Stand-Down of Los Alamos National Laboratory
Total Costs Uncertain; Almost All Mission-Critical Programs Were Affected but Have Recovered Gao ID: GAO-06-83 November 18, 2005On July 16, 2004, the director of the Los Alamos National Laboratory (LANL) declared a suspension, or stand-down, of laboratory operations to address safety and security concerns. LANL is one of three laboratories that conduct nuclear weapons research for the National Nuclear Security Administration (NNSA) within the Department of Energy (DOE). In deciding to stand down operations, LANL's director consulted with senior officials from NNSA and the University of California, the management and operating contractor for the laboratory. GAO was asked to assess (1) the extent to which LANL's and NNSA's estimates capture the total cost of the stand-down, (2) the effect of the stand-down on LANL's major research programs, and (3) whether there was a reasonable basis for NNSA's decisions regarding the reimbursement of stand-down costs to the University of California.
Neither LANL's $121 million estimate nor NNSA's $370 million estimate, which it considers an upper bound, accurately captures the total cost of the LANL stand-down. LANL did not establish separate stand-down activity codes to track the actual time spent on stand-down activities, such as safety reviews and training. As a result, neither NNSA nor GAO can calculate actual stand-down costs. LANL's estimate used a formula-based approach to estimate this time and did not include most administrative and other support costs associated with stand-down activities. While both LANL's and NNSA's estimates include labor and other direct costs, NNSA's estimate also includes the costs of administrative and other activities that supported stood-down activities. NNSA officials said that while their estimate fully covers stand-down activities, it overstates actual stand-down costs because it does not take into account the sequenced resumption of activities. As a result of the stand-down, many mission-critical programs had to extend key milestones. In particular, the stand-down affected LANL's Nuclear Weapons Program, including the refurbishment of three nuclear weapons to ensure their reliability, because many of these activities were stood down longer. While LANL's Nuclear Weapons Program has changed only one major delivery date, it assumed additional risk of achieving its other major delivery dates by reducing the time available for scientists to analyze test data and to make design changes or run additional tests if initial tests yield unexpected results. However, LANL has not substantially reduced the scope of any of its efforts because of the stand-down and almost all programs had recovered from stand-down delays by the end of fiscal year 2005, according to LANL and NNSA program managers. LANL program managers said that the results of tests performed to date have confirmed predictive models, and thus far have not indicated that nuclear weapons programs' schedules will bear additional risk. The basis for NNSA's determination that almost all of the stand-down costs were allowable appears to be reasonable because (1) NNSA's contract for LANL authorizes stand-downs to address serious safety and security concerns, (2) NNSA found that almost all stand-down costs were consistent with the allowability and safety provisions of the contract, (3) NNSA personnel were substantially involved in stand-down and restart activities, and (4) NNSA concluded that the duration of the stand-down was reasonable. However, NNSA has not fully ensured that LANL will be held accountable for safe and secure future operations. Specifically, recent DOE management and operating contracts have given contractors the opportunity to earn extra years to their contract terms, primarily by achieving an overall rating of outstanding performance. For the new LANL contract to be awarded in December 2005, however, the contractor could earn additional years to the contract term by achieving a lower performance score.
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-06-83, Stand-Down of Los Alamos National Laboratory: Total Costs Uncertain; Almost All Mission-Critical Programs Were Affected but Have Recovered
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Recovered' which was released on December 19, 2005.
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Report to the Chairman, Committee on Energy and Commerce, House of
Representatives:
November 2005:
Stand-Down Of Los Alamos National Laboratory:
Total Costs Uncertain; Almost All Mission-Critical Programs Were
Affected but Have Recovered:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-83]
GAO Highlights:
Highlights of GAO-06-83, a report to the Chairman, Committee on Energy
and Commerce, House of Representatives:
Why GAO Did This Study:
On July 16, 2004, the director of the Los Alamos National Laboratory
(LANL) declared a suspension, or stand-down, of laboratory operations
to address safety and security concerns. LANL is one of three
laboratories that conduct nuclear weapons research for the National
Nuclear Security Administration (NNSA) within the Department of Energy
(DOE). In deciding to stand down operations, LANL‘s director consulted
with senior officials from NNSA and the University of California, the
management and operating contractor for the laboratory. GAO was asked
to assess (1) the extent to which LANL‘s and NNSA‘s estimates capture
the total cost of the stand-down, (2) the effect of the stand-down on
LANL‘s major research programs, and (3) whether there was a reasonable
basis for NNSA‘s decisions regarding the reimbursement of stand-down
costs to the University of California.
What GAO Found:
Neither LANL‘s $121 million estimate nor NNSA‘s $370 million estimate,
which it considers an upper bound, accurately captures the total cost
of the LANL stand-down. LANL did not establish separate stand-down
activity codes to track the actual time spent on stand-down activities,
such as safety reviews and training. As a result, neither NNSA nor GAO
can calculate actual stand-down costs. LANL‘s estimate used a formula-
based approach to estimate this time and did not include most
administrative and other support costs associated with stand-down
activities. While both LANL‘s and NNSA‘s estimates include labor and
other direct costs, NNSA‘s estimate also includes the costs of
administrative and other activities that supported stood-down
activities. NNSA officials said that while their estimate fully covers
stand-down activities, it overstates actual stand-down costs because it
does not take into account the sequenced resumption of activities.
As a result of the stand-down, many mission-critical programs had to
extend key milestones. In particular, the stand-down affected LANL‘s
Nuclear Weapons Program, including the refurbishment of three nuclear
weapons to ensure their reliability, because many of these activities
were stood down longer. While LANL‘s Nuclear Weapons Program has
changed only one major delivery date, it assumed additional risk of
achieving its other major delivery dates by reducing the time available
for scientists to analyze test data and to make design changes or run
additional tests if initial tests yield unexpected results. However,
LANL has not substantially reduced the scope of any of its efforts
because of the stand-down and almost all programs had recovered from
stand-down delays by the end of fiscal year 2005, according to LANL and
NNSA program managers. LANL program managers said that the results of
tests performed to date have confirmed predictive models, and thus far
have not indicated that nuclear weapons programs‘ schedules will bear
additional risk.
The basis for NNSA‘s determination that almost all of the stand-down
costs were allowable appears to be reasonable because (1) NNSA‘s
contract for LANL authorizes stand-downs to address serious safety and
security concerns, (2) NNSA found that almost all stand-down costs were
consistent with the allowability and safety provisions of the contract,
(3) NNSA personnel were substantially involved in stand-down and
restart activities, and (4) NNSA concluded that the duration of the
stand-down was reasonable. However, NNSA has not fully ensured that
LANL will be held accountable for safe and secure future operations.
Specifically, recent DOE management and operating contracts have given
contractors the opportunity to earn extra years to their contract
terms, primarily by achieving an overall rating of outstanding
performance. For the new LANL contract to be awarded in December 2005,
however, the contractor could earn additional years to the contract
term by achieving a lower performance score.
What GAO Recommends:
GAO is recommending that DOE take actions to improve its oversight of
management and operating contractors by requiring that contractors (1)
track the costs of future stand-downs on an actual cost basis and (2)
achieve an overall rating of outstanding as a basis to be awarded extra
years to their contract terms. In commenting on the draft report, DOE
generally concurred with GAO‘s recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-06-83.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gene Aloise at (202) 512-
3841 or aloisee@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Neither LANL's Estimate Nor NNSA's Upper Bound Accurately Captures the
Total Cost of the LANL Stand-Down:
Although the Stand-Down Delayed Many Mission-Critical Programs, Almost
All Have Recovered According to LANL and NNSA Program Managers:
The Basis for NNSA's Decision to Reimburse Almost All Stand-Down Costs
Appears to Be Reasonable; Opportunities Exist to Strengthen NNSA's
Oversight of LANL Management:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Scope and Methodology:
Appendixes:
Appendix I: The Estimated Cost of the DOE-Wide Stand-Down for
Accountable Classified Removable Electronic Media:
Appendix II: Chronology of Key Stand-Down Events:
Appendix III: The Stand-Down's Effects on Nuclear Weapons Activities at
LANL and Other NNSA Facilities:
Appendix IV: LANL's Technical Area-18:
Appendix V: The Stand-Down's Effects on LANL's Threat Reduction
Activities:
Appendix VI: Comments from the Department of Energy:
Tables:
Table 1: Example of Results of LANL's Cost-Estimating Methodology Using
a Hypothetical Cost Center with Average Daily Labor Costs of $10,000:
Table 2: Example of Results of NNSA's Cost Estimating Methodology Using
a Hypothetical Cost Center with Average Daily Labor Costs of $10,000:
Table 3: Comparison of the Impact of LANL's and NNSA's Treatment of
Support Costs on Cost Estimates:
Table 4: The Stand-Down's Effects on LANL's Nuclear Weapons Activities:
Table 5: The LANL Stand-Down's Effects on Related Nuclear Weapons
Activities at Other NNSA Facilities:
Table 6: The LANL Stand-Down's Effects on Threat Reduction Activities:
Table 7: Safety Incidents Preceding the LANL Director's Stand-Down
Decision:
Table 8: Estimated Cost of the DOE-Wide Stand-Down for Accountable
CREM:
Figures:
Figure 1: Percent of LANL Activities Approved to Resume Normal
Operations by Risk Level, July 2004 through May 2005
Figure 2: The DARHT Facility at LANL:
Abbreviations:
ALT: alternative:
CD ROM: compact disk, read-only memory:
CFO: chief financial officer:
CREM: classified removable electronic media:
DARHT: Dual-Axis Radiographic Hydrodynamic Test (Facility):
DBT: design basis threat:
DOD: Department of Defense:
DOE: Department of Energy:
FPU: first production unit:
GPS: global positioning system:
IAEA: International Atomic Energy Agency:
LANL: Los Alamos National Laboratory:
LASO: Los Alamos Site Office:
LEP: life extension program:
NASA: National Aeronautics and Space Administration:
NNSA: National Nuclear Security Administration:
Pu: plutonium:
QMU: quantification of margins and uncertainties:
SS-21: Seamless Safety for the 21st Century:
TA: Technical Area:
Letter November 18, 2005:
The Honorable Joe Barton:
Chairman, Committee on Energy and Commerce:
House of Representatives:
Dear Mr. Chairman:
On July 16, 2004, the director of the Los Alamos National Laboratory
(LANL), one of the National Nuclear Security Administration's (NNSA)
three nuclear weapons laboratories,[Footnote 1] declared a suspension,
or stand-down, of laboratory operations to address immediate safety and
security concerns, as well as a negative trend in laboratory safety and
security performance. In making this decision, LANL's director
consulted with senior officials from NNSA and the University of
California, the management and operating contractor for the laboratory.
The LANL director suspended all activities except those specifically
designated as critical, citing a pattern of safety and security
incidents that occurred over the course of a year. Specifically, in the
weeks prior to the stand-down, an undergraduate student was partially
blinded in a laser accident, and two classified computer disks were
reported missing.[Footnote 2] In both cases, laboratory employees
disregarded established procedures and then attempted to cover up the
incident, according to LANL officials. (See app. II for a chronology of
key events that occurred prior to and during the stand-down.)
LANL's primary mission is to maintain the nation's nuclear weapons
stockpile without nuclear testing. To accomplish this mission, LANL
scientists are involved in numerous research, evaluation, and computer
simulation programs to assess the long-term reliability of several
nuclear weapons systems. LANL also serves as a focal point for
nonproliferation and threat reduction activities, as well as chemical,
biological, and physics research. In addition, LANL performs specific
research projects for other programs within the Department of Energy
(DOE) and for such federal agencies as the Department of Defense (DOD),
the Department of Homeland Security, the National Aeronautics and Space
Administration, and the National Institutes of Health.
In the days following the stand-down order, laboratory management and
members of NNSA's Los Alamos Site Office, which has oversight
responsibility for LANL, assigned a risk level to each of 384
laboratory activities. LANL designated (1) as risk level 1, or low
risk, 341 activities (89 percent), including administrative functions
and unclassified computer work; (2) as risk level 2, 25 moderately
hazardous activities, such as light laboratory work and routine
industrial activities; and (3) as risk level 3, the most hazardous 18
activities, such as those involving the use of nuclear materials or
classified removable electronic media (CREM)--e.g. computer disks and
removable hard drives.[Footnote 3] Irrespective of the risk level
assigned to activities under this process, any activities that LANL and
NNSA management identified as either mission-critical or necessary for
the safe and secure operation of the laboratory received a risk level 0
exception that enabled them to continue with special NNSA oversight.
All risk level 0 activities were required to go through resumption
activities appropriate to their risk levels.
LANL and NNSA also developed processes for reviewing the status of
activities at each risk level and criteria for resuming each activity
once senior management agreed the activity had fulfilled safety and
security requirements. Almost all risk level 1 activities had resumed
by the middle of August 2004; almost all risk level 2 activities
resumed between the end of August and November 2004; and almost all
risk level 3 activities resumed between October 2004 and February 2005.
Some high-hazard, risk level 0 activities that operated throughout the
stand-down, such as explosive tests in support of mission-critical
nuclear weapons programs, were not approved for full resumption without
special oversight until May 2005. LANL teams identified over 3,400
individual safety and security concerns, including over 400 that needed
to be addressed prior to activities' resumptions. In addition, LANL
officials undertook a laboratory-wide inventory of all CREM holdings
and told us that by March 2005 they had destroyed about 15,000 pieces
and had consolidated the remaining 20,000 pieces in 20 centralized CREM
storage vaults, staffed by a limited number of security specialists.
During the stand-down, LANL's contractor--the University of California-
-continued to receive funding from NNSA programs and other work
sponsors. Under its current management and operating contract, NNSA
reimburses University of California for all allowable, allocable, and
reasonable costs that LANL incurs. Costs incurred during the stand-down
would be allowable for reimbursement to the extent that they meet these
criteria. On July 30, 2004, the manager of NNSA's Los Alamos Site
Office, who is NNSA's senior contracting officer for LANL, directed
LANL to track the costs of the stand-down. In response, LANL's chief
financial officer (CFO) developed a methodology for capturing the
costs, briefed Site Office officials on this approach in August 2004,
and documented this methodology in a letter to NNSA in September 2004.
LANL estimates stand-down costs at $121 million. NNSA's newly created
Field CFO Office attempted to validate LANL's cost-capturing
methodology and cost estimate, but it could not do so accurately
because (1) LANL did not record stand-down costs on an actual incurred
cost basis in its official accounting records and (2) NNSA Field CFO
officials could not use LANL's methodology to objectively identify
stand-down costs. As a result, NNSA Field CFO officials developed an
upper bound cost estimate of $370 million using cost information from
LANL's accounting records and documented stand-up dates. NNSA Field CFO
officials said this upper bound is the maximum potential cost of the
stand-down and is not intended to be interpreted as an accurate
estimate of the stand-down's costs. In April 2005, the manager of
NNSA's Los Alamos Site Office determined the duration of the stand-down
was reasonable. But the allowability of $14.3 million in stand-down
costs still has not been resolved.
You asked us to assess (1) the extent to which LANL's and NNSA's
estimates capture the total cost of the LANL stand-down, (2) the effect
of the stand-down on LANL's major research programs, and (3) whether
there was a reasonable basis for NNSA's decisions regarding the
reimbursement of stand-down costs to the University of California.
