of the current business improvements. He added that the laboratory will
consider costs once the new systems are in place and decisions must be
made about balancing the cost of business activities against the risks
of removing some internal control activities.
Because the Los Alamos laboratory lacked several elements of a best
practices approach to managing improvement initiatives, the laboratory
did not have a sufficient basis from which to objectively review the
results of the improvement initiative, assess the reasonableness of
costs incurred, or take further corrective actions if necessary to
achieve the overall goals of the initiative. Laboratory officials
explained that they had given immediate priority to fixing business
system problems rather than measuring and sustaining improved business
results. Furthermore, the Associate Director for Administration
concluded that good performance measures would take considerable time
to develop and that implementing corrective actions was a higher
priority. However, by waiting to focus on results and costs later, the
laboratory increases its risk that the initiative may not fully address
existing problems or be the most cost-effective approach to reducing
its internal control vulnerabilities to appropriate levels.
Laboratory officials said that they generally follow an organized
process for implementing improvement initiatives that includes defining
the tasks to be accomplished, creating a schedule with milestones, and
assigning responsibility for the actions. However, such a process does
not include all the elements that we have identified as necessary for a
best practices approach. Neither the University nor NNSA was
influential in ensuring that the laboratory followed best practices in
managing the business system improvement initiative, even after the
department had issued guidance on managing improvement initiatives. In
October 2003, DOE issued Notice 125.1, Managing Critical Management
Improvement Initiatives, which describes best practices for managing
improvement initiatives and requires that those practices be followed
by NNSA. However, this notice does not apply to DOE's contractors, and
NNSA has not incorporated similar requirements into NNSA's contracts
with the University to manage the Los Alamos and Lawrence Livermore
laboratories.
Conclusions:
Effectively accomplishing the mission of conducting world-class
scientific work at the Los Alamos and Lawrence Livermore laboratories
also requires the laboratories to maintain good business practices;
accountability for mission support activities; and safeguards against
fraud, waste, abuse, and mismanagement. Sufficient emphasis on mission
support activities has been lacking, especially at the Los Alamos
laboratory, and achieving and sustaining effective performance in
mission support will require strong leadership and commitment. Efforts
to improve performance in mission support activities are still underway
at the laboratories, and it may take considerable time to determine if
the efforts are effective. Managing these efforts using best practices
will help ensure that they succeed.
Keeping these improvements in place over the long term also requires an
effective process for assessing contractor performance on mission
support activities. We continue to have concerns about NNSA's oversight
approach. Under its proposed risk-based approach to federal oversight,
NNSA would determine the risks associated with a given operation or
function, evaluate how good the contractor assurance system is in that
area, and also factor in past contractor performance. NNSA would take
these factors into consideration to determine whether it could reduce
federal oversight of an operation and rely more on the contractor's
assurance that the risk is being adequately addressed and controlled.
In our view, such autonomy for the laboratories is inadvisable this
soon into the process of recovery from a string of embarrassing
revelations. Regardless of whether the University of California retains
the contracts when they are competed in 2005 or another organization is
selected to operate one or both of the laboratories, until the
laboratories have demonstrated the maturity and effectiveness of
contractor assurance systems and the adequacy of the contractor's
oversight has been validated, NNSA needs to maintain sufficient
oversight of mission support activities to fulfill its responsibilities
independently.
Recommendations for Executive Action:
We recommend that the Secretary of Energy direct the Administrator of
NNSA to:
* ensure through contract and other management mechanisms that the
University of California and any future contractor managing Los Alamos
and Lawrence Livermore National Laboratories provide leadership,
resources, and oversight to ensure effective mission support
activities, including evaluating the impact of improvement actions on
performance;
* ensure that NNSA performance assessments at the laboratories include
evaluations of the adequacy of leadership, resources, and internal
controls associated with mission support activities;
* ensure that as NNSA implements its proposed oversight and contractor
assurance policy at Los Alamos and Lawrence Livermore National
Laboratories, NNSA retains sufficient independent federal oversight of
mission support activities to fulfill its responsibilities associated
with protecting public resources and safety; and:
* include in its contract with the University of California and any
future contractor at Los Alamos and Lawrence Livermore National
Laboratories a requirement that major improvement initiatives be
managed consistent with the best practices of high-performing
organizations, as defined in DOE Notice 125.1.