To assess the extent to which LANL's and NNSA's estimates capture the
total cost of the LANL stand-down, we examined the methodologies each
used to determine stand-down costs and interviewed senior officials in
the CFO offices of LANL and NNSA. To assess the effect of the stand-
down on LANL's major research programs, we asked NNSA and LANL
officials to identify programs they considered most vital for achieving
LANL's mission. For these programs, we reviewed program milestone
documentation provided by both LANL and NNSA and interviewed NNSA
program officials and senior LANL scientists and managers to identify
schedule modifications caused by the stand-down. In addition, we
interviewed officials from the Defense Nuclear Facilities Safety Board-
-an independent federal oversight board--to obtain its perspective on
the safety of the laboratory's nuclear facilities and officials from
DOD, LANL's largest end user, to confirm information about programs'
schedules and performance requirements. To assess whether NNSA's
decisions regarding the reimbursement of stand-down costs are
reasonable, we reviewed federal regulations and pertinent provisions of
the LANL contract, as well as Los Alamos Site Office and University of
California documents outlining decisions related to allowing
reimbursement. We also interviewed cognizant LANL, Site Office, and
other NNSA officials. We conducted our work from March 2005 through
October 2005 in accordance with generally accepted government auditing
standards.
Results in Brief:
Neither LANL's $121 million estimate nor NNSA's $370-million estimate,
which it considers an upper bound, accurately captures the total cost
of the LANL stand-down. The LANL estimate is inaccurate primarily
because LANL did not track the actual time employees spent on stand-
down activities. More specifically, LANL's method for tracking costs
did not establish separate stand-down activity codes within its
accounting system to identify time actually spent on stand-down
activities. Instead, LANL used a formula-based approach to estimate
costs by applying its units' average daily labor rates to those units'
activity risk levels. As a result, rather than tracking costs based on
how scientists and other personnel actually spent their time during the
stand-down, LANL's cost estimate is based on the proportion of
activities each unit allocated to each risk level and how long each
activity was stood down. Moreover, LANL's estimate includes only labor
and other direct costs and did not include support costs associated
with stand-down activities, further limiting the accuracy of its cost
estimate. For these reasons, neither NNSA's Field CFO nor we believe
that an accurate cost calculation can be computed using the information
LANL collected. Accordingly, NNSA developed its own cost estimate that
does not rely on LANL's estimated risk levels. To ensure that all stand-
down costs were accounted for, NNSA treated an entire unit as stood
down until all of its activities had resumed, even though most LANL
personnel had resumed risk level 1 and 2 activities while risk level 3
activities continued to be suspended. NNSA officials stated they did
this because it was not possible to objectively validate which
employees worked on a particular risk level activity within a unit.
Consequently, NNSA believes its upper bound overstates actual stand-
down costs. Like LANL's estimate, NNSA's estimate includes labor and
other direct costs. Unlike LANL's estimate, NNSA's estimate also
includes associated support costs, such as costs for laboratory
management activities that had been resumed but were still supporting
stand-down activities. Without the ability to track costs, it is
difficult for DOE to hold management and operating contractors
accountable and to make determinations regarding the allowability of
stand-down costs. Consequently, we are recommending that the Secretary
of Energy require DOE's management and operating contractors to set up
activity codes within their accounting systems so that the costs of any
future stand-downs can be tracked on an actual cost basis and require
the inclusion of associated support costs when reporting on stand-down
costs. DOE generally agreed with our recommendations.
While the stand-down delayed many mission-critical programs, including
nuclear weapons and threat reduction programs, almost all programs had
recovered by the end of fiscal year 2005, according to LANL and NNSA
program managers. In particular, the stand-down affected LANL's Nuclear
Weapons Programs--especially the life extension and refurbishment
programs for the W76 and B61 nuclear weapons and manufacturing and
certification activities for the W88 nuclear warhead--because many of
these activities rely on high-risk experimental facilities that were
stood down longer. In response to the stand-down, LANL's Nuclear
Weapons Programs have changed only one major delivery date and have not
substantially reduced the scope of any of their efforts, according to
NNSA, LANL, and DOD officials. However, the W76 and the W88 programs
extended certain key interim milestones and assumed schedule risk by
reducing the time available for scientists to analyze test data and to
make design changes or run additional tests if initial tests yield
unexpected results. LANL program managers said that the results of
tests performed to date have confirmed predictive models, and thus far
have not indicated that nuclear weapons programs' schedules will bear
additional risk. The stand-down also affected Threat Reduction
Programs, which seek to reduce the threat of weapons of mass
destruction, proliferation, and terrorism. For example, the stand-down
delayed the processing of radiological sources recovered from medical
and commercial facilities. The impact of the stand-down on some Threat
Reduction Programs is less clear because of other intervening factors,
such as the nationwide recall of a critical sensor component.
The basis for NNSA's determination that almost all of the stand-down
costs were allowable appears to be reasonable because (1) the LANL
management and operating contract authorizes stand-downs to address
serious safety and security concerns, such as those that existed at
LANL; (2) NNSA's Field CFO found that almost all stand-down costs were
consistent with the allowability and safety provisions of the contract;
(3) NNSA personnel were substantially involved in LANL's stand-down and
restart activities and participated in all key decisions; and (4) NNSA
concluded that the duration of the stand-down was reasonable. NNSA has
issued a notice of intent to disallow $14.3 million in stand-down costs
to the University of California for personnel costs for the first 2
days of the stand-down and certain small subcontractor claims and other
incremental costs, but the allowability of these costs has not yet been
resolved. However, given the scope of safety and security issues
identified during the stand-down, a growing trend in safety and
security incidents at the laboratory, and a long-standing attitude that
the safety precautions employees are expected to take in carrying out
often hazardous experiments are too cumbersome and really not
necessary, it is clear that safety and security approaches at the
laboratory need improvement going forward. According to the manager of
NNSA's Los Alamos Site Office, who arrived at Los Alamos in April 2004,
the safety culture at the laboratory is not as rigorous as it is at
other DOE facilities. Beginning in 2004, DOE's management and operating
contracts have given contractors the opportunity to earn extra years to
their contract terms. For example, to earn a 1-year contract extension,
the contractor for Sandia National Laboratories needs to achieve an
award-fee performance score of at least 90 percent, equivalent to
overall rating of outstanding performance, and meet cost reduction
goals. In comparison, NNSA officials stated that the new LANL contract,
to be awarded in December 2005, will allow NNSA's Administrator to
award an additional year to the contract if, for a given year, the
contractor achieves (1) an award-fee performance score of at least 85
percent based on predetermined performance evaluation criteria and then
(2) performance standards for additional award-term criteria. To
improve management and operating contractors' accountability, we
recommend that the Secretary of Energy require that contractors achieve
an overall performance rating of outstanding as a basis for being
awarded extra years to their contract terms. DOE generally agreed with
our recommendation.
Background:
While LANL's safety and security stand-down immediately followed
incidents in which (1) an undergraduate student who was not wearing
required eye protection was partially blinded in a laser accident and
(2) two pieces of CREM--computer disks in this case--were reported
missing, senior LANL managers said that the stand-down resulted from
concern over a negative trend in laboratory safety and security
performance beginning in fiscal year 2002. Laboratory data show that in
the 1-year period from July 1, 2003, through June 30, 2004, LANL
experienced 98 reportable safety, security, and environmental
protection occurrences--including an airborne radiation release and a
raw sewage discharge--up from 81 occurrences in fiscal year 2002.
Moreover, LANL officials have stated that what distinguished this
instance of missing CREM from others in the past was that LANL
employees disregarded security procedures and attempted to cover up the
loss.[Footnote 4] As a result of negative trends and back-to-back
safety and security incidents in which procedures were not properly
followed, LANL's director stood down the laboratory to systematically
address laboratory safety and security. According to the manager of
NNSA's Los Alamos Site Office (LASO), the stand-down decision was
appropriate.
The stand-down of operations at LANL was one of many stand-downs that
have occurred there and at other DOE facilities in recent years. For
example, in response to a plutonium exposure incident in August 2003,
LANL stood down some operations at its Plutonium Facility (known as TA-
55); corrective measures had not been completely implemented to address
the causes of the incident at the time of the 2004 LANL-wide stand-
down. In addition, 1 week prior to the LANL director's decision to
stand down all operations at the laboratory, experiments requiring the
use of nuclear materials were stood-down at LANL's Critical Experiments
Facility (known as TA-18) because of safety concerns. Further, in
October 2004 the Stanford Linear Accelerator Center was stood down
following a serious electrical arc injury to a contract employee;
operations did not resume until March 2005. In January 2005, management
at Lawrence Livermore National Laboratory stood down programmatic work
within its Plutonium Facility to address safety deficiencies. In
October 2005, NNSA's Livermore Site Office approved the resumption of
reduced activities of the Plutonium Facility.
DOE and the University of California require the protection and control
of classified information, including CREM; and LANL has reduced the
number of pieces of CREM it secures to better ensure its control. DOE
Order 471.2A establishes the department's Information Security Program
for the protection and control of classified and sensitive information.
Further, the University of California's Policy on Accountable
Classified Removable Electronic Media establishes practices to comply
with specific DOE/NNSA requirements for accountable CREM at the
laboratories it contractually manages, including conducting at least
annual inventories of holdings and reporting instances of missing CREM.
LANL security officials told us that as a result of reports of missing
CREM in late 2003, LANL undertook an inventory of its CREM holdings and
reduced its holdings from over 80,000 pieces to about 35,000 pieces by
moving the information stored on CREM to secure networks and then
destroying the CREM. LANL further reduced its CREM holdings to 20,000
pieces during the stand-down, according to these officials. In response
to LANL Director's Instruction 04-009, which guided resumption of
LANL's CREM activities, LANL consolidated its CREM into 20 centralized
libraries controlled by security specialists with daily CREM
inventories.[Footnote 5] LANL security officials have stated that
planned expansion of the laboratory's classified network will allow the
further reduction of CREM to under 5,000 pieces and further improve
CREM accountability and control.
DOE Order 425.1C establishes departmental requirements for restarting
nuclear facilities that were shut down, including an operational
readiness review process that must demonstrate that it is safe to
restart. Attachment 1 of the order, the Contractor Requirements
Document, directs management and operating contractors of DOE-owned
facilities, such as the University of California for LANL, to establish
procedures for managing restart actions that meet the order's
requirements, including the process for planning and conducting
operational readiness reviews and review and reporting criteria. In
particular, the University of California established procedures for
restarting LANL operations after a stand-down in Laboratory
Implementation Requirement 300-00-08.0 and through a series of
Director's Instructions issued to guide different facets of LANL's July
2004 stand-down and resumption--activities at different risk levels,
construction projects, and CREM--through readiness reviews.
In the days following July 16, 2004, LANL management and LASO officials
assigned a risk level to each of LANL's programmatic and administrative
activities; established an operational resumption process; and created
a Culture and Operations Model, Plan and Surety System to manage it.
Resumption of risk level 1 activities required approval by the
cognizant LANL associate director once, among other things, one-on-one
supervisory meetings were held to ensure that each employee was
committed to safety and security requirements and had completed certain
reading and training requirements. LANL management established a more
rigorous resumption process for risk level 2 and 3 activities that
included LASO oversight. Each activity underwent a self-assessment
through which 430 immediate safety and security concerns were
identified as requiring corrective actions prior to resumption. An
additional 3,047 safety and security concerns were identified for
correction after activities resumed operations. An independent
Resumption Review Board, composed of senior LANL managers and LASO
officials, reviewed each self-assessment for operational readiness and
to ensure that identified concerns had been addressed. These less-
immediate concerns that could be addressed after resumption have been
incorporated into LANL's Operational Efficiency plan, a laboratory-wide
effort to address unacceptable risks while implementing programs that
can improve laboratory efficiency. Risk level 3 activities also went
through an additional independent facility review to ensure laboratory
readiness. Each risk level 2 and 3 activity needed to obtain approval
from both the LANL director and LASO manager before resumption. In
addition, resumption of all CREM activities needed the approval of the
Deputy Secretary of Energy. As shown in figure 1, risk level 1
activities were approved to resume more quickly than risk level 2 and 3
activities.
Figure 1: Percent of LANL Activities Approved to Resume Normal
Operations by Risk Level, July 2004 through May 2005:
[See PDF for image]
Note: LANL assigned risk levels to 384 individual activities. Of these,
341 (or 89 percent) were assigned to risk level 1, 25 to risk level 2,
and 18 to risk level 3.
[End of figure]
Neither LANL's Estimate Nor NNSA's Upper Bound Accurately Captures the
Total Cost of the LANL Stand-Down:
LANL estimates that the total cost of the stand-down is about $121
million, while NNSA's $370 million estimate represents an upper bound
of stand-down costs.[Footnote 6] However, because LANL did not track
the actual time employees spent on stand-down activities, neither
amount accurately captures the stand-down's total cost. In addition, we
found that LANL's cost estimate understates the total cost of the stand-
down because it does not include certain stand-down related costs, and
NNSA officials stated that their estimate overstates stand-down costs
because it treats the costs of many risk level 1 and 2 activities as
stood down months after they had resumed operations.
LANL Did Not Track the Actual Time Spent on Stand-Down Activities:
In response to NNSA's July 30, 2004, directive to track stand-down
costs, LANL's CFO developed a formula-based methodology to capture
labor costs for each of the laboratory's approximately 375
organizational units--or cost centers--which used the following
factors:
* the average daily labor costs, based on the total salaries and
benefits paid to employees for a given week during the stand-down;
* the risk levels of the various activities performed within each cost
center;
* the amount of time managers estimated their employees spent on
activities at each risk level; and:
* the amount of time activities at each risk level were stood down.
Table 1 shows a hypothetical example for a cost center with $10,000 in
average daily labor costs and whose management estimated that staff
spent 40 percent of their time working on risk level 1 activities, 50
percent on level 2 activities, and 10 percent on level 3 activities. If
risk level 2 and 3 activities on a given day were stood down, but risk
level 1 activities had resumed, the cost center's estimated stand-down
costs for that day would be $6,000.
Table 1: Example of Results of LANL's Cost-Estimating Methodology Using
a Hypothetical Cost Center with Average Daily Labor Costs of $10,000:
Activity risk level: Risk level 1;
Percentage of work: 40%;
Stand-down costs before any activities resumed: $4,000;
Stand-down costs after risk level 1 activities resumed: $0;
Stand-down costs after risk level 1 and 2 activities resumed: $0.
Activity risk level: Risk level 2;
Percentage of work: 50%;
Stand-down costs before any activities resumed: $5,000;
Stand-down costs after risk level 1 activities resumed: $5,000;
Stand-down costs after risk level 1 and 2 activities resumed: $0.
Activity risk level: Risk level 3;
Percentage of work: 10%;
Stand-down costs before any activities resumed: $1,000;
Stand-down costs after risk level 1 activities resumed: $1,000;
Stand-down costs after risk level 1 and 2 activities resumed: $1,000.
Activity risk level: Total;
Percentage of work: 100%;
Stand-down costs before any activities resumed: $10,000;
Stand-down costs after risk level 1 activities resumed: $6,000;
Stand-down costs after risk level 1 and 2 activities resumed: $1,000.
Source: GAO example using LANL's methodology.
Note: LANL's methodology excluded the costs of ongoing risk level 0
activities.
[End of table]
Beginning in August 2004, LANL's CFO provided LASO's manager with
weekly stand-down cost estimates using this methodology. In November
2004, LASO's manager asked NNSA's Field CFO to validate LANL's costs.
NNSA Field CFO officials told us they could not validate LANL's stand-
down costs because LANL management had estimated the amount of time
employees spent on stand-down activities instead of tracking the actual
time. NNSA officials also found a number of discrepancies in the data
that LANL had used to develop its estimates and instructed LANL's CFO
to re-estimate stand-down costs once adjustments were made. These
include re-estimating the time spent on risk level 1, 2, and 3
activities within cost centers; ensuring the accuracy of resumption
dates, excluding the costs of ongoing risk level 0 activities, and
developing more accurate average daily labor rates. Although LANL made
these adjustments and revised its cost estimate accordingly, NNSA Field
CFO officials said they could not validate LANL's stand-down costs
because LANL's formula-based methodology for estimating stand-down
labor costs was unreliable. To more accurately account for stand-down
costs, NNSA Field CFO officials requested in December 2004 that LANL
employees revise their time charges to reflect time actually spent on
stand-down activities, beginning October 1, 2004. LANL told NNSA that
this task would require over 16,000 hours and cost approximately $1.6
million to complete, yet it most likely would not provide any more
accurate costs than its cost estimation formula. NNSA did not pursue
this further, but instructed LANL to set up activity codes in its
accounting system to track stand-down charges, beginning in January
2005, which it did. The LANL CFO told us that setting up accounts was
more feasible in January than it was at the beginning of the stand-down
because most activities had resumed by then.
LANL's CFO said LANL decided to estimate time spent on stand-down
activities prior to January 2005 because LANL's time and effort
reporting system could not easily track the time that individual
employees actually spent on stand-down activities, such as training or
unit safety assessments. LANL's CFO stated that LANL's time and effort
charge codes could not be easily modified to capture stand-down costs-
-for example, by adding a suffix to indicate that the work was stand-
down related. According to LANL's CFO, over 4,000 new activity codes
would have had to be created and employees would have had to be trained
to report their stand-down time, activities that would have taken time
away from LANL's primary focus of resuming safe and secure laboratory
operations, as quickly as possible. Consequently, LANL decided that
estimating costs would provide the best information to NNSA.
LANL's Estimate Is Inaccurate Because It Understates Total Stand-Down
Costs:
LANL's estimate of the total cost of the stand-down from July 2004
through May 2005 is $121 million. This total is composed of (1) $74
million in labor costs for LANL's research programs, including work
directly related to ensuring the reliability of nuclear weapons and
reducing the threat of nuclear proliferation, known as threat
reduction; (2) $23 million in labor costs for support functions,
including human resources and information management; and (3) $24
million for materials, subcontractor services, and other nonlabor
costs.
However, LANL's estimate is inaccurate for the following reasons:
* Total stand-down costs should have included both the costs of LANL's
research programs and the costs of activities that support these
programs, such as laboratory direction and other administrative
activities. LANL included the cost of support activities only for the
time period that those activities were stood down. LANL did not include
costs for resumed activities that provided support to other activities
that had not yet resumed. As a result, LANL's cost estimate understates
total stand-down costs.[Footnote 7] If LANL had included support
activities, its total cost estimate for the stand-down would have been
about $155 million.
* In January 2005, LANL managers reevaluated their previous estimates
of the percentage of time that their staff engaged in work at each risk
level. Although LANL substituted these new percentages into its cost
calculations in an effort to arrive at a more accurate stand-down cost
estimate, it is not clear if these percentages are typical of the time
employees would have spent on those activities had the laboratory not
stood down. For example, LANL managers told us that while some
scientists were unable to perform higher risk activities, they wrote
papers, engaged in planning and unclassified activities, and worked on
a backlog of lower risk projects that had previously been deferred
because of higher priority higher risk work. While these lower risk
activities are of value to the laboratory, staff may have devoted more
time to them than usual, resulting in an overestimate of time spent on
regular activities compared with stand-down activities. In this case
LANL's estimate may understate stand-down costs.
* LANL's cost estimate did not take into account all of the time spent
performing resumption activities. For example, the 15 members of the
laboratory's resumption review board spent 4 or more months
participating in the resumption process, but their time spent on this
stand-down activity was not captured in LANL's estimate.
* LANL did not consider the different pay levels of employees. The
result may have been higher or lower, depending on the salary level of
the employees who either were most involved in resumption activities or
could not resume normal activities.
NNSA's Field CFO Developed an Upper Bound for Stand-Down Costs Because
It Could Not Validate LANL's Cost Estimate:
NNSA Field CFO officials said that NNSA could not validate LANL's cost
estimate because LANL did not establish unique cost accounts to
separately identify time and effort associated with stand-down
activities. According to NNSA Field CFO officials, the only cost figure
that could be validated from the information LANL maintained was an
upper bound, reflecting all recorded labor costs incurred by each of
LANL's cost centers prior to each center's total resumption of
activities. Using this approach to estimate labor costs, NNSA's Field
CFO officials developed its $370-million upper bound cost estimate.
NNSA Field CFO officials said that this methodology ensured that all
stand-down labor costs were captured, even though they recognized that
the costs of low-risk work performed by affected cost centers would be
captured as well.
Table 2 shows how NNSA's methodology provides very different results
from LANL's methodology shown in table 1. Using NNSA's methodology, the
hypothetical cost center would incur a total cost of $10,000 each day
until all three risk levels of activities were approved to resume.
Table 2: Example of Results of NNSA's Cost Estimating Methodology Using
a Hypothetical Cost Center with Average Daily Labor Costs of $10,000:
Activity risk level: Risk level 1;
Percentage of work: 40%;
Stand-down costs before any activities resumed: $4,000;
Stand-down costs after risk level 1 activities resumed: $4,000;
Stand-down costs after risk level 1 and 2 activities resumed: $4,000.
Activity risk level: Risk level 2;
Percentage of work: 50%;
Stand-down costs before any activities resumed: $5,000;
Stand-down costs after risk level 1 activities resumed: $5,000;
Stand-down costs after risk level 1 and 2 activities resumed: $5,000.
Activity risk level: Risk level 3;
Percentage of work: 10%;
Stand-down costs before any activities resumed: $1,000;
Stand-down costs after risk level 1 activities resumed: $1,000;
Stand-down costs after risk level 1 and 2 activities resumed: $1,000.
Activity risk level: Total;
Percentage of work: 100%;
Stand-down costs before any activities resumed: $10,000;
Stand-down costs after risk level 1 activities resumed: $10,000;
Stand-down costs after risk level 1 and 2 activities resumed: $10,000.
Source: GAO example using NNSA's methodology.
Note: NNSA's methodology treated the costs of ongoing risk level 0
activities as stand-down costs and included them in its risk level 1,
2, and 3 estimates.
[End of table]
NNSA Field CFO officials stated their estimate overstates actual stand-
down costs because they calculated stand-down costs on an "all up" or
"all down" basis, even though many LANL employees resumed risk level 1
activities while risk level 2 and 3 activities continued to be
suspended.[Footnote 8] In addition, the NNSA Field CFO decided to
include in its estimate the costs of ongoing risk level 0 activities--
which were not stood down because they were determined to be either
mission-critical or necessary to maintain the safety and security of
the laboratory--even though they were undergoing required risk level 1,
2, or 3 safety and security reviews.
Table 3 shows the difference in LANL's cost estimate and NNSA's upper
bound estimate. In particular, LANL included only the cost of support
activities for the time period that those activities were stood down
and not their costs after they resumed and were providing support to
program activities that were stood down. In contrast, NNSA fully
allocated support costs to program stand-down costs to ensure that the
total costs of the stand-down to NNSA and LANL's other program sponsors
were captured.[Footnote 9]
Table 3: Comparison of the Impact of LANL's and NNSA's Treatment of
Support Costs on Cost Estimates:
Dollars in millions.
Labor support costs;
LANL's cost estimate: $23;
NNSA's upper bound cost estimate: $0[A].
Labor program costs;
LANL's cost estimate: $74;
NNSA's upper bound cost estimate: $196.
Nonlabor costs;
LANL's cost estimate: $24;
NNSA's upper bound cost estimate: $20.
Allocated support costs;
LANL's cost estimate: $0;
NNSA's upper bound cost estimate: $154.
Total;
LANL's cost estimate: $121;
NNSA's upper bound cost estimate: $370.
Source: GAO calculation based on NNSA's and LANL's data.
Note: LANL's estimate includes labor support costs only for the time
period those activities were stood down. In contrast, NNSA's upper
bound fully allocated support costs to program stand-down costs, using
LANL's fiscal year 2004 and fiscal year 2005 support-cost multipliers.
[A] NNSA included labor support costs in its "allocated support costs"
category.
[End of table]
Neither LANL's Nor NNSA's Estimates Include Other Stand-Down Related
Costs:
In addition to costs incurred at LANL during the stand-down that were
captured in LANL's estimate and NNSA's upper bound estimate, there are
subsequent costs incurred that were not captured. Specifically, neither
the LANL estimate nor the NNSA estimate includes related costs for (1)
additional actions that LANL is taking to address 3,047 safety and
security problems identified as a result of the stand-down that units
were allowed to address after resumption and (2) unknown future costs
of program delays or additional work that may need to be performed to
keep program milestones on track. In response, NNSA officials stated
their upper bound sufficiently overstated actual stand-down costs that
it could also include stand-down related future costs. Nevertheless, we
cannot determine the total stand-down cost because LANL did not
separately track actual costs during the stand-down and did not include
these additional related costs.
Although the Stand-Down Delayed Many Mission-Critical Programs, Almost
All Have Recovered According to LANL and NNSA Program Managers:
Of the mission-critical programs whose activities were delayed by the
stand-down, LANL's family of nuclear weapons programs was most
affected; however, LANL and NNSA officials said almost all of these
programs had recovered by the end of fiscal year 2005, and they expect
these programs to achieve their major delivery dates. In addition,
LANL's stand-down affected nuclear weapons programs at other NNSA
facilities. The stand-down also affected threat reduction programs and
other LANL activities, but unrelated issues, such as the earlier stand-
down of some operations at LANL's Critical Experiments Facility and
that facility's failure to resume almost all criticality experiments,
also contributed to schedule delays.
While the Stand-Down Primarily Affected Nuclear Weapons Activities,
Almost All Major Delivery Dates Have Been Maintained:
Nuclear weapons activities, central to LANL's mission, represent the
majority of programmatic costs at the laboratory and were affected by
the stand-down more than other families of laboratory programs because
of the longer stand-down time associated with these high-risk
activities and the more critical nature of project deadlines. LANL's
primary mission is to help ensure the safety and reliability of nuclear
weapons in the nation's stockpile. It is responsible for the design,
evaluation, and annual assessment and certification of the W76, W78,
and W88 nuclear warheads and the B61 nuclear bomb in the U.S. nuclear
weapons stockpile and works in cooperation with NNSA's other nuclear
weapons design laboratories and production plants.[Footnote 10] Because
the United States stopped conducting underground nuclear weapons tests
in 1992, LANL weapons scientists are involved in hundreds of research
projects in programs aimed at developing strong physics modeling and
predictive capabilities that provide information about nuclear weapons'
performance. In fiscal year 2004, LANL's total operating costs were
about $2 billion. Of this total, about $1.3 billion, or 65 percent, was
spent on nuclear weapons activities and associated facilities
operations, excluding work sponsored by other federal agencies.
Those nuclear weapons program activities LANL categorized as risk level
3 were stood down longer than risk level 1 and 2 activities at the
laboratory. These high-risk activities include the use of special
nuclear materials, high explosives, and hazardous chemicals in
facilities that require rigorous safety and security measures to
protect employees from potential safety hazards and materials and
information from unauthorized access. Of the 26 LANL cost centers that
did not resume full operations until after January 28, 2005, 18 were
related to nuclear weapons program activities.
Unlike LANL's threat reduction programs and strategic research
programs, which have fewer key delivery dates, most of LANL's nuclear
weapons programs and activities are incorporated into formal project
schedules with many milestones that are tracked and reported up to LANL
and NNSA management. These milestones take into account laboratory
resource availability, production plant availability, and the
requirements of DOD and other LANL customers. When milestones are
missed, realigning them is an intensive effort that requires NNSA and
sometimes DOD consultation.
Although many mission-critical nuclear weapons activities at LANL were
affected by the stand-down, LANL and NNSA officials report that the
major delivery dates for almost all of these activities have been
maintained. To maintain these delivery dates, LANL officials and
managers engaged in recovery planning during the stand-down by (1)
applying for risk level 0 exceptions to continue operation of key time-
critical activities, (2) reordering schedules to prioritize key tests
and experiments, (3) working around the stand-down by sending LANL
staff to Sandia and other NNSA facilities, and (4) prioritizing the
resumption of facilities central to LANL's most essential nuclear
weapons programs. However, to mitigate stand-down effects and achieve
major delivery dates, NNSA and LANL officials said programs eliminated
some less vital tests, reduced the scope of some design options,
reduced time available for scientists and engineers to analyze test
data, and lost schedule contingency--assuming more risk to the
achievement of major delivery dates if tests provided unexpected
results. NNSA and LANL officials said that, under the revised program
schedules, it will be difficult to facilitate design changes or perform
any additional testing without affecting major nuclear weapons program
delivery dates if test data reveal anomalies. LANL officials said that,
to date, test results have confirmed predictive models and, thus far,
have not indicated that nuclear weapons programs' schedules will bear
additional risk.
Table 4 shows the effects of the stand-down on many of LANL's nuclear
weapons activities reported to us by LANL, NNSA, and DOD officials.
(See app. III for detailed discussions of these activities and actions
taken during the stand-down to mitigate its effects.) Effects include
shifting dates of critical tests to support LANL's W76 life extension
program; eliminating the time available to scientists and engineers for
test data analysis; increased risk that manufacturing schedules will
not be met; $4 million in additional future poststand-down compliance
costs for repairs to a key testing facility; and delayed implementation
of a methodology that aids weapons designers in understanding the
confidence they have in their models' abilities to predict weapons'
capabilities.
Table 4: The Stand-Down's Effects on LANL's Nuclear Weapons Activities:
Program: W76-1 Life Extension Program;
Program description: This program is an effort to refurbish the Navy's
W76 warhead through a significant design modification that will extend
its service life. The first refurbished warhead is scheduled for
production by September 2007;
Stand-down effects: Key tests were completed during the stand-down
under risk level 0 exceptions and some test work-arounds were developed
to support a successful final design review in May 2005, 3 months late.
Officials have said the September 2007 production milestone will be
met, though the stand-down increased the risk to schedule achievement.
Program: W88 Pit Manufacturing and Certification Activities[A];
Program description: LANL is working to manufacture and certify pits
for the Navy's W88 warhead. By the end of fiscal year 2007, LANL will
(1) deliver the first certified W88 pit since 1989 and (2) establish a
manufacturing capability to produce between 10 and 20 certified W88
pits per year;
Stand-down effects: To meet its 2007 deadlines, LANL has significantly
reduced contingency time in its schedule and increased the risk that
the schedule can be achieved because of one delayed experiment and the
need to push fiscal year 2004 work into fiscal year 2005.