Agency Comments:
We provided a draft of this report to NNSA and the University of
California for their review and comment. The University provided its
comments through NNSA. In written comments, NNSA's Associate
Administrator for Management and Administration generally agreed with
the accuracy of the report and acknowledged that both NNSA and the
University face challenges in improving mission support activities at
the two laboratories. NNSA also cited actions taken or planned that it
said met the intent of our recommendations.
However, regarding the report's accuracy, NNSA said our report
substantially understates the extent of progress made in correcting the
laboratories' mission support problems. We believe that we have
accurately described the progress made in implementing actions aimed at
improving mission support. Even though the University has made progress
in implementing corrective actions and new requirements, the extent to
which these actions have resulted in improvements in mission support
performance at the laboratories is still unclear.
In an attachment to the letter, NNSA raised a concern about our
discussion of its efforts to oversee the laboratories and our
recommendation concerning NNSA's proposed risk-based approach to
laboratory oversight. NNSA disagreed with our reservations about its
proposal to rely more on a contractor's system of management controls
and less on NNSA's own independent oversight. NNSA acknowledged that
there have been problems with its oversight in the past but believes
that its proposed risk-based approach will be successfully implemented,
resulting in improved contractor oversight. Therefore, NNSA said that
our recommendation to ensure that it retains sufficient independent
oversight of the laboratories' mission support activities was not
necessary. However, as we discussed in our report, a risk-based
approach to federal oversight appears reasonable in concept, but the
University of California has not demonstrated that its contractor
assurance systems can be relied on to prevent or detect fraud, waste,
abuse, or mismanagement. And, in the past, NNSA has not been effective
at detecting these weaknesses. Until improved performance in these
areas has been clearly demonstrated, we continue to be concerned about
whether NNSA can effectively implement a risk-based approach to
contractor oversight. That is why we are recommending that NNSA retain
sufficient independent oversight of mission support activities to
ensure that those activities are safe and effective.
The attachment to the letter also discussed or referred to the report's
other recommendations. Regarding our recommendation that NNSA's
performance assessments at the laboratories include an evaluation of
the adequacy of leadership, resources, and internal controls associated
with mission support activities, NNSA said that the performance
assessment process it began using in fiscal year 2003 already includes
such an evaluation, so this recommendation is no longer required. For
fiscal year 2003, the "critical few" performance measures used as a
basis for evaluation of contractor performance did include maintaining
secure, safe, environmentally sound, effective, and efficient
operations and infrastructure in support of mission objectives.
However, we do not believe that NNSA's assessment of contractor
performance on this measure is equivalent to evaluating the adequacy of
leadership, resources, and internal controls associated with mission
support activities. Therefore, we continue to believe that such an
evaluation is an important part of NNSA's oversight of contractor
performance and that the recommendation is warranted.
Regarding our recommendations that NNSA ensure that any contractors
operating the laboratories (1) provide the leadership, resources, and
oversight to ensure effective mission support activities and (2) manage
improvement initiatives consistent with best practices, NNSA was silent
on the usefulness of the recommendations, but stated that the
University is committed both to providing the leadership, resources,
and oversight to ensure that mission support activities are conducted
effectively and to ensuring that its improvement efforts continue to
achieve the desired results. We believe that the oversight activities
inherent in these recommendations are an important part of improving
the management of mission support at the laboratories.
NNSA also provided technical comments, which we have incorporated as
appropriate. NNSA's written comments on our draft report are included
in appendix II.
We conducted our review from May 2003 through February 2004, in
accordance with generally accepted government auditing standards.
Appendix I provides details on our scope and methodology.
As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after the date of this letter. At that time, we will send copies to the
Secretary of Energy and to the University of California Office of the
President. We will also make copies available to others on request. In
addition, the report will be available at no charge on the GAO Web
site at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions on this report, please call me
at (202) 512-3841. Other staff contributing to this report are listed
in appendix III.
Robin M. Nazzaro
Director, Natural Resources and Environment:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
We addressed three of the five problem areas NNSA identified when it
extended the laboratory contracts with the University of California in
January 2001. NNSA had identified problems with management
accountability; safeguards and security management; facility safety,
including nuclear facility operations; critical skills, knowledge, and
technical capabilities; and project management. Based on discussions
with committee staff, we reviewed three of these initiatives--
management accountability, including steps taken by the University to
strengthen its oversight of the two laboratories; facility safety,
including nuclear safety and facilities management; and project
management. The other two areas NNSA identified--safeguards and
security management and critical employee skills--were outside the
scope of our review. These topics are the subject of other GAO
engagements.