Program: B61 ALT 357 Program;
Program description: This program is an effort to refurbish two
modifications of the Air Force's B61 gravity bomb. The program
transitioned into production in 2003; and at the time of the stand-
down, LANL was building test units. The first refurbished bomb for each
modification is scheduled for production by June 2006 and January 2007;
Stand-down effects: LANL delayed several key tests and reduced the time
available for test data analysis. Testing has resulted in design
changes, which officials said could be more difficult to facilitate
without delaying delivery dates because of the stand-down. However,
officials said the delivery dates have been maintained.
Program: Repairs to the Second Axis of the Dual Axis Radiographic
Hydrodynamic Test (DARHT) Facility and Facility Commissioning[B];
Program description: LANL is repairing the second axis of DARHT to fix
a high voltage breakdown problem. Prior to the stand-down, LANL was
scheduled to finish the repairs and commission the facility in
September 2007. During the stand-down, LANL revised its schedule for
commissioning to January 2008;
Stand-down effects: LANL was unable to resume work on DARHT repairs
until almost 2 months later than planned, and now plans to commission
the facility in March 2008, 6 months later than originally planned.
LANL's test schedule will not be affected if the second axis is
commissioned by that time.
Program: Hydrotesting Program[C];
Program description: NNSA updates its 5-year National Hydrotest Plan
annually, and LANL's capabilities are used to implement it. LANL
performs hydrotests to support the W76-1 Life Extension Program, W88
activities, and emergency response;
Stand-down effects: LANL had six hydrotests scheduled during the stand-
down, five of which were to support the W76-1 Life Extension Program.
LANL shifted its schedule to prioritize tests that were key to
maintaining the W76-1 schedule. Some tests were rescheduled from fiscal
year 2005 to 2006.
Program: Experimental Programs;
Program description: LANL's Experimental Programs span its stockpile
stewardship activities, and data from these programs serve as a check
of the accuracy of the laboratory's weapons models and simulations;
Stand-down effects: A number of experimental milestones were delayed as
a result of the stand-down. However, LANL prioritized the experiments
most critical to meeting programs' major production and delivery dates.
Some experimental activities have shifted from fiscal year 2005 to
2006.
Program: Simulation and Implementation of the Quantification of Margins
and Uncertainties (QMU) Methodology;
Program description: LANL's Simulation activities focus on integrating
experimental and computational data into models used to predict
weapons' characteristics and to support stockpile stewardship. The QMU
methodology is a means of quantifying the uncertainty in these models
and simulations;
Stand-down effects: Simulation activities were stood down for 2 months,
and some fiscal year 2004 work was completed in fiscal year 2005. To
meet near-term delivery dates, longer-term work schedules, including
QMU implementation, were put at greater risk.
[End of table]
Sources: NNSA and LANL.
AModern nuclear weapons have a primary stage that is the initial source
of energy and a secondary stage that is driven by the primary and
provides additional explosive energy.
BThe DARHT Facility provides LANL with the capability to capture X-ray
images of nuclear weapons using mock materials during their implosion.
The facility is comprised of two buildings, or axes, each of which
houses an accelerator to produce X-rays. The first axis became
operational in 1999, while the second axis is scheduled to be
commissioned in March 2008.
CNonnuclear hydrotests are high-explosives driven experiments used to
study what happens to a weapon's pit when it implodes. The DARHT
facility uses X-ray imaging and other techniques to provide test data
for evaluating weapons models and simulations.
Nuclear Weapons Activities at Other Laboratories:
Nuclear weapons activities at other laboratories were also affected by
the LANL stand-down to different extents. Many of LANL's nuclear
weapons programs either require cooperation and coordination with other
NNSA laboratories and production plants or provide support to programs
that are primarily the responsibility of other facilities. Table 5
summarizes information provided by agency officials and contractors on
several of these affected programs (see app. III for detailed
discussions of these activities and actions taken during the stand-down
to mitigate its effects).
Table 5: The LANL Stand-Down's Effects on Related Nuclear Weapons
Activities at Other NNSA Facilities:
Program: Neutron Generator Fabrication Activities at Sandia[A];
Program description: Sandia builds neutron generators, and LANL
supplies Sandia with neutron tube targets, a key subcomponent;
Stand-down effects: Because LANL could neither produce nor ship targets
during the stand-down, Sandia was unable to fabricate 300 generators at
a cost of $75,000 each. Without any additional staff resources, this
delay may affect Sandia's ability to meet a major 2009 delivery date.
Program: W80 Detonator Surveillance Activities at Lawrence
Livermore[B];
Program description: LANL was scheduled to transfer responsibility for
W80 detonator surveillance to Lawrence Livermore by October 1, 2004.
This required shipping detonators as well as historical surveillance
data, stored on CREM;
Stand-down effects: LANL was unable to ship detonators or data during
the stand-down, likely delaying Lawrence Livermore's schedule for
completing W80 detonator surveillance by 1 year. LANL did make
shipments in June and August 2005.
Program: Seamless Safety for the 21st Century Program at Pantexc;
Program description: Pantex is implementing programs for LANL's B61 and
W88 pit activities. At the time of the stand-down, Pantex was working
with LANL to complete final hazardous analyses for these programs;
Stand-down effects: Primarily because information stored on CREM could
not be accessed during the stand-down, Pantex was delayed in developing
final hazardous analyses by about 3 months for the W88 and about 6
months for the B61.
[End of table]
Sources: LANL and NNSA.
ANeutron generators are components in all nuclear weapons that must be
exchanged on a regular basis because of their limited life.
BThe W80 is a cruise missile warhead. Its detonator system sets off the
explosives that act upon a nuclear weapon's primary stage. Surveillance
is performed annually to determine whether any design anomalies have
developed as the weapon ages.
CThis nuclear-complex wide program enhances worker and environmental
safety in the assembly, disassembly, and testing processes for nuclear
weapons. The program requires an exchange of information between the
design laboratories and production plants to determine potential
hazards. Data are exchanged using CREM.
The Stand-Down Also Affected Threat Reduction and Other Programs at
LANL, but the Extent of Its Impact Is Unclear Because of Unrelated
Factors:
LANL's family of threat reduction programs was also affected by the
stand-down, in some cases, facing schedule delays and elevated risks
similar to those faced by the laboratory's nuclear weapons programs;
however, many threat reduction programs continued operations during the
stand-down because they received risk level 0 exceptions.[Footnote 11]
Threat reduction programs that were stood-down had almost all resumed
by the end of September 2004, except for risk level 3 activities
involving LANL's Critical Experiments Facility (TA-18), which was stood
down for security and safety concerns on July 9, 2004--1 week prior to
the laboratory-wide stand-down--and which, to date, has not resumed
operations. Many of LANL's threat reduction programs rely on TA-18, and
LANL officials have said that its near-simultaneous stand-down makes it
difficult to attribute schedule delays to the laboratory-wide stand-
down, as opposed to the TA-18 stand-down (see app. IV for a discussion
of the TA-18 stand-down).
Table 6 describes LANL's major threat reduction programs with schedules
affected by the stand-down, as reported to us by LANL, NNSA, and DOD
officials. (See app. V for detailed discussions of these activities and
actions taken during the stand-down to mitigate its effects.) Effects
include $14 million in costs incurred because of a delay to one
program, delays in testing of radiation detection monitors for borders,
and a missed nuclear materials training course for international
inspectors.
Table 6: The LANL Stand-Down's Effects on Threat Reduction Activities:
Program: Off-Site Source Recovery Program;
Program description: This NNSA program recovers excess and unwanted
radiological sources from medical and commercial facilities to reduce
the risk that they might be used in a dirty bomb. LANL processes or
secures these sources for storage;
Stand-down effects: LANL could not receive shipments or process sources
during the stand-down, and LANL's off-site source recovery activities
fully resumed in January 2005. However, officials report that fiscal
year 2004 and 2005 program benchmarks were met.
Program: Fabrication of Nuclear Explosion Monitoring Sensor Packages
for Air Force Global Positioning System (GPS) Satellites;
Program description: LANL fabricates suites of nuclear explosion
monitoring sensors for a new constellation of GPS satellites. During
the stand-down, the Air Force became aware of an industry-wide part
recall affecting a part LANL uses in its sensors;
Stand-down effects: Officials said the sensor fabrication program was
delayed 4 months because of the stand-down. The Air Force was precluded
from communicating about the part recall with LANL during the stand-
down, contributing to this delay.
Program: Design Work and Process Testing for the Pit Disassembly and
Conversion Facility;
Program description: This facility is currently in design for
construction at Savannah River. LANL's role in the project is primarily
design work and a full-scale demonstration of many of the facility's
processes;
Stand-down effects: NNSA estimates that delays from the stand-down cost
the project $14 million and delayed the start of the demonstration by
as much as 18 months.
Program: Testing of Radiation Detection Portal Monitors for Borders;
Program description: At the time of the stand-down, LANL was involved
in testing of radiation detection portal monitors to be deployed at
borders to enhance homeland security. Testing was to occur at TA-18;
Stand-down effects: Testing was delayed for over 5 months, but it did
occur at TA-18. It is unclear whether testing activities would have
resumed more quickly had TA-18 operations fully resumed with the
laboratory.
Program: Plutonium (Pu-238) Heat Sources Fabrication;
Program description: LANL manufactures small heat sources using Pu-238,
a nonfissile plutonium isotope. These heaters are used by NASA to keep
spacecraft's electronics packages warm during deep space missions. At
the program's inception, LANL planned to fabricate 72 Pu-238 heaters,
but a 2003 safety incident reduced the scope of the program to the
fabrication of 36 Pu-238 heaters;
Stand-down effects: The stand-down further reduced the scope of the
program to the fabrication of 23 Pu-238 heaters, and NASA agreed to
make up the difference with leftover heaters from a previous mission.
Some additional risk has been accepted as these leftover heaters have
decayed more than the newly fabricated heaters would have. LANL shipped
21 new heaters to NASA in January 2005.
Program: Emergency Response Hydrotest;
Program description: LANL had scheduled a hydrotest in July 2004 to
support emergency response operations;
Stand-down effects: Because of the stand-down, the test was not
performed until August 2005, with the agreement of the test sponsor.
Program: Nondestructive Assay Training for the International Atomic
Energy Agency (IAEA);
Program description: LANL hosts IAEA inspectors twice per year for
training in the identification of radioactive materials using
nondestructive means;
Stand-down effects: As a result of the stand-down, one training session
was cancelled. Some IAEA inspectors were fielded without the training.
Sources: LANL and NNSA.
[End of table]
At the outset of the stand-down, LANL management recognized that many
threat reduction activities were crucial laboratory functions--such as
country-specific nonproliferation assistance and emergency response
training--and gave them risk level 0 exceptions to continue operations
throughout the stand-down's duration. Examples follow:
* LANL was permitted to ship a mixed-oxide fuel test assembly to France
in support of a nuclear materials disposition project that LANL
officials reported would otherwise have faced several years delay and
an additional $1 billion in costs.
* Emergency response training for the Federal Bureau of Investigation
and the DOE/DOD Joint Tactical Operations Team, which responds to
domestic nuclear incidents, was permitted to continue in TA-18 during
the stand-down, as resources permitted.
* Activities to move special nuclear materials out of TA-18 continued
during the stand-down.
* DOE's Proliferation Information Network System, housed at LANL, was
made available during the stand-down to other DOE facilities to
facilitate their reviews of export license applications.
* A LANL employee was permitted to stay in Greece to complete the
process of calibrating radiation detection monitors in advance of the
2004 Summer Olympics in Athens.
* LANL experts were allowed to travel to countries such as Libya and
Turkey for in-country support.
* Throughout nearly all of the stand-down, LANL continued to support
specific counterintelligence activity.
* LANL employees were able to staff and provide equipment for
designated national security special events.
Beyond the laboratory's nuclear weapons and threat reduction
activities, many LANL scientists focus their efforts on Strategic
Research Programs, including chemical, environmental, and energy
research. These programs were minimally affected by the stand-down,
because many are managed by individual scientists and often are not
driven by schedules with critical deadlines. All of LANL's Strategic
Research Programs were approved to resume risk level 2 operations after
the stand-down by the end of September 2004 and risk level 3 operations
by the end of October 2004.
The Strategic Research activity most affected by the stand-down was use
of the laboratory's National High Magnetic Field Laboratory, a user
facility jointly supported by NNSA and the National Science Foundation,
to which researchers from around the world travel to use the
laboratory's high-strength magnets. At the time of the stand-down
several groups of researchers, some from foreign universities, were
flown home by LANL. Ultimately, LANL officials calculate that the stand-
down resulted in the loss to users of at least 135 magnet days--the
number of magnets multiplied by the days they were unavailable. In
addition, the stand-down delayed design work and procurement for a new
magnet, the largest magnet in the world, which is now expected to be
completed 2 months late in September 2006.
The Basis for NNSA's Decision to Reimburse Almost All Stand-Down Costs
Appears to Be Reasonable; Opportunities Exist to Strengthen NNSA's
Oversight of LANL Management:
The basis for the LASO manager's determination in April 2005 that
almost all of the stand-down costs were allowable appears to be
reasonable because (1) the LANL management and operating contract
authorizes stand-downs to address serious safety and security concerns,
such as those that existed at LANL; (2) NNSA's Field CFO found that
almost all stand-down costs were consistent with the allowability and
safety provisions of the contract; (3) LASO personnel were
substantially involved in LANL's stand-down and restart activities and
participated in all key decisions; and (4) LASO concluded that the
duration of the stand-down was reasonable. LASO has questioned the
allowability of $14.3 million in stand-down costs, but this issue has
not yet been resolved, and negotiations between the University of
California and NNSA are continuing. Given the scope of safety and
security issues identified during the stand-down, the new management
and operating contract to be awarded in December 2005 offers an
opportunity to more comprehensively address safety and security at LANL
over the long term.
The Basis for NNSA's Decision to Reimburse Almost All Stand-Down Costs
Appears to Be Reasonable:
LANL's contract authorizes stand-downs to address serious safety and
security concerns, such as those that existed at LANL. As LANL's
management and operating contractor, the University of California is
subject to a number of DOE directives--listed in appendix G of the
contract--that relate to the requirement to manage and operate the
laboratory safely, securely, and in accordance with all applicable
statutes and regulations. LANL reports that these directives encourage
and require the University of California to take whatever steps it
reasonably believes are necessary to ensure compliance, including
standing down the laboratory. While NNSA initially questioned LANL's
authority to order a stand-down, it subsequently determined that--given
the nature of the safety and security incidents at the laboratory--
prudent operation of the facility can include a decision by laboratory
management to suspend operations until they are deemed safe and
secure.[Footnote 12]
LANL had experienced several serious safety incidents prior to the
stand-down--and its data indicated declining safety performance since
fiscal year 2002--contributing to the LANL director's decision to stand-
down the laboratory. (See table 7.) LASO's manager, who arrived at Los
Alamos in April 2004, said the safety culture at the laboratory was
much less rigorous than at other DOE facilities. The manager said he
had discussed approaches with LANL management for addressing issues
associated, such as implementing a series of limited stand-downs at
individual laboratory facilities focused on safety improvements, but no
course of action was agreed upon prior to the July 2004 laboratory-wide
stand-down.
Table 7: Safety Incidents Preceding the LANL Director's Stand-Down
Decision:
Type of incident: Fire/explosion;
Date: April 2003;
Description: Chemist received first-degree burns when a chemical
reaction caused the contents in a Petri dish to flash.
Type of incident: Slips and falls;
Date: April 2003;
Description: Pipe cutter fractured a leg when he fell from a ladder.
Type of incident: Hazardous-substance exposure;
Date: July 2003;
Description: Employee received eye injury resulting from an acid
splash.
Type of incident: Radiation exposure;
Date: August 2003;
Description: Two employees were contaminated with plutonium while
conducting a routine inventory.
Type of incident: Electrical;
Date: September 2003;
Description: Subcontractor employees were nearly killed or seriously
injured accessing an electrical cabinet.
Type of incident: Hazardous substance exposure;
Date: September 2003;
Description: Five workers were exposed to toxic vapors.
Type of incident: Personnel contamination;
Date: March 2004;
Description: Employee detected contamination on face because the hood
sash was open.
Type of incident: Radiation exposure;
Date: March 2004;
Description: Technicians received a low neutron dose during maintenance
work.
Type of incident: Electrical;
Date: March 2004;
Description: Workers were nearly killed when a mobile crane struck an
overhead electrical line.
Type of incident: Electrical;
Date: June 2004;
Description: Student received an electrical shock while testing cables.
Type of incident: Laser burn;
Date: July 2004;
Description: Student received a permanent eye injury while conducting
laser experiment.
Source: LANL.
[End of table]
NNSA's Field CFO found that almost all stand-down costs were consistent
with the allowability and safety provisions of the contract. Under the
contract and applicable regulations, a cost is allowable if it is
reasonable, allocable, and complies with the contract terms as well as
applicable accounting standards and regulations.[Footnote 13] In
November 2004, LANL's legal counsel analyzed each of these factors, as
well as safety requirements of the contract, and concluded that almost
all stand-down costs were reasonable.[Footnote 14] NNSA's Field CFO's
review of stand-down costs appears also to have considered the
allowability and safety provisions of the contract. In addition, Field
CFO officials examined LANL's cost estimating and reporting
methodology--including reviewing and tracing actual labor costs
recorded in LANL's accounting system--and interviewed key LANL
personnel. On the basis of this review, NNSA's Field CFO determined
that almost all stand-down costs appeared to be of the nature and type
that would normally be considered allowable under the terms and
conditions of the contract, including tasks where laboratory personnel
were engaged in analyzing the safety, security, and environmental risks
inherent in their jobs and in determining how to ensure that all LANL
programs complied with the applicable regulatory criteria.
LASO personnel were substantially involved in LANL's stand-down and
restart activities and participated in all key decisions. On July 15,
2004, LANL's director notified the NNSA Administrator and LASO's
manager of his intent to institute a laboratory-wide stand-down. Both
the Deputy Administrator of NNSA and the LASO manager have said they
agreed with the LANL director's decision to stand down the entire
laboratory to address safety and security concerns. On July 17, 2004,
senior management from both LANL and LASO met to begin planning
necessary resumption actions, and schedules for restart activities were
later developed in conjunction with NNSA personnel. During the stand-
down, LASO and LANL personnel worked closely together to identify key
actions that had to be taken before an activity could resume operations
and to verify their completion. LASO's manager approved all risk level
2 and 3 restart decisions. Because of LASO's involvement and its July
30, 2004, letter advising LANL that stand-down costs would be subject
to the allowability provisions of the contract, LASO was in a position
during the stand-down to know and instruct LANL as to what was and was
not a proper cost.
According to NNSA's Field CFO, the stand-down's duration affects the
reasonableness and allowability of stand-down costs. In an April 6,
2005, memorandum to NNSA's Administrator, the LASO manager concluded
that the duration of the stand-down and resumption efforts was
reasonable and was likely noteworthy for its efficiency.
On April 8, 2005, LASO's manager issued a notice of intent to disallow
$14.3 million in stand-down costs to the University of California.
These costs included (1) $6.3 million in small subcontractor claims and
other incremental costs and (2) $8 million in personnel costs for the
first 2 days of the stand-down. These issues have not yet been
resolved, and negotiations between the University of California and
NNSA are continuing.
The New LANL Contract Provides Opportunities for Improving Safety and
Security:
LANL officials told us that LANL's safety and security problems are not
the result of insufficient regulations or LANL employees' lack of
familiarity with expected procedures, but instead reflect a long-
standing attitude that the safety precautions employees are expected to
take in carrying out often hazardous experiments are too cumbersome and
really not necessary. For example, according to a 2001 report to LANL
management, laboratory employees believed that excessive laboratory
safety, security, and environmental protection requirements were an
obstacle to their scientific accomplishment.[Footnote 15] More
recently, the LASO manager cited a culture of noncompliance at LANL and
said the laboratory was 10 years behind other DOE facilities in
implementing safety practices in performing work. Since the stand-down
began, LANL has reported at least three serious safety incidents in
which procedures were not followed. For example, in March 2005, several
LANL employees were exposed to airborne radiological contaminants when
they removed their safety equipment in a contaminated environment.
Also, in June 2005, two employees accidentally inhaled fumes while
mixing acids, but one failed to report the incident to management for 7
weeks, despite being hospitalized.
NNSA has proposed a 7-year contract for LANL's new management and
operating contract for award in December 2005. NNSA's request for
proposals allows those parties bidding on the contract to propose a
maximum annual fee between $53.4 million and $79.7 million, which will
be incorporated into the final contract. Thirty percent of this fee
will be fixed, and 70 percent will be earned based on performance. The
request for proposals also provides an opportunity for the new
contractor to extend the length of the contract up to 13 years for a
total of 20 years. According to NNSA officials, NNSA's Administrator
may award an additional year to the contract if, for a given year, the
contractor achieves (1) an award-fee performance score of at least 85
percent, based on predetermined performance evaluation criteria, and
then (2) performance standards for additional award-term
criteria.[Footnote 16]
The proposed LANL contract does not require that the contractor achieve
an overall rating of outstanding to be eligible to earn an extension to
the contract's term. In contrast, the management and operating contract
for Sandia National Laboratories, signed in fiscal year 2004,
established a higher performance score for the contractor to earn up to
5 additional years on its 5-year contract. Specifically, to be eligible
to earn a 1-year contract extension, Sandia's contractor needs to
achieve an overall performance rating of at least 90 percent,
considered "outstanding," during the fiscal year. Sandia's contractor
also needs to achieve cost savings sufficient to fund completion of
projects that had been approved but did not receive full funding.
Conclusions:
The July 2004 LANL stand-down disrupted programmatic activity across
the laboratory, in some areas for as long as 10 months. While this
stand-down was particularly extensive, a number of other DOE
laboratories and production plants have also stood down facilities in
recent years. Because these stand-downs occur, DOE and the Congress
need to be in a position to understand their impacts, including their
costs. Without the ability to track costs, it is difficult for DOE to
hold management and operating contractors accountable and to make
determinations regarding the allowability of stand-down costs.
NNSA officials have stated that a root cause of the July 2004 stand-
down at LANL is a laboratory culture that does not prioritize safety
and security in its daily operations. Despite LANL management's new
emphasis on safety, LANL has reported at least three serious incidents
where procedures were not followed. For example, in one incident an
employee who had accidentally inhaled fumes while mixing acids waited 7
weeks before reporting the incident, despite being hospitalized. DOE
has the opportunity to address problems with its laboratories' safety
cultures when negotiating new management and operating contracts by
holding contractors to the highest performance standards as the basis
for awarding fees and additional contract years.
Recommendations for Executive Action:
To improve DOE's oversight of its management and operating contractors,
we recommend that the Secretary of Energy require that all contractors
take the following two actions:
* establish activity codes within their accounting systems so that the
costs of any future stand-downs can be tracked on an actual cost basis
and:
* include associated support costs when reporting on stand-down costs.
In addition, to improve management and operating contractors'
accountability, we recommend that the Secretary of Energy require that
contractors achieve an overall performance rating of outstanding to be
eligible to earn extra years to their contract terms.
Agency Comments:
We provided DOE with a draft of this report for its review and comment.
In written comments, DOE generally agreed with our recommendations.
(See app. VI.) DOE also clarified the new LANL contract's criteria for
the contractor to earn extra years to the contract term, which we
incorporated. In addition, DOE provided comments to improve the
report's technical accuracy, which we have incorporated as appropriate.
Scope and Methodology:
To assess the extent to which LANL's and NNSA's estimates capture the
total cost of the LANL stand-down, we examined the methodologies each
used to determine stand-down costs and interviewed senior officials in
the financial management offices of LANL and NNSA. We were briefed by
LANL's CFO and NNSA's Field CFO officials on the methods each used to
calculate stand-down costs. In addition, we discussed the parameters of
LANL's accounting system and of the information LANL collected to
develop its cost estimate. To better understand both LANL's and NNSA's
methodologies for calculating labor costs, we reviewed data on
activities' resumption dates by risk levels, daily cost calculations,
and support cost rates. We also reviewed correspondence from LASO and
NNSA Field CFO officials to LANL regarding cost tracking,
correspondence describing LANL's and NNSA's methodologies, and NNSA's
February 22, 2005, report to LASO on Los Alamos Stand-Down Costs. To
understand what activities LANL staff engaged in during the stand-down,
we interviewed LANL scientists, managers, and administrative staff.
To compile information about the costs of the DOE-wide CREM stand-down
to DOE facilities, we obtained cost data and estimates from points of
contact identified by DOE and NNSA at affected facilities and offices.
Because DOE did not require facilities and offices to track their CREM
stand-down costs, cost tracking methodologies differed. We are
reporting this data as it was provided to us because the DOE facilities
and program offices used different methods to develop reported costs.
To assess the status of LANL's major research programs affected by the
stand-down, we reviewed LANL's fiscal year 2004 budget expenditures to
determine its largest activities and asked NNSA and LANL officials to
identify programs they considered most vital for achieving LANL's
mission. For these programs, we reviewed program milestone
documentation provided by both LANL and NNSA and interviewed NNSA
program officials and senior LANL scientists and managers to identify
schedule modifications caused by the stand-down. In addition, we
interviewed officials from the Defense Nuclear Facilities Safety Board
to obtain their perspective on the safety of the laboratory's nuclear
facilities and officials from DOD, LANL's primary end user, to confirm
information about nuclear weapons programs' schedules and performance
requirements.
To assess whether NNSA's decisions regarding the reimbursement of stand-
down costs were reasonable, we reviewed LASO and University of
California documents outlining decisions related to allowing
reimbursement and interviewed the LASO manager, contracting officers,
general counsel, and other NNSA officials. To determine the LANL
director's authority to direct the stand-down, we analyzed pertinent
provisions of DOE's contract with the University of California, and
relevant NNSA and LANL documentation. We discussed with the LANL
director and LASO manager events leading to the stand-down, NNSA's
involvement in the stand-down decision, and LASO's involvement in the
resumption process. We considered testimony and statements made by
senior NNSA officials and the Defense Nuclear Facilities Safety Board.
To determine what incentives DOE can provide to improve LANL's
management and operating contractor's performance, with regard to
safety and security, we reviewed DOE's request for proposals for the
upcoming award of LANL's management and operating contract and the
current management and operating contracts for Sandia National
Laboratories and Lawrence Berkeley National Laboratory.
As agreed with your office, unless you publicly announce the contents
of this report, we plan no further distribution until 30 days from the
date of this letter. At that time, we will send copies of this report
to appropriate congressional committees; the Secretary of Energy; the
Administrator, NNSA; the Secretary of Defense; the Director of the
Office of Management and Budget; and other interested parties. We will
also make copies available to others upon request. In addition, the
report will be available at no charge on the GAO Web site at
http://www.gao.gov.
If you or your staff have any questions about this report, please
contact me at (202) 512-3841 or [Hyperlink, aloisee@gao.gov]. Contact
points for our offices of Congressional Relations and Public Affairs
may be found on the last page of this report. Key contributors to this
report were Richard Cheston, Carol Kolarik, Allison Bawden, Doreen Eng,
Nancy Crothers, and Julian Klazkin.
Sincerely yours,
Signed by:
Gene Aloise:
Director, Natural Resources and Environment:
[End of section]
Appendixes:
Appendix I: The Estimated Cost of the DOE-Wide Stand-Down for
Accountable Classified Removable Electronic Media:
On July 23, 2004, the Deputy Secretary of Energy instructed Department
of Energy (DOE) facilities and program offices to conduct a stand-down
of all classified operations involving accountable classified removable
electronic media (CREM) until they completed inventories of all
accountable CREM material and ensured that it was properly
safeguarded.[Footnote 17] As shown in table 8, affected DOE and
National Nuclear Security Administration (NNSA) offices and facilities
reported that they incurred $13.2 million in response to the DOE-wide
stand-down.[Footnote 18] While a few sites said they had tracked stand-
down costs, most provided us with estimated costs. As a result, we
could not verify the completeness or accuracy of these reported costs.
In addition, DOE and NNSA headquarters offices and some DOE field
offices responded that time spent on stand-down activities was either
minimal or part of their normal responsibilities, and therefore they
had no incremental costs. Officials from these offices and facilities
said they incurred stand-down costs primarily for completing
inventories of accountable CREM items, entering accountable CREM into
inventory tracking systems, destroying unused accountable CREM,
developing procedures for handling accountable CREM, and training
employees.
Table 8: Estimated Cost of the DOE-Wide Stand-Down for Accountable
CREM:
DOE office or facility: DOE headquarters offices;
DOE program office: Not applicable;
Reported stand-down costs: $0.
DOE office or facility: NNSA headquarters offices;
DOE program office: NNSA;
Reported stand-down costs: $0.
DOE office or facility: NNSA's Albuquerque Service Center;
DOE program office: NNSA;
Reported stand-down costs: $290,000.
DOE office or facility: Kansas City Plant;
DOE program office: NNSA;
Reported stand-down costs: $315,253.
DOE office or facility: Lawrence Livermore Site Office;
DOE program office: NNSA;
Reported stand-down costs: $13,058.
DOE office or facility: Lawrence Livermore National Laboratory;
DOE program office: NNSA;
Reported stand-down costs: $4,666,000.
DOE office or facility: Nevada Site Office;
DOE program office: NNSA;
Reported stand-down costs: $33,314.
DOE office or facility: Nevada Test Site;
DOE program office: NNSA;
Reported stand-down costs: $172,475.
DOE office or facility: Pantex Plant;
DOE program office: NNSA;
Reported stand-down costs: $1,317,068.
DOE office or facility: Sandia National Laboratories;
DOE program office: NNSA;
Reported stand-down costs: $2,649,400.
DOE office or facility: Savannah River Plant;
DOE program office: NNSA;
Reported stand-down costs: $10,000.
DOE office or facility: Washington Group International;
DOE program office: NNSA;
Reported stand-down costs: $0.
DOE office or facility: Y-12 Site Office;
DOE program office: NNSA;
Reported stand-down costs: $0.
DOE office or facility: Y-12 Plant;
DOE program office: NNSA;
Reported stand-down costs: $2,812,229.
DOE office or facility: East Tennessee Technology Park;
DOE program office: Environmental Management;
Reported stand-down costs: $96,165.
DOE office or facility: Richland Operations Office;
DOE program office: Environmental Management;
Reported stand-down costs: $42,000.
DOE office or facility: Hanford contractors;
DOE program office: Environmental Management;
Reported stand-down costs: $74,200.