To identify the status of actions taken by NNSA and the University of
California to address the mission support problems that were
highlighted when NNSA decided to extend the contracts for the Los
Alamos and Lawrence Livermore National Laboratories in January 2001, we
reviewed and analyzed prior GAO reports and testimonies, reports from
the Inspector General, and other reports in order to determine the
types of problems identified in the past. In addition, we reviewed and
analyzed documentation on the two contracts, including the annual
performance measures and NNSA's annual evaluations of contractor
performance. We reviewed DOE orders and other agencywide requirements
that had been incorporated into the contracts, as well as the
documentation provided by the laboratories that demonstrated compliance
with these requirements. We interviewed officials in the University of
California Office of the President, Laboratory Administration Office,
to understand the contractor's perspective and management role. In
addition, we interviewed officials at the two laboratories and the NNSA
site offices to determine actions they had taken or were taking to
address identified problem areas. We also reviewed documentation
obtained from DOE's Office of Environment, Safety and Health regarding
nuclear safety violations and similar problems. In addition, we viewed
public meetings of the Defense Nuclear Facilities Safety Board (DNFSB),
an independent oversight board charged with providing safety oversight
of the nuclear weapons complex, and interviewed a DNFSB official at the
Los Alamos National Laboratory to obtain DNFSB views on the progress
made by Los Alamos in the area of nuclear safety. We also interviewed
officials from DOE's Office of Engineering and Construction Management
regarding project management, the Office of Price-Anderson Enforcement
regarding nuclear safety, and the Office of Environmental Management
regarding environmental cleanup. Lastly, we interviewed officials with
the Department of Energy Inspector General at the Los Alamos and
Lawrence Livermore National Laboratories and in Washington, D.C., to
obtain additional information on actions taken to address problems and
the progress that has been made.
To identify the status of the actions taken to address additional
mission support problems that have emerged or become more significant
since 2001, we took several steps. To obtain information on the
problems with business operations at Los Alamos, we reviewed and
analyzed reports by DOE's Office of Inspector General and external
reviews done by Price-Waterhouse Coopers, Ernst and Young, and others.
We also reviewed and analyzed the April 2003 report from the Deputy
Secretary of Energy and the NNSA Administrator on the business problems
and Los Alamos and the recommendations to the Secretary of Energy. In
addition, we interviewed officials with the Los Alamos laboratory, the
NNSA Los Alamos site office, and the University of California
Laboratory Administration Office on the status of corrective actions,
and we reviewed documentation and reports they provided. To obtain
information on the continuing problems with emergency management at the
Lawrence Livermore laboratory, we reviewed reports of DOE's Office of
Independent Oversight and Performance Assurance, the annual performance
measures in the contract for the Lawrence Livermore laboratory, and
NNSA's annual evaluations of contractor performance. In addition, we
interviewed NNSA officials at the Lawrence Livermore site office and
reviewed documents provided by them. We also reviewed the Fiscal Year
2004 Energy and Water Development Appropriations Act and corresponding
House of Representatives and Conference Reports to understand the
requirement to compete DOE contracts that had been awarded more than 50
years ago without competition.
To determine the remaining challenges, if any, that NNSA and the
University face in sustaining improvements in mission support
activities, we reviewed and analyzed Office of Management and Budget
Circular A-123, Management Accountability and Control; GAO's Standards
for Internal Control in the Federal Government; and DOE Office of
Inspector General and Performance and Accountability reports. We also
reviewed and analyzed University, laboratory, and independent reports
obtained during site visits and during interviews with officials to
identify other areas of concern and any potential barriers to
implementing and sustaining the improvement efforts. We interviewed
officials with the University Laboratory Administration Office, the Los
Alamos and Lawrence Livermore laboratories, and the NNSA site offices
to obtain their views on remaining challenges the laboratories face and
the need for improved oversight of the laboratories. In particular, we
discussed DOE's oversight policies, NNSA's proposed oversight policies,
and challenges to improving oversight. We also reviewed documents
relevant to oversight issues, such as NNSA's draft policy letter on
contractor assurance and oversight and the investigative report on the
space shuttle Columbia accident, which was prepared for the National
Aeronautics and Space Administration. Finally, for additional insight
into remaining challenges, we analyzed the results of public meetings
on DOE and NNSA oversight of nuclear safety held by the Defense Nuclear
Facilities Safety Board.