DOE office or facility: Ohio Field Office;
DOE program office: Environmental Management;
Reported stand-down costs: $0.
DOE office or facility: Paducah Gaseous Diffusion Plant;
DOE program office: Environmental Management;
Reported stand-down costs: $5,220.
DOE office or facility: Rocky Flats Field and Project Offices;
DOE program office: Environmental Management;
Reported stand-down costs: $27,000.
DOE office or facility: Savannah River site;
DOE program office: Environmental Management;
Reported stand-down costs: $44,000.
DOE office or facility: Strategic Petroleum Reserve;
DOE program office: Fossil Energy;
Reported stand-down costs: $6,400.
DOE office or facility: Idaho Operations Office;
DOE program office: Nuclear Energy Science and Technology;
Reported stand-down costs: $4,182.
DOE office or facility: Idaho National Laboratory;
DOE program office: Nuclear Energy Science and Technology;
Reported stand-down costs: $165,276.
DOE office or facility: Chicago Operations Office;
DOE program office: Office of Science;
Reported stand-down costs: $4,680.
DOE office or facility: Oak Ridge Office;
DOE program office: Office of Science;
Reported stand-down costs: $43,074.
DOE office or facility: Oak Ridge Office of the Inspector General;
DOE program office: Office of Science;
Reported stand-down costs: $4,382.
DOE office or facility: Argonne National Laboratory;
DOE program office: Office of Science;
Reported stand-down costs: $36,425.
DOE office or facility: Brookhaven National Laboratory;
DOE program office: Office of Science;
Reported stand-down costs: $11,255.
DOE office or facility: Oak Ridge National Laboratory;
DOE program office: Office of Science;
Reported stand-down costs: $23,000.
DOE office or facility: Office of Scientific and Technical Information;
DOE program office: Office of Science;
Reported stand-down costs: $25,100.
DOE office or facility: Pacific Northwest National Laboratory;
DOE program office: Office of Science;
Reported stand-down costs: $333,000.
Total;
Reported stand-down costs: $13,224,156.
Sources: Affected DOE facilities and program offices.
Note: Excludes LANL's CREM stand-down costs because they could not be
isolated from LANL's laboratory-wide safety and security stand-down
cost estimate. We are reporting these data as they were provided to us
because the DOE facilities and program offices used different methods
to develop reported costs.
[End of table]
[End of section]
Appendix II: Chronology of Key Stand-Down Events:
Date: July 7, 2004;
Event: Two pieces of CREM--in this case, classified computer disks--are
reported missing.
Date: July 9, 2004;
Event: Many operations involving nuclear materials at Technical Area 18
are stood down in response to the discovery of a Technical Safety
Requirement violation.
Date: July 14, 2004;
Event: An undergraduate student is partially blinded in a laser
accident.
Date: July 15, 2004;
Event: LANL's director stands down all CREM-related activities. The
director consults with the Administrator of NNSA and the manager of
NNSA's Los Alamos Site Office (LASO) about his intent to declare a
laboratory-wide stand-down in response to the safety and security
incidents.
Date: July 16, 2004;
Event: LANL's director declares a laboratory-wide stand-down.
Date: July 17, 2004;
Event: LANL and LASO managers meet to assess all operations and assign
initial risk level rankings to laboratory activities.
Date: July 23, 2004;
Event: The Deputy Secretary of Energy orders each DOE office or
facility that uses accountable CREM to stand down operations until the
office or facility completes an inventory of all accountable CREM
materials and ensures these materials are properly safeguarded.
Date: July 30, 2004;
Event: In a Letter of Direction, LASO's manager instructs LANL to track
stand-down costs and advises LANL that stand-down costs are subject to
the contract's allowability provisions.
Date: July 31, 2004;
Event: 75 percent of risk level 1 activities have been authorized to
resume normal operations.
Date: August 18, 2004;
Event: All risk level 1 activities have been authorized to resume
normal operations.
Date: September 8, 2004;
Event: In a letter to NNSA's contracting officer, LANL's chief
financial officer (CFO) provides LANL's methodology for capturing stand-
down costs.
Date: October 25, 2004;
Event: 83 percent of risk level 2 activities and 21 percent of risk
level 3 activities have been authorized to resume normal operations.
Date: November 24, 2004;
Event: At the request of LASO's manager, NNSA's Field CFO initiates a
review of Los Alamos stand-down costs.
Date: December 16, 2004;
Event: All risk level 2 activities and 47 percent of risk level 3
activities have been authorized to resume normal operations.
Date: December 21, 2004;
Event: In a letter to LANL's director, NNSA's Field CFO requests that
LANL (1) set up accounts to track actual stand-down costs, beginning in
January 2005; (2) identify actual stand-down costs incurred back to the
beginning of fiscal year 2005; (3) adjust its calculations using better
estimates of the percentage of time associated with each risk level,
more accurate resumption dates, and actual labor costs; and (4) provide
NNSA a list of nonlabor stand-down costs, such as increased procurement
costs and travel cancellation costs.
Date: January 20, 2005;
Event: LANL informs NNSA's Field CFO that it has set up accounts to
track stand-down costs incurred beginning in January 2005 and is making
other adjustments as directed with the exception of recalculating staff
time charges back to the beginning of fiscal year 2005, which it claims
will take 16,104 staff hours and cost $1.6 million.
Date: January 27, 2005;
Event: The final LANL CREM library is approved to stand up.
Date: February 1, 2005;
Event: LANL provides an adjusted stand-down cost estimate of $119
million to NNSA's Field CFO.
Date: February 2, 2005;
Event: LANL provides NNSA's Field CFO with a list of nonlabor stand-
down costs, including $6.3 million in claims that NNSA later
questioned.
Date: February 3, 2005;
Event: 78 percent of risk level 3 activities have been authorized to
resume normal operations.
Date: February 22, 2005;
Event: NNSA's Field CFO reports an upper bound of $367 million, stating
that it was unable to separate stand-down costs from ongoing program
costs because LANL did not adequately identify and track costs. The
Field CFO recommends that the NNSA contracting officer (1) make final
determinations on the allowability of $6.3 million in questioned costs
and the reasonableness of the stand-down's duration and (2) consider
the degree of LANL's compliance with the July 30, 2004, Letter of
Direction.
Date: March 3, 2005;
Event: In a letter to LANL's director, LASO's manager requests that
LANL provide the rationale and justification for $6.3 million in costs
questioned by NNSA's Field CFO and states that LASO will issue of
Notice of Intent to Disallow Costs to the University of California if a
response is not received by March 31, 2005.
Date: March 31, 2005;
Event: LANL provides NNSA with its rationale and justification for
questioned costs.
Date: April 6, 2005;
Event: In a memorandum to the Administrator of NNSA, LASO's manager
determines that (1) the University of California has substantially
complied with his July 30, 2004, Letter of Direction; (2) he will send
the University of California a Notice of Intent to Disallow Costs of
$6.3 million in small subcontractor claims and other incremental costs
and $8 million in costs incurred during the first 2 days of the stand-
down; and (3) the duration of the stand-down was reasonable and all
other stand-down costs are allowable.
Date: April 8, 2005;
Event: LASO's manager sends the University of California a Notice of
Intent to Disallow Costs of $6.3 million in small subcontractor claims
and other incremental costs and $8 million in costs incurred during the
stand-down's first 2 days.
Date: May 27, 2005;
Event: The LANL stand-down officially ends as all activities have
resumed. Because of additional costs incurred through the end of the
stand-down, LANL reports a total cost estimate of $121 million, and
NNSA reports an upper bound of $370 million. Corrective actions
continue to address many of the 3,047 longer term safety and security
concerns identified during the stand-down.
Date: June 7, 2005;
Event: LANL submits written justification to LASO for the questioned
costs, stating (1) activities were within LANL's scope of authority and
discretion; (2) employees remained in work status and accomplished
relevant tasks during the first 2 days; (3) costs were reasonable,
necessary, and incidental to remedial safety and security review
operations; and (4) the stand-down was conducted with NNSA officials'
full knowledge and participation.
Sources: NNSA and LANL.
[End of table]
[End of section]
Appendix III: The Stand-Down's Effects on Nuclear Weapons Activities at
LANL and Other NNSA Facilities:
W76-1 Life Extension Program:
The W76-1 Life Extension Program (LEP) is an effort by LANL, Sandia, Y-
12, Pantex, Kansas City, and Savannah River to extend the service life
of the W76 nuclear warhead for the Department of the Navy. The LEP is a
significant design modification to the warhead and focuses on
refurbishing the components that provide the primary and secondary
stages of the weapon's two-stage nuclear explosion, providing a new gas
transfer system, and installing refurbished warhead structural
hardware. The W76 is a LANL-designed warhead that, at the time of the
stand-down, was nearing its final design review and being prepared for
a transition to the program's production phase. The major delivery date
for the W76-1 LEP is September 2007, when the modified warhead's first
production unit (FPU) will be produced. A senior LANL official told us
that meeting this date is critical because of Navy submarine schedules
and NNSA production plant availability.
The stand-down delayed the achievement of several important milestones
that support the transition from the design to production phases and
meeting the FPU date. LANL managers formed an Integrated Project Team
to assess the potential effects of the stand-down on the W76-1 LEP and
created a recovery plan that prioritized resumption of essential
activities. In addition, LANL managers took steps to maintain the FPU
date by (1) obtaining risk level 0 exceptions, enabling them to
continue work on planned hydrotests and ship flight test units to the
Navy; (2) reworking the LEP's testing schedule, including delaying the
starts of some tests and eliminating some tests; (3) eliminating some
design options; and (4) creating work-arounds to collect data for the
LEP's final design review.
LANL officials report that the W76-1 LEP completely recovered from the
stand-down by August 2005, and a senior Navy official said he is
confident LANL will meet the FPU date. However, the delayed achievement
of milestones has significantly reduced schedule contingency time and
caused the program to assume schedule risk if test data analysis
provides any unexpected results and requires either additional design
changes or tests to resolve issues. The program completed a successful
final design review in May 2005, which has increased LANL officials'
confidence that the additional risks assumed by the program's recovery
plan will not be realized in the long-term. The program transitioned
from its design to its production phase in August 2005--3 months late-
-but still was able to support achievement of the September 2007 FPU,
according to LANL, NNSA, and Navy officials.
W88 Pit Manufacturing and Certification Activities:
Since 2001, LANL has been working to reconstitute the nation's
capability to manufacture and certify pits--part of the nuclear
weapon's primary stage.[Footnote 19] More specifically, LANL is
reconstituting this capability for the Navy's W88 warhead. LANL met its
first major delivery milestone in 2003, when it manufactured the first
two certifiable W88 pits since Rocky Flats Plant's closure in 1989.
LANL is now working to meet two major delivery milestones before the
end of fiscal year 2007: (1) delivering the first certified W88 pit
since 1989 and (2) establishing a manufacturing capability to produce
between 10 and 20 certified W88 pits per year.[Footnote 20] LANL's pit
manufacturing and certification activities are among the highest risk
activities at the laboratory, requiring the handling of plutonium and
other radiological materials in specialized facilities.
The stand-down affected a number of important milestones in support of
the W88's two 2007 delivery dates, including two key subcritical tests-
-nuclear tests that do not achieve sustained chain reactions and are
designed to examine nuclear materials' properties--performed at the
Nevada Test Site, three interim pit manufacturing milestones, and the
development of LANL's Pit Manufacturing and Certification Integrated
Plan. LANL managers planned the program's recovery to maintain the
dates for the delivery of the first certified pit and the establishment
of the targeted manufacturing and certification capability by (1)
reworking the test schedule to resolve resource constraints; (2)
separating out risk level 1 work from other operations and accelerating
this work forward in the program schedule to allow more time for risk
levels 2 and 3 work after resumption; and (3) pushing work planned for
fiscal year 2004 into fiscal year 2005, adding to the 2005 workload.
LANL and NNSA officials reported, and a senior Navy official agreed,
that effective stand-down recovery planning supports achieving the
delivery of the first pits and establishing the manufacturing and
certification capability by the original 2007 date. However, schedule
delays have significantly reduced contingency time and have caused the
program to assume additional risk, particularly because one subcritical
test has been delayed by at least 6 months. In addition, LANL's
recovery plan requires that 12 months worth of pits be manufactured in
10 months of available manufacturing time. If the results of the
delayed subcritical test or other tests reveal anomalies, NNSA and LANL
officials acknowledge that it will be difficult to facilitate
additional tests or design changes under the current schedule.
B61 ALT 357 Program:
This program is an effort by LANL, Sandia, and the Y-12 production
plant to refurbish modifications 7 and 11 of the Air Force's B61
gravity bomb using design alternative (ALT) 357, which is related to
the nuclear weapon's secondary stage. The production phase of the B61
ALT 357 program began in October 2003; thus at the time of the stand-
down, LANL was responsible for building units for tests executed by
Sandia and the production plants. The FPU date for the B61-7 is June
2006 and for the B61-11 is January 2007.
The stand-down affected several important interim milestones in support
of the FPU dates, including (1) a cable pull-down test performed at
Sandia, a high impact test using a mock bomb to measure the weapon's
performance on impact and gather penetration data; (2) two combined
environment tests performed on a shaker table that provide data
important to understanding the bomb's transportation; and (3) two
accelerated aging tests that use ovens at Y-12 to speed the aging
process of nuclear materials to help scientists understand anomalies
associated with aging. LANL, Sandia, and Y-12 scientists and
technicians worked to recover the program's schedule and to achieve the
FPU dates by obtaining risk level 0 exceptions to allow LANL scientists
to work at Sandia, Y-12, and the Kansas City Plant under those
facilities' safety authorizations to complete the cable pull-down and
combined environment tests and creating work-arounds to provide the Air
Force with information normally stored on CREM. However, the stand-down
reduced the time available to analyze the test data. In addition, the
starts of the aging tests were delayed in response to technical issues
at the production plants.
LANL, NNSA, and Air Force officials reported that effective recovery
planning addressed the tests that were delayed by the stand-down, and
the FPU dates have been maintained. NNSA officials said testing
resulted in some additional design changes. Air Force officials said
these design changes could have been more easily facilitated by the
program's schedule if the stand-down had not occurred and that the
ability to meet the FPU dates will continue to be reassessed. Air Force
officials said the FPU dates for the B61 ALT 357 were set by NNSA, and
the Air Force can accommodate some schedule slip beyond June 2006 and
January 2007.
Repairs to the Second Axis of the Dual-Axis Radiographic Hydrodynamic
Test (DARHT) Facility and Facility Commissioning:
The DARHT Facility provides LANL with the capability to capture images
of nuclear weapons using mock materials during their implosion. These
test implosions are created through LANL's hydrotesting program. Data
from these tests are fed into three-dimensional and time-resolved
physics models that are used to assess weapons performance, to
understand what happens to nuclear weapons when they explode, and to
certify the safety and reliability of weapons in the stockpile. As
shown in figure 2, the DARHT facility consists of two separate
buildings or axes, each containing an accelerator that ultimately
provides X-rays to capture these images in a process called X-ray
radiography. The first axis of DARHT became operational in 1999, and
the construction of the buildings was completed in 2003 at a cost of
$260 million. During testing of DARHT's second axis, high-voltage
breakdown problems were noted; and in 2003 LANL began a project to
understand the problems, fix them, and repair and upgrade the second
axis before it becomes operational. In 2004, LANL scientists determined
a solution to the high-voltage problem. However, the stand-down
affected the implementation of this solution, the refurbishment of each
of the 80 cells in the second-axis accelerator, which LANL estimates
will cost $87.5 million. Prior to the stand-down, the completion of
DARHT's second-axis repair, upgrade, and commissioning were scheduled
for completion in September 2007.
Figure 2: The DARHT Facility at LANL:
[See PDF for image]
Note: Each building, or axis, houses one accelerator. During a
hydrotest, the test unit is placed in the foreground between the two
axes.
[End of figure]
During the stand-down, LANL program managers adjusted the schedule for
the completion of DARHT's refurbishment and commissioning to the first
quarter of fiscal year 2008, based on an estimated resumption of DARHT
activities at LANL at the beginning of January 2005. In the interim,
LANL managers took steps to recover the project's schedule by (1)
moving the majority of testing of the refurbished accelerator cells to
Lawrence Berkeley National Laboratory and other testing to Lawrence
Livermore National Laboratory and (2) obtaining risk level 0 exceptions
to send LANL scientists to Lawrence Berkeley to work on cell
refurbishment.
According to senior LANL program officials, the revised schedule will
not be met because DARHT activities at LANL did not resume until the
end of February 2005. DARHT's second axis is now scheduled to be
commissioned in March 2008, a 6-month slip from the original schedule
and a 2-month slip from the stand-down adjusted schedule. The head of
LANL's Advanced Radiography program estimates that the program covered
$7.4 million in costs related to the stand-down and will realize an
additional $4 million in future poststand-down compliance costs that
will be added to the total project costs. LANL's Hydrotest Program
manager reported that the delayed refurbishment and commissioning of
DARHT's second axis will not affect its use in 2008 for hydrotests
scheduled in the National Hydrotest Plan if the DARHT commissioning is
completed on time.
Hydrotesting Program:
Nonnuclear hydrodynamic tests, or hydrotests, use high explosives-
driven experiments to study what happens to a weapon's pit when it
implodes. The term "hydrodynamic" refers to the behavior of metals and
other materials in the pit--driven by the high pressures and
temperatures generated by the detonation of high explosives, these
metals and materials act like liquids. Test data are evaluated using
radiographic images provided by the DARHT facility. Every year, NNSA
updates its 5-year National Hydrotest Plan. Prior to the stand-down,
LANL completed three successful hydrotests on time for a review of the
W76 design. Six scheduled hydrotests were affected by the stand-down,
five of which were to support the W76-1 LEP. Hydrotests are also used
to support stockpile certification and assessment, emergency response,
and other weapons activities such as W88 pit certification.
LANL and NNSA officials said because the laboratory's hydrotesting
activities are central to its mission, particularly to achieving the
FPU date for the W76-1 LEP, they worked together with Navy officials to
revise the hydrotesting plan during the stand-down. This recovery
planning included (1) obtaining risk level 0 exceptions to continue
preparatory work for two W76-1 LEP hydrotests, the first of which was
executed in April 2005 during the stand-down under NNSA oversight and
the second of which was executed in June 2005 shortly after resumption;
(2) canceling one planned W76-1 LEP hydrotest upon determination that
it was no longer required, based on data from the first two hydrotests;
and (3) shifting three additional fiscal year 2005 hydrotests to fiscal
year 2006, however, these delays were not entirely due to the stand-
down.
LANL and NNSA officials report that effective stand-down recovery
planning allowed hydrotesting activities to go forward in support of
the W76-1 FPU and the program to fully recover from the stand-down by
August 2005. LANL officials said some of the six hydrotests scheduled
during the stand-down period would have been delayed, regardless of the
stand-down because of other, unrelated factors.
Experimental Programs:
LANL's Experimental Programs provide a validation of the laboratory's
predictive capability or a check of its physics models against data
from tests that can still be performed without nuclear testing.
Experimental Programs cut across many of the laboratory's science-based
stockpile stewardship activities, or campaigns, that involve nonnuclear
testing,
subcritical testing, and other types of experimentation.[Footnote 21]
In fiscal year 2004, LANL scheduled completion of 28 secondary level
milestones across its Experimental Programs supporting the W76-1 LEP,
W88 activities, stockpile surveillance and assessment, understanding
materials properties, and inertial confinement fusion.
LANL officials reported delays to 10 of the 28 secondary level
milestones scheduled for completion in fiscal year 2004; and, in one
case, test dates were renegotiated and the work re-scoped. During the
stand-down, experimental activities and resources were prioritized to
support the Hydrotesting Program for the W76-1 LEP and subcritical
experiments for W88 activities. Other experimental work was
deliberately delayed to focus efforts on these two programs, which had
hard deadlines for experimental work.
LANL officials reported that successful stand-down recovery planning
facilitated Experimental Programs' ability to support the W76-1 LEP and
W88 activities, and most experimental activities had recovered their
schedules by the end of fiscal year 2005. Some fiscal year 2005
activities have shifted out to fiscal year 2006, including the
capability to resume underground nuclear tests within 18 months of a
presidential determination to do so. LANL officials said the impacts of
the stand-down are unclear for some of these experimental delays,
particularly in the area of inertial confinement fusion, because future
funding levels are uncertain.
Simulation and Implementation of the Quantification of Margins and
Uncertainties (QMU) Methodology:
LANL's simulation activities focus almost exclusively on Advanced
Simulation and Computing activities--the ability to integrate
experimental and computational data into three-dimensional and time-
resolved models used to predict different weapons' characteristics that
support stockpile assessment and certification, LEPs, and analysis of
accident scenarios and weapons aging issues. LANL's physics models and
computer simulations compare data from hydrotests, experimental
programs, and other tests against legacy data from past nuclear tests
to ensure that scientists can understand weapons' performance, safety,
and reliability issues. A major initiative at LANL is the
implementation of the QMU methodology--a means of quantifying the
uncertainty associated with the ability of LANL's models and
simulations to predict weapons performance.[Footnote 22] The QMU
methodology is being implemented laboratory wide and project milestones
for its implementation have been developed.
Simulation and QMU activities at LANL were delayed primarily because of
the inability to do classified computing work at the laboratory until
risk level 2 activities resumed. LANL's supercomputers were never shut
down during the stand-down and were available for use by Lawrence
Livermore and other laboratories; however, LANL scientists were stood-
down from classified computing activities until mid-September 2004.
During the stand-down, simulation activities recovered their schedules
by (1) separating risk level 1 work from other operations and
accelerating it forward in project schedules to allow more time for
risk level 2 work after resumption, (2) eliminating contingency time in
simulation schedules for the LEPs, and (3) employees consistently
working overtime to make up for schedule loss.
The head of laboratory simulation activities said that 3 of 13 fiscal
year 2004 project milestones were missed because simulation activities
were stood down for 2 months. These milestones were completed in
November 2004 and March 2005. However, he said that to meet these near-
term delivery dates, schedules for longer term work are at risk,
including delays in implementing QMU. One benefit of the stand-down was
that the simulation program was able to complete a software quality
assurance review, which had been identified by LANL officials as
important.
Neutron Generator Fabrication Activities at Sandia:
Sandia builds neutron generators, a component in all nuclear weapons
that must be exchanged on a regular basis because of its limited life.
LANL routinely supplies Sandia with tritium-loaded targets that Sandia
uses to build the neutron generators.[Footnote 23] During the stand-
down, LANL could neither produce targets nor ship them to Sandia until
April 2005. Sandia has a major delivery date for a large number of
neutron generators in 2009.
During the stand-down, Sandia (1) used up a 60-day inventory of targets
that it had in storage, (2) cross-trained technicians in other neutron
generator manufacturing processes, and (3) built mock neutron
generators that did not contain any targets as a part of operator
training and to keep machines in good working order.
Sandia officials said that as a result of the LANL stand-down Sandia
was unable to manufacture 300 planned neutron generators, at a cost of
$75,000 per generator. While no immediate delivery dates were affected,
Sandia officials have calculated that if current neutron generator
demands are maintained, the project will need to add four employees to
its manufacturing line by April 2006, to remain on pace to meet the
2009 delivery requirements. Sandia officials told us that since April
2005 LANL has been providing targets steadily.
W80 Detonator Surveillance Activities at Lawrence Livermore:
LANL designed the W80 cruise missile warhead but transferred
responsibility for its annual assessment and certification, as well as
the W80 LEP to Lawrence Livermore in 2002. At the time of the stand-
down, LANL was still completing some surveillance and testing on the
W80's detonator system--which sets off the explosives that act upon a
nuclear weapon's primary stage--to determine whether any anomalies had
developed as the weapon aged. LANL had a deadline of October 1, 2004,
to either complete this surveillance work or ship remaining work to
Lawrence Livermore--along with historical surveillance information,
stored on CREM--for use in W80 surveillance going forward. The stand-
down prevented LANL from completing the surveillance work and from
shipping uncompleted work and historical information to Lawrence
Livermore.
Lawrence Livermore received materials from LANL in June and August of
2005. The delay in the receipt of the detonators and historical data
resulted in (1) some delays in developmental testing for the W80 LEP,
which has a January 2009 FPU date and (2) a likely 1-year delay in the
completion of the backlog of surveillance testing on the W80 in the
stockpile, now slated for fiscal year 2006. Data from this detonator
surveillance are fed into the annual assessment of the W80. If
surveillance yields unusual results, this could impact the annual
assessment. However, NNSA officials said weapons' detonators are
generally acknowledged as being reliable.
Seamless Safety for the 21st Century (SS-21) Program at Pantex:
SS-21 is a nuclear complex-wide program that is intended to enhance
worker and environmental safety in the assembly, disassembly, and
experimentation processes for nuclear weapons. Pantex is implementing
SS-21 programs for, among others, the B61 and the W88. To implement an
SS-21 program, teams at Pantex identify potential hazard scenarios as
they walk down Pantex processes; these scenarios are then sent to LANL
for analyses of the consequences. Over time, final hazardous analyses
are developed along with mitigation measures to protect against these
hazards without adversely affecting the performance of the weapon.
Pantex must implement SS-21 programs to be in compliance with Nuclear
Safety Management regulations.[Footnote 24] Because of the LANL stand-
down, the iterative process of developing the final hazardous analysis
could not go forward, primarily because hazard scenarios are
transmitted on CREM, according to a Pantex official.
Pantex completed the final hazardous analysis for the B61 with just
over a 6-month delay. It completed the final hazardous analysis for the
W88 with just under a 3-month delay, though this program was minimally
delayed prior to the LANL stand-down. To be in compliance with Nuclear
Safety Management regulations, Pantex received an exception from NNSA
for its SS-21 activities associated with LANL, which lasted until 4
weeks after LANL's resumption of CREM activities.
[End of section]
Appendix IV: LANL's Technical Area-18:
DOE has long recognized that a successful terrorist attack on a site
containing the material used in nuclear weapons, such as plutonium or
highly enriched uranium, could have devastating consequences for the
site and its surrounding communities. The risks associated with these
materials, which in specified forms and quantities are referred to as
Category I or Category II special nuclear material, vary but include
theft for use in an illegal nuclear weapon; the creation of improvised
nuclear devices capable of producing a nuclear yield; and the creation
of so-called "dirty bombs," in which conventional explosives are used
to disperse radioactive material. Because terrorist attacks could have
such devastating consequences, an effective safeguards and security
program is essential. For many years, a key component for DOE security
programs has been the development of the design basis threat (DBT), a
classified document that identifies the potential size and capabilities
of adversary forces.
According to NNSA officials, in 2003, DOE determined it would remove
Category I and II special nuclear materials from LANL's Critical
Experiments Facility at Technical Area-18 (TA-18) by the end of fiscal
year 2008. Officials found security difficulties at TA-18 that could
not be cost effectively remedied; specifically, the facility's siting
makes it challenging to defend. While removal of this material would
reduce the facility's security and safety risk, it would preclude
further criticality experiments at LANL, a capability on which many
programs depend and which does not exist elsewhere within DOE. NNSA is
building a Critical Experiments Facility within the Nevada Test Site's
Device Assembly Facility to relocate this capability. In September
2004, NNSA issued a revised DBT that required removal of TA-18's
Category I and II special nuclear materials by September 30,
2005.[Footnote 25]
On July 9, 2004, criticality experiments and other operations involving
nuclear materials at TA-18, except the removal of special nuclear
materials, were unexpectedly suspended when a technical safety
requirement violation was discovered. One week later, the entire
laboratory was stood-down. LANL managers received a risk level 0
exception to continue materials removal to meet the September 30, 2005,
completion date.
NNSA and LANL program officials said that to meet this date, TA-18
personnel who supported criticality experiments and other programmatic
activities--such as emergency response training--were redirected toward
special nuclear materials removal, limiting the availability of TA-18
for these other uses. While emergency response training also received a
risk level 0 exception to continue throughout the stand-down, NNSA
officials said it was difficult to do so because the people needed to
facilitate the training were focused on materials removal. In April
2005, NNSA developed a TA-18 work prioritization to ensure the
programmatic experiments and uses that were regarded as most vital
could be achieved without compromising the schedule for removing
special nuclear materials.
To date, TA-18's critical assembly machines have not resumed
operations. In reassessing priorities for TA-18 in August 2005, LANL
and NNSA officials decided to rededicate some resources to resuming the
operation of one of the critical assemblies, specifically for a DOD-
sponsored experiment.
LANL officials said it is difficult to determine the extent to which
laboratory programs were affected by the TA-18 stand-down, the
laboratory-wide stand-down, or both because (1) the TA-18 stand-down
and the laboratory-wide stand-down occurred only 1 week apart; (2) the
TA-18 stand-down for some activities lasted the duration of the
laboratory-wide stand-down and beyond; and (3) resources dedicated to
the laboratory's resumption and the removal of special nuclear
materials from TA-18 may have delayed resumption of some TA-18
programmatic activities, such as criticality experiments. After the
laboratory-wide stand-down, management responsibility for TA-18 was
shifted to the division within LANL that also manages the Plutonium
Facility at TA-55.
[End of section]
Appendix V: The Stand-Down's Effects on LANL's Threat Reduction
Activities:
Off-Site Source Recovery Program: This NNSA program recovers excess and
unwanted radiological sources from medical and other commercial
facilities to reduce the risk that they might be used in a dirty bomb.
LANL processes or secures these sources for storage. Because recovered
materials could not be shipped to LANL during the stand-down, NNSA
negotiated with transportation subcontractors to temporarily store
materials until LANL resumed operations and could accept them. LANL did
not receive any materials in July or August 2004; and, according to
NNSA officials, the program did not resume full operation until January
2005. However, NNSA and LANL officials reported that collection and
processing benchmarks were met for fiscal years 2004 and 2005.
Fabrication of Nuclear Explosion Monitoring Sensor Packages for Air
Force Global Positioning System Satellites: LANL fabricates suites of
sensors for Global Positioning System satellites that are used to
monitor nuclear detonations. According to NNSA officials, the Air Force
is scheduled to launch the first of this constellation of satellites in
December 2006. NNSA officials said the sensor fabrication program was
delayed 4 months because of the LANL stand-down, a technical design
issue, and a space industry-wide parts recall. Specifically, Air Force
officials said the stand-down precluded discussions with LANL engineers
about the parts recall, and they could not work with LANL engineers to
(1) assess the impact of the recalled parts, (2) determine whether to
try to expedite replacement parts, or (3) determine whether to replace
recalled parts in LANL sensors already installed in one of the Air
Force's satellites.