We conducted our review from May 2003 through February 2004 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Comments from the Department of Energy:
Department of Energy:
National Nuclear Security Administration
Washington, DC 20585:
FEB 23 1004:
Ms. Robin M. Nazzaro
Director:
Natural Resources and Environment
General Accounting Office
Washington, D.C. 20548:
Dear Ms. Nazzaro:
The National Nuclear Security Administration (NNSA) appreciates the
opportunity to have reviewed the General Accounting Office's (GAO)
draft report, "DEPARTMENT OF ENERGY: Mission Support Challenges Remain
at Los Alamos and Lawrence Livermore National Laboratories." We
understand that GAO was asked to describe the actions taken to address
mission support problems identified in 2001, when NNSA last extended
the University of California's contracts, as well as problems that have
subsequently emerged. Additionally, you were asked to assess the major
challenges that NNSA and the University face in sustaining mission
support improvements.
NNSA generally agrees with the report and acknowledges that there are
challenges facing NNSA and the University of California. We appreciate
GAO's view that substantial progress has been made in correcting
identified deficiencies in mission support areas. NNSA believes that
there has been substantially more progress achieved than GAO has noted
in their draft report. We are committed to seeking out and applying
best practices to our business operations just as others use our
laboratories as examples of best practices for a high-performing
scientific, technical, and engineering organization.
The enclosures that I am providing include (1) comments from the
University of California to the Administrator supporting NNSA's efforts
to implement a robust Line Oversight/Contractor Assurance System, and,
(2) detailed comments related to factual corrections and/or clarity to
the draft report.
Should you have any questions, please contact Mr. Richard M. Speidel,
Director, Policy and Internal Controls Management. He may be contacted
at 202-586-5009.
Sincerely,
Signed by:
Michael C. Kane
Associate Administrator for Management and Administration:
Enclosures:
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Robin M. Nazzaro, (202) 512-3841 William R. Swick, (206) 287-4800:
Acknowledgments:
In addition to the individuals named above, Carole Blackwell, Doreen
Feldman, Terry Hanford, Jonathan McMurray, Jill Peterson, Robert
Sanchez, and Stan Stenersen made key contributions to this report.
(360348):
FOOTNOTES
[1] For more information on the National Ignition Facility, see U.S.
General Accounting Office, National Ignition Facility: Management and
Oversight Failures Caused Major Cost Overruns and Schedule Delays, GAO/
RCED-00-271 (Washington, D.C.: Aug. 8, 2000).
[2] NNSA was created in 2000 as a separately organized agency within
DOE. NNSA's mission includes maintaining and enhancing the safety,
reliability, and performance of the U.S. nuclear weapons stockpile;
promoting international nuclear safety and nonproliferation; and
supporting U.S. leadership in science and technology.
[3] The mission support problem areas we addressed included project
management, facilities management, and nuclear safety management. Two
other areas of concern identified in 2001 were safeguards and security
management and human capital management to ensure that critical
employee skills are maintained. To avoid duplicating other GAO
engagements, we did not include these other two areas of concern in the
scope of this engagement.
[4] NNSA's third research laboratory, the Sandia National Laboratories
in New Mexico and California, has been operated by for-profit
contractors since its inception. AT&T operated the Sandia laboratory
until the contract was opened to competition in 1993 and awarded to the
Sandia Corporation, the current contractor.
[5] The University uses the fee earned to cover costs under the
contract that are not allowable or reimbursed by NNSA and to fund
University of California-directed research and development projects
that are supportive of laboratory mission work.
[6] The National Research Council has reviewed project management in
DOE and has reported that project management needs to be a core
competency in DOE as it strives to achieve its mission. In its 2002
assessment of DOE's project management, the Council reported that
implementation of DOE Order 413.3 has increased the level of
consistency in project management practices throughout the department.
See National Research Council, Improving Project Management in the
Department of Energy; Progress in Improving Project Management at the
Department of Energy--2001 Assessment; and Progress in Improving
Project Management at the Department of Energy--2002 Assessment.
[7] Amendments to DOE's Nuclear Safety Management regulations, 10
C.F.R. part 830, were issued as a final rule January 10, 2001 (66 Fed.
Reg. 1810). The amendments included a requirement that contractors
responsible for hazard category 1, 2, or 3 nuclear facilities present a
safety basis to the department for its approval by April 10, 2003.