Design Work and Process Testing for the Pit Disassembly and Conversion
Facility: The Pit Disassembly and Conversion Facility is currently in
design for construction at Savannah River. It will provide the United
States with the capability to dispose of surplus weapons-usable
materials. LANL developed many of the systems to be implemented at the
facility and is responsible for some design work and process testing.
The facility is currently scheduled for completion in 2012. The scope
of LANL's role in the project was reduced as a result of the stand-down
and unrelated pre-existing issues. Some classified calculations LANL
was to have completed were transferred to Washington Group
International, a contractor that is part of the Pit Disassembly and
Conversion Facility's design team, during the stand-down. NNSA
officials said LANL was not able to do any work on the project from
July 2004 through January 2005 and that work was not fully resumed
until March 2005. NNSA estimates that the delay cost the project $14
million. LANL was scheduled to begin a year-long demonstration of its
process and equipment in June 2004. LANL officials said because of the
stand-down it began in April 2005, but NNSA officials said it has been
delayed until December 2005.
Testing of Radiation Detection Portal Monitors for Borders: At the time
of the stand-down, LANL was involved in testing of radiation detection
portal monitors to be deployed at borders to enhance homeland security.
The testing was to occur at TA-18, which was stood down 1 week prior to
the laboratory-wide stand-down. NNSA officials reported that portal
monitoring testing was delayed for over 5 months. This testing did not
require the use of the criticality machines, operation of which has not
resumed to date. LANL officials said the testing did occur in TA-18.
The LANL and TA-18 stand-downs both contributed to the extent of the
delay, but it is unclear whether testing activities would have resumed
earlier had TA-18 operations resumed fully with the laboratory.
Plutonium (Pu-238) Heat Sources Fabrication: LANL manufactures small
heat sources using Pu-238, a nonfissile plutonium isotope. These
heaters are used by the National Aeronautics and Space Administration
(NASA) to enhance a spacecraft's electrical power and keep its
electronics package warm during a deep space mission. At the time of
the stand-down, LANL was manufacturing Pu-238 heat sources for a NASA
probe scheduled to launch in January 2006 for a mission to Pluto.
Originally, LANL planned to fabricate 72 Pu-238 heaters for NASA using
capabilities in TA-55, however, a 2003 safety incident shut down those
Pu-238 operations and caused LANL to revise the number of heaters it
would fabricate down to 36. At the time of the July 2004 stand-down,
LANL was still implementing corrective actions from the 2003 incident.
As a result of the stand-down, LANL program managers further reduced
the number of Pu-238 heaters it would produce to 23. Twenty-one of
these heaters had already been successfully manufactured at the time of
the stand-down and were shipped to NASA in January 2005.[Footnote 26]
NASA agreed to the reduced scope of the project and will make up the
shortfall of heaters with excess inventory it has from a previous
mission. Some additional risk has been accepted because the Pu-238 in
these older heaters has decayed more than the Pu-238 in newly
fabricated heaters would have.
Naval Reactors: Jupiter Icy Moon Orbiter/Prometheus: NASA contracted
with Naval Reactors, a joint DOE/DOD office, to design and build a
space-based nuclear reactor to power a mission to Jupiter. LANL is part
of the Naval Reactors team, providing some design work on the reactor
as well as the design and manufacturing of the reactor's fuel. Most of
the design work for which LANL was responsible was considered risk
level 1 work and was able to resume by the end of August 2004. LANL
provided design options to Naval Reactors in April 2005. Testing of
materials to inform the selection of a design requires the use of the
criticality machines in TA-18 and was significantly delayed by the
failure of these machines to resume operations. According to LANL
officials, work commenced to make these machines operational so that 1
test for the Prometheus program--out of between 6 to 16 remaining
tests--could occur before special nuclear materials are removed from TA-
18 by September 30, 2005. However, in August 2005, NASA decided to
terminate the Prometheus program for budgetary reasons, according to
Naval Reactors officials. This decision has made moot any program
delays related to the LANL stand-down.
Emergency Response Hydrotest: Among LANL's scheduled fiscal year 2004
hydrotests was one to support emergency response operations. The test
was originally scheduled for July 2004. LANL managers determined that
the test could be performed at Lawrence Livermore during spring 2005.
However, it would have cost the test sponsor $1 million to have the
testing unit transported. The sponsor agreed to complete the test at
LANL after full resumption of hydrotesting activities. LANL managers
reported that this hydrotest was executed in August 2005, a 1-year
slip.
Nondestructive Assay Training for the International Atomic Energy
Agency (IAEA): Twice per year, LANL hosts IAEA inspectors for training
in the identification of radioactive materials using nondestructive
means. As a result of the stand-down, one session was cancelled.
Training has resumed at LANL, however, NNSA officials report that some
IAEA inspectors were fielded without receiving the training. LANL and
NNSA officials said LANL's reputation with the IAEA was damaged because
of the stand-down. NNSA officials said that LANL trainers' career-long
relationships with the IAEA inspectors they train are a benefit, and
the loss of this opportunity to form such relationships is an adverse
effect of the stand-down.[Footnote 27]
[End of section]
Appendix VI: Comments from the Department of Energy:
Department of Energy:
National Nuclear Security Administration:
Washington, DC 20585:
NOV 02 2005:
Mr. Gene Aloise:
Director, Natural Resources and Environment:
Government Accountability Office:
Washington, D.C. 20548:
Dear Mr. Aloise:
The National Nuclear Security Administration (NNSA) appreciated the
opportunity to have reviewed the Government Accountability Office (GAO)
Draft Report, GAO-06-83, "STAND-DOWN OF LOS ALAMOS NATIONAL LABORATORY:
Total Costs Uncertain; Almost All Mission-Critical Programs Were
Affected but Have Recovered." We understand that the Chairman, House
Committee on Energy and Commerce requested GAO to assess the total
costs of the stand down, the status of research projects and programs,
and whether the costs are reimbursable.
NNSA further understands that based on the audit work, GAO concluded
that neither the methodology used by the Laboratory to track costs
associated with the stand-down, nor the methodology used by the NNSA's
Field Chief Financial Officer accurately captured costs associated with
the stand-down. NNSA acknowledges that our methodology over estimates
the cost of the stand down. The report also states that while there are
programs that had to change milestone dates, the laboratory has
recovered the lost time on most processes and will have to extend only
one delivery date. The report also notes that the weapons programs will
not bear any additional risk and that the basis for NNSA's
determination that most of the stand-down costs were allowable seem to
be reasonable.
As you know, there were many interactions with your staff prior to the
draft report being issued. Therefore, we are providing only minor
technical comments as they relate to the various sites mentioned in the
report. NNSA accepts the report and generally agrees with the
recommendations.
Regarding the recommendation to establish activity codes in the budget
and reporting systems so that the costs, including associated support
costs, of any future stand-downs can be tracked on an annual cost
basis, NNSA generally agrees. The NNSA's Field Chief Financial Officer
(CFO) will work with the Department's CFO on establishing these
activity codes.
The report questions whether the new Los Alamos contract will have
fewer performance requirements to achieve additional years being
awarded to the contract or more stringent performance requirements. The
characterization in GAO's Highlights page is incorrect. The new process
as discussed by GAO is, in fact, more beneficial to the Government,
strengthens accountability, and is exercised through a two-step process
with the awarding of additional years to the contract approved solely
by the NNSA Administrator not by the Contracting Officer.
Each year the contractor is/will be evaluated against a predetermined
performance evaluation criteria for their Award Fee. During that
process, should the contractor receive an Award Fee score that meets a
predetermined Award Term evaluation threshold score, the contractor
will then be evaluated against additional criteria that is only applied
to the Award Term evaluation. The Administrator, after review of the
Award Fee documentation and Performance Evaluation Report and after
review of success of the contractor against the additional evaluation
criteria, may award an additional year to the contract.
Should you have any questions related to this response, please contact
Richard Speidel, Director, Policy and Internal Controls Management.
Sincerely,
Signed by:
Michael C. Kane:
Associate Administrator for Management and Administration:
Attachment:
cc: Senior Procurement Executive Manager, Los Alamos Site Office
Director, Service Center:
(360552):
FOOTNOTES
[1] These laboratories each have annual operating costs of more than
$1.5 billion. Since the end of the cold war, their mission has changed
from designing and testing nuclear weapons to ensuring the reliability
and safety of the nation's nuclear weapons stockpile. The National
Defense Authorization Act for Fiscal Year 2000 (Pub. L. No. 106-65, §
3211) created NNSA as a separately organized agency within the
Department of Energy (DOE).
[2] On July 23, 2004, the Deputy Secretary of Energy ordered a DOE-wide
stand-down of operations that used accountable classified removable
electronic media. These media include computer disks; removable hard
drives; and compact discs, read-only memory (CD ROM) that contain
information classified as secret restricted data, top secret, or
specially sensitive information. Almost all DOE facilities resumed
operations within 6 weeks, once they had certified that these media
were accounted for and posed no security risk. (See app. I for data on
the estimated cost of the DOE-wide stand-down.)
[3] The risk levels indicated the hazard of the activities to
employees, the laboratory, or the community if an accident or security
breach occurred.
[4] In March 2004, a classified computer disk was determined to have
been destroyed without proper documentation. The incident was properly
reported to responsible officials. An investigation of the two
classified computer disks reported missing in July 2004 determined
that, even though the disks had never been created, inventory numbers
had been established in LANL's CREM inventory records. The responsible
LANL employees later falsified inventory records to cover up the error.
[5] In February 2005, the NNSA Administrator approved a revision of
LANL's CREM policy that allows weekly CREM inventories.
[6] LANL's May 2005 estimate of total stand-down costs is $1.9 million
higher than its original January 2005 estimate of $119 million because
it includes an additional 4 months of activities. Similarly, NNSA's May
2005 estimate is $3 million higher costs than its February 2005
estimate of $367 million because of subsequent costs.
[7] LANL managers said they would normally include all related support
costs in calculating program costs for DOE or its other customers.
However, in estimating stand-down costs, they considered only the cost
of the time that activities were stood down because they believed that
was what LASO had requested.
[8] According to NNSA Field CFO personnel, in early February 2005, they
proposed to interview LANL managers and obtain supporting information
to document the amount of work ongoing at each risk level prior to full
resumption. However, this effort was curtailed when LANL management
delayed the interviews and indicated its preference that laboratory
managers devote their time and efforts on resumption activities.
[9] To allocate support costs to the stand-down costs of LANL programs,
NNSA used a support-cost multiplier of 1.83 for labor costs and 1.42
for other direct costs for fiscal year 2004 and a support-cost
multiplier of 1.85 for labor costs and 1.37 for other direct costs for
fiscal year 2005. For example for fiscal year 2004, $100 in program
labor costs would be $183 when support costs are fully allocated and
$100 in other direct program costs would be $142 when support costs are
fully allocated. LANL's annual support-cost multipliers equal the total
costs of its support activities divided by total program costs.
[10] NNSA's other facilities are Lawrence Livermore National Laboratory
in Livermore, California; Sandia National Laboratories in Albuquerque,
New Mexico, and Livermore, California; the Pantex Plant in Amarillo,
Texas; the Y-12 Plant in Oak Ridge, Tennessee; the Kansas City Plant in
Kansas City, Missouri; parts of the Savannah River site in Aiken, South
Carolina; and the Nevada Test Site near Las Vegas, Nevada.
[11] These programs include projects funded by NNSA, DOD, the
Department of Homeland Security, the National Institutes of Health, and
the Centers for Disease Control and Prevention to reduce the threat of
weapons of mass destruction, proliferation, and terrorism. In addition,
the National Aeronautics and Space Administration sponsors work through
LANL's Center for Space Exploration.
[12] Clause G.001(e) of the LANL contract states that DOE and the
University of California recognize that in performing the contract an
appropriate balance must exist between the conduct of world-class
scientific and technical research and the conduct of activities
necessary for the prudent operation of the facility, the management of
the workforce, and the safe conduct of research.
[13] Clause H.026(c) of the LANL contract requires that cost
allowability be determined based on (1) the Federal Acquisition
Regulation Subpart 31.2, which specifies various contract cost
principles, including the determination of allowability (48 C.F.R. §
31.201-2), and (2) DOE's Acquisition Regulation Subpart 970.31, which
addresses other applicable procedures or principles.
[14] In addition to clauses G.001(e) and H.026(c) of the LANL contract,
LANL's counsel cited clause I.074(b), which directs that the contractor
perform work safely and adequately ensure the protection of employees,
the public, and the environment, and shall be accountable for the safe
performance of work. LANL's counsel also cited appendix E, section 3.2
of the Statement of Work, which requires that the contractor conduct a
laboratory integrated safety management program.
[15] The Final Report of the Task Force to Enhance Experimental Science
at Los Alamos National Laboratory, (Feb. 14, 2001).
[16] The contractor becomes eligible for contract extension beginning
in the second year of the contract.
[17] Accountable CREM is any CREM that contains information classified
as secret restricted data, top secret, or specially sensitive
information.
[18] This total excludes the CREM stand-down costs of Los Alamos
National Laboratory (LANL) because they could not be isolated from
LANL's laboratory-wide safety and security stand-down cost estimate.
[19] NNSA's Pit Manufacturing and Certification Campaign focuses on
providing an interim pit manufacturing and certification capability at
LANL and establishing a longer term capability. DOE's Rocky Flats Plant
near Denver, Colorado, manufactured pits for all of the nation's
nuclear weapons until its closure in 1989.
[20] LANL's ability to manufacture and certify pits has implications
for the success of the Reliable Replacement Warhead program, provided
for by congressional conferees considering H.R. 4818, which became the
Consolidated Appropriations Act of 2005 (Pub. L. No. 108-447). See H.
Conf. Rep. No. 108-792 at 950-51. This program, an alternative to the
nuclear weapons LEPs, would replace aging warheads with ones that can
be more confidently manufactured and maintained.
[21] These campaigns include Primary and Secondary Stage Assessment
Technologies; Dynamic Materials Properties; Advanced Radiography
(including DARHT activities); Enhanced Surveillance activities used to
assess the lifetimes of weapons components and associated diagnostics;
Sub-Critical Experiments; and high-energy density physics experiments
in support of Inertial Confinement Fusion, designed to study nuclear
phenomena by using lasers to create conditions approaching those in a
nuclear weapon.
[22] Successful implementation of the QMU methodology is particularly
important for the Reliable Replacement Warhead program, which would
redesign weapons components to be easier to manufacture, maintain,
dismantle, and certify without nuclear testing.
[23] Independent of the stand-down, NNSA decided in October 2004 to
permanently transfer LANL's neutron tube target loading activities to
Sandia as a cost savings measure. Transfer of these activities is in
process.
[24] 10 C.F.R. pt. 830 (2005).
[25] According to LANL officials, these materials were removed by the
September 30, 2005, milestone.
[26] LANL subsequently produced an additional 13 Pu-238 heaters, which
are available for use if NASA delays its launch for any reason.
[27] Prior to the stand-down, discussions had occurred about moving the
training from LANL to another facility, such as Idaho National
Laboratory, because of concerns about foreign visitors accessing
sensitive LANL facilities.
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