[8] Under section 234A of the Atomic Energy Act of 1954, as amended, 42
U.S.C. 2282a, DOE has the authority to impose civil penalties on
contractors for violations of nuclear safety requirements. However,
under section 234A(d), certain nonprofit contractors (including the
University of California) are specifically exempted from paying such
penalties. The Congress has proposed legislation that would remove this
exemption.
[9] NNSA had specifically required that this position be created.
[10] One oversight group, the National Security Laboratories Board of
Directors, will report directly to the University's Board of Regents
and will bring outside expertise to the University. It will have the
authority to approve major policies and organizational structures,
monitor performance, and recommend to the regents the hiring and firing
of laboratory directors. The University also established a Laboratory
Management Council that will have responsibility to develop, issue, and
implement appropriate corporate policy, as well as advise the vice
president for laboratory management on numerous issues such as
effectiveness of internal controls and performance improvements.
[11] The Lawrence Livermore laboratory's approach to facilities
maintenance was cited as an example of a program that incorporated
"promising practices" in a September 1999 GAO report. See U.S. General
Accounting Office, Military Infrastructure: Real Property Management
Needs Improvement, GAO/NSIAD-99-100 (Washington, D.C.: Sept. 7, 1999).
[12] U.S. Department of Energy, Report by the Deputy Secretary of
Energy and the Acting Administrator of the National Nuclear Security
Administration on the future relationship between Los Alamos National
Laboratory and the University of California (Washington, D.C.: Apr. 26,
2003).
[13] The rating scale used for evaluations of contractor performance
includes five categories: unsatisfactory, marginal, good or
satisfactory, excellent, and outstanding.
[14] Energy and Water Development Appropriations Act, 2004, Pub. L. No.
108-137 (2003). This provision applies to both the Los Alamos and
Lawrence Livermore laboratories. The provision also applies to several
other laboratories, including the Lawrence Berkeley National
Laboratory, operated by the University of California for DOE's Office
of Science. The act required that the Secretary publish a notice in the
Federal Register and submit written notification to the House and
Senate Committees on Appropriations within 60 days of enactment. The
House Committee on Appropriations report accompanying the
appropriations act states that the committee included this provision
because of ongoing concerns that the department continued to extend
without competition contracts for managing and operating its sites,
some of which had never been competitively awarded in over 60 years.
H.R. Rep. No. 108-212, at 189-190 (2003).
[15] U.S. General Accounting Office, Internal Control: Standards for
Internal Control in the Federal Government, GAO/AIMD-00-21.3.1
(Washington, D.C.: November 1999). The term "internal control" in this
document is synonymous with the term "management control" as used in
Circular A-123.
[16] U.S. Department of Energy, Report by the Deputy Secretary of
Energy and the Acting Administrator of the National Nuclear Security
Administration on the future relationship between Los Alamos National
Laboratory and the University of California (Washington, D.C.: Apr. 26,
2003).
[17] Columbia Accident Investigation Board, Report Volume I
(Washington, D.C.: August 2003).
[18] Department of Energy, Lack of Sustainable Corrective Actions, Los
Alamos National Laboratory, NTS-LANL-2003-006 (Washington, D.C.: Mar.
26, 2003).
[19] Department of Energy, Audit Report on the Dual Axis Radiographic
Hydrodynamic Test Facility, DOE/IG-0599 (Washington, D.C.: May 22,
2003).
[20] U.S. General Accounting Office, Radioactive Waste: DOE Has Acted
to Address Delay in New Facility at Livermore Laboratory, but
Challenges Remain, GAO-03-558 (Washington, D.C.: May 15, 2003).
[21] Historically, NNSA has depended upon a combination of contractor
controls and direct federal oversight to help manage the risks
associated with the work conducted at its laboratories. However, there
are diverse views on the proper balance between federal oversight and
reliance on contractors' systems of internal controls. Since 1990, GAO
and others have criticized NNSA for inadequate federal oversight and
failure to hold contractors accountable. In contrast, a 1995 Secretary
of Energy Advisory Board task force report on alternative futures for
the national laboratories criticized DOE for excessive oversight and
micromanagement of contractors' activities.
[22] Department of Energy, Management Challenges at the Department of
Energy, DOE/IG-0626 (Washington, D.C.: Nov. 12, 2003).
[23] U.S. General Accounting Office, Contract Reform: DOE Has Made
Progress, but Actions Needed to Ensure Initiatives Have Improved
Results, GAO-02-798 (Washington, D.C.: Sept. 13, 2002).
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